In today’s briefing:
- MSCI May 2022 Index Rebalance Preview: Three Weeks to Start of Review Period
- JD.com (9618 HK): Passive Hang Seng Buying in June
- Uniti (UWL AU): Macquarie Hung Out To Dry As Morrison/Brookfield Up Bid
- NIFTY Index Rebalance: Flows at the Close Today
- Jin Jiang Capital (2006 HK): Tardy, But Pre-Con Approvals Were Never In Doubt
MSCI May 2022 Index Rebalance Preview: Three Weeks to Start of Review Period
- Given the market volatility, there have been quite a few changes to the potential inclusions and exclusions at the MSCI May SAIR, especially for China.
- There are now three weeks to the start of the review period and we see 40 potential inclusions and 49 potential deletions. Most of the expected changes are in China.
- The largest potential inclusions are Powerchip Semiconductor Manufacturing, Orient Overseas International, Pop Mart International, Eva Airways, China Airlines, Emtek, KT Corp, Sumber Alfaria Trijaya, Hyundai Heavy Industries and Xtep International.
JD.com (9618 HK): Passive Hang Seng Buying in June
- JD.com Inc. (9618 HK) shares from the Tencent (700 HK) in-specie dividend settled on 25 March. That has increased the number of CCASS shares and the Hong Kong free float.
- Given the large trading volumes in JD.com Inc. (9618 HK) on 25 March and 28 March, we expect most of the forced selling from the ADR allotment is done.
- There will be selling in JD.com Inc. (9618 HK) from active investors and the overhang from the Prosus (PRX NA) holding. Buying from HSI/HSCEI trackers in June could help a bit.
Uniti (UWL AU): Macquarie Hung Out To Dry As Morrison/Brookfield Up Bid
- Morrison, now with Brookfield on a 50/50 basis, have matched Macquarie Asset Management’s Real Assets division / Public Sector Pension Investment Board’s $5.00/share Offer for Uniti Group Ltd (UWL AU).
- The revised proposal was predicated on Uniti severing talks with Macquarie as it may get access to competitively sensitive information. Uniti’s board has acquiesced – “at this time“.
- Share pulled back on the news and closed at a 7.8% gross spread to the indicative terms.
NIFTY Index Rebalance: Flows at the Close Today
- The changes to the NIFTY Index (NIFTY INDEX), Nifty Bank Index (NSEBANK INDEX) and NIFTY NEXT50 Indices were announced on 24 February and will be implemented at the close today.
- There is a fair amount to trade on the NIFTY Index (NIFTY INDEX) and Nifty Bank Index (NSEBANK INDEX) stocks given the sizeable passive assets that track the indices.
- There is pre-positioning on some of the names and there could be opportunities to build positions to play for a reversal.
Jin Jiang Capital (2006 HK): Tardy, But Pre-Con Approvals Were Never In Doubt
- Hotel operator Shanghai Jin Jiang Capital Company Limited (2006 HK) announced yesterday that all pre-conditions to the Offer from Shanghai SASAC have been satisfied.
- The Composite Document is expected to be dispatched on or before the 1 April.
- Based on precedents for the privatisation of PRC incorporated companies, absent a tendering condition, payment is expected around the third week of May, on the assumption the vote gets up.
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