In today’s briefing:
- Yuanta/P-Shares Taiwan Dividend Plus ETF: June Rebalance Preview
- Rakuten Bank IPO Trading – Ample Upside
- Rakuten Bank (5838) IPO – Post-IPO Trading Volume Decay and RB’s Place Among Banks (Part 3)
- Quiddity Leaderboard TWSE Div+ Jun 23: Take the Win on YFY Now
- Big Yuexiu Property (123 HK) Rights Issue – 3 Capital Actions from Here to Mid-June
- Seven & I: Founder’s Death Fuels Value Act’s Activism, Angers The Board, Reduces Short Thesis Risk
- Flow Trading Opportunities on LG Chem with Potential Inclusion in Battery ETFs
- Yuexiu Property (123 HK): US$1.1bn Dilutive and Unnecessary Rights Issue
- Quiddity Leaderboard TWSE50/100 Jun 23: Tong Hsing Is a Div+ DEL as It Stands
- Wesfarmer’s Non-Binding Offer For Silk
Yuanta/P-Shares Taiwan Dividend Plus ETF: June Rebalance Preview
- Using data from the close on 19 April, there could be 5 changes to the Yuanta/P-Shares Taiwan Dividend Plus ETF in June.
- There will also be capping and funding flows that will lead to a one-way turnover of 13.6% and a one-way trade of US$885m.
- There are 10 stocks with at least 3 days ADV to trade from passive trackers and another 10 stocks that have at least 1 day ADV to trade.
Rakuten Bank IPO Trading – Ample Upside
- Rakuten Bank (5838 JP), the online banking arm of Rakuten (4755 JP), raised around US$630m in its Japan IPO.
- RB is the largest internet bank in Japan, by number of accounts. As of Dec 22, it had 13.3m deposit accounts with a total deposit base of JPY8.8tn.
- In our earlier notes, we have looked at various aspects of the deal. In this note, we talk about the deal dynamics and trading updates.
Rakuten Bank (5838) IPO – Post-IPO Trading Volume Decay and RB’s Place Among Banks (Part 3)
- To look at the Rakuten Bank (5838 JP) IPO and how trading and pricing may occur, some are looking at SBI Sumishin Net Bank (7163 JP).
- To understand the movements of SBI Sumishin Net Bank, it may help to look at other IPOs in Japan and how they trade post-IPO.
- I looked at the last 200+ IPOs in Japan to understand volume decay and price evolution. It leads to suggestions for investors regarding Rakuten Bank.
Quiddity Leaderboard TWSE Div+ Jun 23: Take the Win on YFY Now
- In this insight, we take look at Quiddity’s estimations for index changes and capping flows for the Taiwan Div+ index for the June 2023 review.
- I currently see 4 ADDs/DELs but there are several names close to the border and expectations could change before the base date as prices move around.
- My latest estimation for one-way flow is around US$778mn which translates to a turnover of approximately 12%.
Big Yuexiu Property (123 HK) Rights Issue – 3 Capital Actions from Here to Mid-June
- After being halted this morning before the start of trade, post-close, Yuexiu Property (123 HK) announced a fully-underwritten Rights Offering.
- The Rights Offering intends to raise HK$8.36bn issuing 30 Rights for every 100 Shares held, at a subscription price of HK$9.00, a 23.3% discount to TERP.
- This will take a moderately-levered property/services/leaseco and add more capital to it. Not terribly bullish. Looks opportunistic. And one has to look through 3 capital actions to see dividends ahead.
Seven & I: Founder’s Death Fuels Value Act’s Activism, Angers The Board, Reduces Short Thesis Risk
- Value Act’s investor activism campaign picked up steam following the death of Seven & I Holdings (3382 JP) founder.
- The board of Seven & I may have been aggravated by Value Act’s unreasonable demands and timing, leading to their first angry response in over two years.
- The damaged relationship between Seven & I and Value Act reduces the upside risk to our short thesis from disposal of underperforming businesses.
Flow Trading Opportunities on LG Chem with Potential Inclusion in Battery ETFs
- We now have an environment that allows Korea’s battery ETFs to include LG Chem in upcoming reviews. KODEX is in June, and TIGER is in July.
- If LG Chem is included in each review, the expected one-day inflow is at 0.7-0.8x DTV, which can lead to a price impact similar to that of SKIET in 2021.
- We should consider setups targeting this, including Long Short, which utilizes LG Energy Solution or LG Corp as a hedge.
Yuexiu Property (123 HK): US$1.1bn Dilutive and Unnecessary Rights Issue
- Yuexiu Property (123 HK) will raise US$1.1bn through a rights offering – 30 rights shares for every 100 existing shares. The subscription price is HK$9.00, a 23.3% discount to TERP.
- As Yuexiu is in no danger of breaching the three red lines, the rights issue is an opportunistic play on capitalising on the strong share price run.
- Rights shares will be entitled to the final and special dividend announced on 15 March. Shares go ex-rights on 2 May and the rights start trading on 15 May.
Quiddity Leaderboard TWSE50/100 Jun 23: Tong Hsing Is a Div+ DEL as It Stands
- In this insight, we take a look at the names leading the race to become ADDs/DELs for the T50 and T100 Indices for the June 2023 Rebalance.
- At present, there are no ADDs/DELs expected for the T50 index but there could be a couple of changes for the T100 index.
- With roughly a month remaining to the base date, there could be more changes to our expectations in the run up to the June 2023 rebalance.
Wesfarmer’s Non-Binding Offer For Silk
- Wesfarmers Ltd (WES AU) has made a non-binding indicative Offer, by way of a Scheme, for Silk Laser Australia (SLA AU), an operator of specialist clinic networks across Australia.
- The Offer Price of $3.15/share is a decent 30.2% premium to last close. Wilson Asset Management, with 9.3% of shares out, is supportive.
- Wesfarmers has been granted 30 days to undertake due diligence on an exclusive basis.
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