In today’s briefing:
- The Prosus/Naspers Ouroboros Spits Out Its Tail (Unwinds Cross-Holding to Go Back to Old Pair)
- HDFC/HDFC Bank Mega Merger: Are We There Yet?
- NTT’s Really Big/Weird Stock Split Goes Ex- 29 June 2023. Now With D-Points!
- PCOMP Index Rebalance Preview: Just the Ad Hoc Change
- Dali Foods (3799 HK): Founder’s Scheme
- Potential Changes to NPS’s KOSDAQ Benchmark with the Launch of KOSDAQ Global Index ETFs
- CFD Liquidation in Korea: Posco DX, Celltrion Siblings, and Potential Next Targets
- Poly Culture (3636 HK)’s Pre-Conditional Merger By Absorption
- SIA Placement – Selldown Isn’t Particularly Well Flagged. Overhang Is Too Large to Ignore
- Tryt IPO – Peer Comp – One of the Widest Margins Historically, but Has Lagged over the Track Record
The Prosus/Naspers Ouroboros Spits Out Its Tail (Unwinds Cross-Holding to Go Back to Old Pair)
- In mid-September 2019, Naspers (NPN SJ) listed Prosus (PRX NA) on international markets, but the law required Naspers own 70+% of Prosus and it created a dual-layer NAV Discount Trade.
- In summer 2021, they announced an Exchange Offer, where Naspers holders could get Prosus, and Prosus would end up owning 49% of Naspers, creating a cross-holding circularity – an Ouroboros.
- In summer 2022, they launched open-ended buyback programmes, and they’ve bought back a lot. NOW they are unwinding the Ouroboros, going back to the pre-EO structure. buybacks will continue.
HDFC/HDFC Bank Mega Merger: Are We There Yet?
- An interview with Deepak Parekh set a bunch of stocks on fire. Then came the HDFC Bank (HDFCB IN) exchange announcement that said the dates were still tentative.
- Indications are that the merger could be effective 1 July and HDFC Limited (HDFC IN)‘s last trading day would be 13 July.
- The merger will have an impact on both HDFC stocks and on other stocks that could be added to the NIFTY Index, NIFTYJR INDEX and SENSEX Index.
NTT’s Really Big/Weird Stock Split Goes Ex- 29 June 2023. Now With D-Points!
- NTT (Nippon Telegraph & Telephone) (9432 JP) is splitting its stock 25:1 on record date 30 June 2023. That means it goes ex- at the new price on 29 June.
- The day before, the stock is up nearly 5% on heavy volume. This is likely punters buying before it splits so one round lot will be <¥20,000 vs ~¥420,000 yesterday.
- But there is a new attraction for retail, somewhat un-noticed.
PCOMP Index Rebalance Preview: Just the Ad Hoc Change
- With a couple of trading days to the end of the review period, we do not forecast any changes for the Philippines Stock Exchange PSEi Index (PCOMP INDEX) in August.
- However, there could be an ad hoc change if Metro Pacific Investments Co (MPI PM) is delisted. The stock now trades above the tender offer price.
- Bloomberry Resorts (BLOOM PM) is the highest ranked non-constituent and the stock has started to move higher again, likely driven in part by potential index inclusion.
Dali Foods (3799 HK): Founder’s Scheme
- Late last night (27 June), Dali Foods Group (3799 HK) a leading branded F&B play, announced a privatisation Offer by way of a Scheme from its founder/chairman/CEO Xu Shihui.
- The cancellation price, which has been declared final, is HK$3.75/share, is a respectable 37.87% premium to undisturbed, but…
- Xu and concert parties control 88.89%, with disinterested shareholders holding 11.11%, therefore a blocking stake at the Scheme meeting is just 1.11% of shares out.
Potential Changes to NPS’s KOSDAQ Benchmark with the Launch of KOSDAQ Global Index ETFs
- NPS has expressed concerns about the wide risk range of the KOSDAQ 150 index, and there has been speculation about whether they will take advantage of the KOSDAQ Global Index.
- The launch of these ETFs should be closely watched as it could potentially be a turning point in the investment patterns of local pension funds in KOSDAQ.
- It may be worth considering the constituents included in this index where the NPS ownership stake does not reach 5%.
CFD Liquidation in Korea: Posco DX, Celltrion Siblings, and Potential Next Targets
- Yesterday and today, there have been observed cases in Korea that are suspected to be caused by a sudden drop in stock prices due to CFD liquidation trading.
- Yesterday it was Celltrion with its two siblings, and today it is Posco DX. I have found candidates that may have similar stock price movements.
- These candidates experienced a notable increase in their stock prices from late March to mid-April, and they have a relatively high margin transaction ratio.
Poly Culture (3636 HK)’s Pre-Conditional Merger By Absorption
- After shares were suspended on the 20 June, art and culture play Poly Culture Group Corp H (3636 HK) has announced a pre-conditional privatisation at HK$8.88 per H-share.
- This Offer, from SOE Poly Group, is by way of a Merger by Absorption, which incorporates a Scheme-like vote. There is no tendering condition.
- The premium to last close is 77.6%; and a 112.5% premium to the five-day closing average.
SIA Placement – Selldown Isn’t Particularly Well Flagged. Overhang Is Too Large to Ignore
- Napier (Temasek) is looking to raise around US$300m via its secondary selldown in Singapore Airlines (SIA SP).
- The deal isn’t very well flagged given that the investor hadn’t earlier given any explicit guidance of a selldown.
- Post-Selldown, Temasek will still own over 50% of SIA’s shares outstanding, so the overhang will be a large one.
Tryt IPO – Peer Comp – One of the Widest Margins Historically, but Has Lagged over the Track Record
- Tryt Inc (9164 JP) is looking to raise about US$460m in its Japan IPO.
- Tryt Inc (Tryt) offers employee placement services and temporary staffing services for the elderly care, nursing care and childcare workers segments.
- We have looked at the company’s past performance in our earlier notes, in this note we will undertake a peer comparison.
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