In today’s briefing:
- HSI Index Rebalance Preview (March 2022): The Slow Crawl Continues
- PCOMP Index Rebalance: EMP, MONDE Could Pop; BLOOM, RRHI Could Drop
- Time Interconnect (1729 HK): Possible Offer
- Mercari – Don’t Panic Sell
- CLPH (1589 HK): Composite Doc Out. Offer Now Open
HSI Index Rebalance Preview (March 2022): The Slow Crawl Continues
- The March rebalance should see the slow crawl toward 80 index members continue. We should get up to 68-70 members in March. Reaching 80 by June is unlikely.
- High probability inclusions are Kuaishou Technology (1024 HK), Smoore International (6969 HK), Nongfu Spring (9633 HK), JD Health (6618 HK) and JD Logistics (2618 HK).
- Currently, index turnover due to capping/float changes is low which will allow more stocks to be added to the index. Increase in the turnover will result in fewer changes.
PCOMP Index Rebalance: EMP, MONDE Could Pop; BLOOM, RRHI Could Drop
- Emperador Inc (EMP PM) and Monde Nissin Corp (MONDE PM) will replace Bloomberry Resorts (BLOOM PM) and Robinsons Retail Holdings (RRHI PM) in the Philippines Stock Exchange PSEi Index (PCOMP).
- There will be a lot to trade from passive funds. Implementation will take place at the close on 11 February – there are only 5 days to go.
- Emperador Inc (EMP PM) has rallied over the last month while the deletions have traded lower. As re-opening plays, the passive selling could provide an opportunity to buy the deletes.
Time Interconnect (1729 HK): Possible Offer
- Time Interconnect Technology (1729 HK) is currently suspended “pursuant to The Hong Kong Code on Takeovers and Mergers“.
- Paul Lo, the chairman, recently increased his stake to ~75% of shares out. A large parcel of shares moved into CCASS late last month.
- Paul Lo, if he is the Offeror, is unlikely to table an Offer price significantly higher than the last close, given the recent price increase. A take under is possible.
Mercari – Don’t Panic Sell
- Mercari opened down 11.7% and has now recovered to be down “only” 8.5%.
- While our impression of results yesterday was negative the intensity of the move is overdone in our view.
- We still believe that momentum is likely to be muted for a while but the current price is not unattractive.
CLPH (1589 HK): Composite Doc Out. Offer Now Open
- China Logistics Property Holdings (1589 HK)‘s Composite Document has now been despatched. The Offer is open for acceptance with a first close on the 25 February.
- The Offer from JD.com is conditional on 50% acceptances, with 66.4% in the bag.
- Done deal and trading through terms. The IFA considers the Offer is fair and reasonable.
Before it’s here, it’s on Smartkarma
