In today’s briefing:
- S&P/ASX Index Rebalance (Sep 2023): Mostly Expected with a Few Surprises
- September Nikkei 225 Review – Lasertec, Mercari, Nitori IN, Expected DELETEs Out (Matsui the Biggie)
- Nikkei 225 Index Rebalance: Mercari, Lasertec, Nitori IN; Nippon Glass, Mitsui E&S, Matsui Sec OUT
- KOSDAQ150 Index Rebalance Preview: Strong Momentum Leads to Outperformance
- March 2024 Nikkei 225 Rebal – Look for Zozo, Ryohin Keikaku, and Maybe a Socionext Split
- Merger Arb Mondays (04 Sep) – Eoflow, JSR, Seiko PMC, ENM, NWS, Costa, Symbio, Origin
- MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: Review Period Complete
- ARM Holdings Pre-IPO – Peer Comparison – The Smallest and One of the Slowest
- Integral Corporation IPO: New Price Range Is Tempting
- Ohayo Japan| Lack of Direction with US Closed; JAPAN X: JFE to Raise ¥200bn for Green Steel Drive
S&P/ASX Index Rebalance (Sep 2023): Mostly Expected with a Few Surprises
- There is 1 change for the S&P/ASX100 Index, 5 adds/ 6 deletes for the S&P/ASX 200 INDEX, and 10 adds/ 8 deletes for the S&P/ASX300 Index at the September rebalance.
- There will be 4-14 days of ADV to trade on the S&P/ASX100 Index and S&P/ASX 200 INDEX adds while the impact on the deletions is between 3-12 days of ADV.
- On average, the adds to the S&P/ASX 200 (AS51 INDEX) and S&P/ASX 300 Index have outperformed the deletes over the last few months.
September Nikkei 225 Review – Lasertec, Mercari, Nitori IN, Expected DELETEs Out (Matsui the Biggie)
- Today, somewhat earlier than expected), the Nikkei Index Team announced the changes to the Nikkei 225.
- Lasertec Corp (6920 JP), Mercari (4385 JP), and Nitori Holdings (9843 JP) are added. Nippon Sheet Glass (5202 JP), Mitsui E&S Holdings (7003 JP), and Matsui Securities (8628 JP) removed.
- That triggers flows of about ¥480bn a side, and some big, big changes. The announcement helps understand new process better.
Nikkei 225 Index Rebalance: Mercari, Lasertec, Nitori IN; Nippon Glass, Mitsui E&S, Matsui Sec OUT
- Mercari (4385 JP), Lasertec (6920 JP) and Nitori (9843 JP) will replace Nippon Sheet Glass (5202 JP), Mitsui E&S (7003 JP) and Matsui Securities (8628 JP) in the Nikkei 225.
- As expected, Nitori Holdings (9843 JP) will be added at half the planned PAF since the trading value is low compared to the expected index weight.
- Passive trackers need to buy between 1-17 days of ADV on the adds while selling between 1.2-16.5 days of ADV on the deletes. There is a big funding trade too.
KOSDAQ150 Index Rebalance Preview: Strong Momentum Leads to Outperformance
- Over two-thirds of the way through the review period, we see 14 potential changes for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the December rebalance.
- There could be index changes even before the December rebalance if there are delistings and stocks migrate from the KOSDAQ Market to the KOSPI Market.
- Momentum in Korea has been strong. The potential adds have outperformed the potential deletes over the last few months and there could be further outperformance.
March 2024 Nikkei 225 Rebal – Look for Zozo, Ryohin Keikaku, and Maybe a Socionext Split
- Now that the September 2023 Nikkei 225 Rebal is announced, we look at the March 2024 rebal and its possibilities.
- Socionext (6526 JP) is the only automatic ADD, but it might not be. ZOZO Inc (3092 JP) and Ryohin Keikaku (7453 JP) would be sector balance ADDs.
- Fast Retailing (9983 JP) could get capped if it outperforms Nikkei 225 by ~10%+ to 31Jan2024. And Nitori Holdings (9843 JP) will see an add of ~14 days of ADV.
Merger Arb Mondays (04 Sep) – Eoflow, JSR, Seiko PMC, ENM, NWS, Costa, Symbio, Origin
- We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads – Seiko Pmc Corp (4963 JP), 111 Inc (YI US), Costa Group Holdings (CGC AU), Symbio Holdings (SYM AU), Eoflow (294090 KS), Orecorp Ltd (ORR AU).
- Lowest spreads – Healius (HLS AU), Toyo Construction (1890 JP), Pacific Current (PAC AU), T&K Toka Co Ltd (4636 JP), Allkem Ltd (AKE AU), Celltrion Healthcare (091990 KS).
MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: Review Period Complete
- The review period for the MVIS Global Rare Earth/Strategic Metals Index ended 31 August. The changes will be announced on 8 September and implemented at the close on 15 September.
- Coming in around the 85% cutoff, Rising Nonferrous Metals Share (600259 CH) is a potential inclusion. There are two stocks that are very close to the 98% deletion threshold.
- Lake Resources Nl (LKE AU) is a deletion from the S&P/ASX 200 (AS51 INDEX) at the September rebalance and there could be more to sell if deleted from this index.
ARM Holdings Pre-IPO – Peer Comparison – The Smallest and One of the Slowest
- Softbank Group (9984 JP) aims to raise around US$8-10bn via selling some of its stake in ARM Holdings’ US IPO.
- ARM develops and licences high-performance, low-cost, and energy-efficient CPU products and related technology, which is used by semiconductor companies and OEMs to develop their own products.
- In our earlier note, we looked at Arm’s past performance. In this note, we undertake a peer comparison.
Integral Corporation IPO: New Price Range Is Tempting
- Integral Corporation (5842 JP) has set its IPO price at JPY2,300-2,400 per share, 18%-29% lower than the IPO reference price range of JPY2,800-3,400 per share.
- We previously discussed the IPO in Integral Corporation IPO: The Bull Case, Integral Corporation IPO: The Bear Case and Integral Corporation IPO: Valuation Insights.
- Our analysis suggests that the revised IPO price range is attractive compared to peer multiples. The re-rating of peers since the release of the prospectus also makes the offer tempting.
Ohayo Japan| Lack of Direction with US Closed; JAPAN X: JFE to Raise ¥200bn for Green Steel Drive
- OVERSEAS. US LABOR DAY HOLIDAY. With US out, No leaders in Global Equities; European shares closed flat on thin Volumes; China’s measures to support Property market taking hold.
- JAPAN.US Markets Off. NKY Futs vs Cash -0.1%; USDJPY 146.5; Nikkei Rebal: Mercari, Lasertec, Nitori ADDED; Nippon Sheet Glass, Mitsui E&S, Matsui Sec OUT; JFE 200bn Equity/CB raising
- JAPAN X: JFE Holdings Plans to Raise ¥200 Billion for Carbon Emissions Reduction Efforts. Still need clarity willingness of customers to accept “green pricing”. Watch Nippon Steel and Kobe Steel.
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