In today’s briefing:
- Sea Ltd (SE US): Tencent’s Selldown and Upcoming MSCI Passive Inflow
- ASX100/200/300 Index Rebalance Preview (March 2022): A Lot Happening From Now to March
- TOPIX-Nikkei Skew Trade Looking Increasingly Juicy
- Aequitas 2021 IPOs and Placements Performance Review – Busiest Year on Record
- Nippon Building Fund (8951) – Calculating Passive Tracking of J-REITs and Index Events Around Offers
Sea Ltd (SE US): Tencent’s Selldown and Upcoming MSCI Passive Inflow
- Sea Ltd (SE US) stock was down a lot since the announcement of its Q3 results. Tencent (700 HK) selling a 2.6% stake yesterday took the stock down even further.
- Given the large drawdown and Tencent (700 HK) locking in its remaining Sea Ltd (SE US) holding for the next 6 months, the stock could rally in the short term.
- There will be passive inflow from MSCI trackers in February as a part of the tranched inclusion and then more in May due to an increase in the FIF.
ASX100/200/300 Index Rebalance Preview (March 2022): A Lot Happening From Now to March
- There could be 2 changes to the ASX100 and ASX200 prior to the March rebalance due to the acquisitions of Ausnet Services (AST AU) and Sydney Airport (SYD AU).
- There will also be the large BHP Group (BHP AU) upweight and funding trade following unification, and possibly the Afterpay Touch (APT AU) acquisition by Square Inc (SQ US).
- Then there will be more changes to the ASX200 and ASX300 at the March rebalance. There could be a lot of new listings included in the ASX300.
TOPIX-Nikkei Skew Trade Looking Increasingly Juicy
- Our suggested TOPIX-Nikkei skew trade continues to grind out positive returns with relatively low volatility.
- With Nikkei starting to noticeably underperform over the last few days we believe faster outperformance could be ahead.
- In particular we believe two of the worst performing legs here could start to contribute.
Aequitas 2021 IPOs and Placements Performance Review – Busiest Year on Record
- 2021 marked our sixth year covering Equity Capital Markets (ECM) in Asia Pacific.
- Most markets were in top gear on the ECM front and we ended the year covering the highest number of IPOs and the second highest number of placements since inception.
- For those not familiar with our coverage, we aim to cover all IPOs and placements with a minimum deal size of US$100m across Asia-Pacific, including China ADRs.
Nippon Building Fund (8951) – Calculating Passive Tracking of J-REITs and Index Events Around Offers
- Nippon Building Fund (8951 JP) announced a smallish primary offering to assist in funding a portion of its Asset Replacement Campaign involving sales and purchases and an uplift in DPU.
- That is an occasion to look at how much of float is held by passive trackers.
- A test was done on the top 10 J-REITs on a holder-by-holder basis to see what one could expect at a minimum. The result may surprise some.
Before it’s here, it’s on Smartkarma