In today’s briefing:
- TIP Customized Taiwan Select High Div Index Rebalance Preview: US$2.8bn Trade as Adds Outperform
- Auckland Airport (AIA NZ) Placement: Potential Index Flows
- Kadokawa (9468 JP): Take Profits as a Sony Privatisation Rumours Surface
- CES China Semiconductor Chips Index Rebalance: Multiple Index Inclusions for the Adds
- Nifty Next50 Index Rebalance Preview: Big Capping Flows in December; Methodology Change Coming?
- Mitsubishi Logisnext (7105) – The Next Target in Logistics Space?
- What Is the Real Purpose of President Yoon’s Martial Law – To Reveal Election Fraud?
- Taiwan Top 50 ETF Rebalance: Big Buying in Yang Ming Marine (2609 TT) In Two Weeks
- Flow Trading Setup Triggered by Korea Zinc’s 21%p Float Rate Cut in KOSPI 200
- Balancing The Scales: EUDR’s Evolving Impact On The Rubber Market
TIP Customized Taiwan Select High Div Index Rebalance Preview: US$2.8bn Trade as Adds Outperform
- The TIP Taiwan Select High Dividend ETF (00919 TW) tracks the TIP Customized Taiwan Select High Dividend Index and has an AUM of TWD 285bn (US$8.75bn).
- We forecast 8 changes a side at the December rebalance with an estimated one-way turnover of around 16% and a round-trip trade of around US$2.8bn.
- An equal weighted basket of potential inclusions has outperformed an equal weighted basket of potential deletions since the start of July with most of the outperformance coming from September.
Auckland Airport (AIA NZ) Placement: Potential Index Flows
- Auckland City Council is looking to sell 163.23m shares of Auckland Intl Airport (AIA NZ) in a clean-up trade. This is big at NZ$1.3bn and 64 days of ADV.
- The placement was expected by the market and the stock has run up despite that. The stock is in a trading halt and should open lower.
- There will be passive buying at the time of settlement of the placement shares and that will mop up around 15% of the offering.
Kadokawa (9468 JP): Take Profits as a Sony Privatisation Rumours Surface
- Kadokawa Dwango (9468 JP) shares rose 16% after Reuters reported that Sony Corp (6758 JP) is in talks to acquire it. Kadokawa confirmed an initial letter of intent.
- The privatisation interest is unsurprising as Kadokawa’s publishing arm, acclaimed intellectual properties, and positioning in the anime industry would be attractive to Sony.
- The upside is limited as the last close reflects a significant takeover premium. There is a risk if a binding proposal emerges, it could be takeunder like Bain/T-Gaia.
CES China Semiconductor Chips Index Rebalance: Multiple Index Inclusions for the Adds
- CSI announced the changes for the December rebalance after market close on 29 November and the changes will be effective after the close of trading on 13 December.
- There are 3 changes for the index, and we estimate one-way turnover of 1.7% resulting in a round-trip trade of CNY 570m (US$79m).
- Nexchip Semiconductor (688249 CH) and United Nova Technology (688469 CH) are adds to other indices as well and the impact on the stocks will be a lot higher.
Nifty Next50 Index Rebalance Preview: Big Capping Flows in December; Methodology Change Coming?
- Following the introduction of 45 stocks in the F&O segment from 29 November, there will be big capping changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) in December.
- We estimate one-way turnover of 21.9% leading to a one-way trade of INR 75bn (US$881m). There are 25 stocks with over 1x ADV to trade.
- There could be changes to the index methodology announced in the next few months and that could result in the deletion of a couple of constituents in March.
Mitsubishi Logisnext (7105) – The Next Target in Logistics Space?
- A Nikkei article this morning several hours pre-open said that Mitsubishi Heavy Industries (7011 JP) was preparing to sell its listed forklift subsidiary Mitsubishi Logisnext Co., Ltd. (7105 JP).
- The story says “Investors had been pressuring Mitsubishi Heavy to spin off or delist Logisnext” and we know the TSE dislikes dual listings. I would have expected a buy-in but…
- There are a number of reasons why a buyer could find this asset attractive. I suggest reading all the way through and the tone of the Conclusions.
What Is the Real Purpose of President Yoon’s Martial Law – To Reveal Election Fraud?
- One of the most important questions about the martial law three days ago is why did President Yoon send special forces (297) to the National Election Commission?
- President Yoon may have ordered troops to be deployed to the NEC to get to the bottom of the election fraud since all the important election servers are stored there.
- It is EXTREMELY DIFFICULT to prove an election fraud. Even if President Yoon declares a war on election frauds, he must have extraordinary pieces of data to back this up.
Taiwan Top 50 ETF Rebalance: Big Buying in Yang Ming Marine (2609 TT) In Two Weeks
- Yang Ming Marine Transport (2609 TT) will replace Airtac International (1590 TT) in the Yuanta/P-Shares Taiwan Top 50 ETF at the close of trading on 20 December.
- Yang Ming Marine Transport (2609 TT) will also be added to the Yuanta/P-shares Dividend Plus ETF in December, so there will be increased flow and impact from the passive buying.
- There has been an increase in cumulative excess volume in Yang Ming Marine Transport (2609 TT) but there is a similar trend in other stocks from the sector.
Flow Trading Setup Triggered by Korea Zinc’s 21%p Float Rate Cut in KOSPI 200
- Korea Zinc’s free float is dropping from 52% to 31%, a 21%p cut.
- Despite rising volume, retail still dominates. With this trend continuing, the 80,000-share sell volume is unlikely to get buried without triggering noticeable price moves.
- Ahead of big one-day flow events, shorts are loaded, causing a dip. On rebalance day, traders buy back, triggering a bounce. This event is likely to follow the same pattern.
Balancing The Scales: EUDR’s Evolving Impact On The Rubber Market
- FAQ and guidance documents bring clarity
- Synthetic rubber out of the purview of EUDR
- Allows for rubber suppliers in countries like Vietnam and Indonesia to catch up
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