In today’s briefing:
- Nikkei 225 Index Rebalance Preview: Market Consultation & Potential Changes
- BHP Woodside Placement – Here Comes the Block, Will Be Tricky Trading over the Next Few Days
- Woodside Block – Medium Bigly, Well-Prepared, and More To Come
- FTSE EPRA Nareit Index Rebalance: Two Adds & Three Deletes with Large Impact
- MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: Stocks Plunge as Cutoff Passes
Nikkei 225 Index Rebalance Preview: Market Consultation & Potential Changes
- The Nikkei 225 (NKY INDEX) market consultation released last week could lead to some tweaks to the index methodology and the stock selection process. Nothing really material enough though.
- Potential index inclusions in September are Renesas Electronics, Oriental Land and Pan Pacific International Holdings, while Toyobo Co Ltd, Nippon Light Metal and Oki Electric Industry are potential index deletions.
- Passive Nikkei 225 trackers will need to buy between 4-9% of the real float on the high/ medium probability names, while they need to buy between 2.5-14 days of ADV.
BHP Woodside Placement – Here Comes the Block, Will Be Tricky Trading over the Next Few Days
- BHP shareholders received US$18bn worth of Woodside petroleum shares on 1st Jun 2022, post the completion of the merger.
- As a part of the distribution, some shares belonging to ineligible and other small shareholders are being sold by the sales agent, JPM, in a US$823m block.
- In this note, we will look at the possible deal dynamics and run the deal through our ECM framework.
Woodside Block – Medium Bigly, Well-Prepared, and More To Come
- The Australian Financial Review’s “Street Talk” column says the Woodside Petroleum (WPL AU) (new ticker is WDS AU) block is out.
- Bookbuild is at $28.65 to $30.19 a share with is a 0% to 5.1% discount to the close (stock was up 1.44% today).
- The size of the trade is apparently 38 million shares. If you have been in the Woodside/Santos trade, I would take the deal, tactically.
FTSE EPRA Nareit Index Rebalance: Two Adds & Three Deletes with Large Impact
- Samty Residential Investment and LOTTE Reit are inclusions while Hang Lung Properties, Henderson Land Development and New World Development are deletions for the FTSE EPRA Nareit Developed Asia Index.
- There is a large impact on all stocks, but the flow is much higher on the deletions and the stocks could drop and underperform their peers.
- Ichigo Inc (2337 JP) is a surprise non-inclusion and could trade lower today providing an opportunity to buy the stock while waiting for a late inclusion announcement.
MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: Stocks Plunge as Cutoff Passes
- Close to the 85% inclusion threshold, Core Lithium Ltd could be added to the MVIS Global Rare Earth/Strategic Metals Index in June. Lake Resources Nl (LKE AU) is also close.
- Australian Strategic Materials (ASM AU) is very close to the 98% deletion threshold. Even if it is not deleted, there will be passive selling due to capping changes.
- Yesterday was the cutoff date for the June review, so today’s steep fall in prices will not affect the ranking of the potential changes.
Before it’s here, it’s on Smartkarma
