In today’s briefing:
- Sembcorp Marine (SMM SP): MSCI Inclusion Confirmed as Shorts Surge
- Sembcorp Marine (SMM SP) – MSCI Pulls a Surprise Late Inclusion – All Engines Reverse Full!
- Ecopro Co: Shorting Entry Points on CB Conversion Event
- Amvis Holdings Placement – Has Done Exceptionally Well, Now It’s Prime Time
- Fujitec EGM Coming 24 Feb – It’s a Close-Run Thing
- Foreign Room Race for MSCI Re-Inclusion: SK Telecom Is Unexpectedly Rising
- Jiangnan Group (1366 HK): Chairman/CEO’s Privatisation Offer at HK$0.40
- KOSPI200 Index Rebalance Preview: Changes in April & June
- Pushpay Holdings: ACC & Nikko Say No To Scheme
- Nitro Software: KKR’s Offer Unconditional. This Is Potentia’s For The Taking
Sembcorp Marine (SMM SP): MSCI Inclusion Confirmed as Shorts Surge
- Keppel Corp (KEP SP) shares will trade ex-distribution on 23 February and the settlement of the new Sembcorp Marine (SMM SP) shares is expected to take place on 1 March.
- MSCI has announced the inclusion of Sembcorp Marine (SMM SP) in the MSCI Singapore Free Index (SIMSCI INDEX) at the close on 1 March.
- There are a lot of recent shorts on Sembcorp Marine (SMM SP) and there could be buying on the stock following the announcement of the MSCI inclusion.
Sembcorp Marine (SMM SP) – MSCI Pulls a Surprise Late Inclusion – All Engines Reverse Full!
- Last night, MSCI announced Sembcorp Marine (SMM SP) will be added to MSCI Standard effective 2 March as the KOM Consideration Shares become tradable. This is something of a surprise.
- That other index family announced a temp line would be added to the index on receipt by Keppel shareholders. This dramatically changes the Day1 overhang arithmetic.
- It erases most but not all of the Day 1 passive overhang, and means adding shares for the existing SMM portion. Medium-long-term active overhang is unchanged.
Ecopro Co: Shorting Entry Points on CB Conversion Event
- For the recent conversion, the listing date is March 3rd, involving 500K shares. Despite the ongoing rally, there is a possibility of a significant price impact due to the volume.
- We still have 1,632,333 shares to be converted. This represents 6.5% of the SO. There is a high likelihood that these will also be applied for conversion soon.
- Assuming that it occurs in increments of 400-500K, there could be roughly 3-4 opportunities for shorting.
Amvis Holdings Placement – Has Done Exceptionally Well, Now It’s Prime Time
- Amvis Holdings Inc (7071 JP) (AH)’s founder aims to raise around US$250m via a secondary follow-on offering.
- The deal will increase the free-float of the stock and will lead to the stock being transferred to the Prime segment.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Fujitec EGM Coming 24 Feb – It’s a Close-Run Thing
- Fujitec management is under the gun. Last week, both major international proxy advisors – ISS and Glass Lewis – generally favoured Oasis’ Spill The Board candidate slates.
- Fujitec Co Ltd (6406 JP), of course, had their opinion on the matter (Additional Explanatory Material, Response re ISS, Response re Glass Lewis)
- How this breaks is a question. Shareholder structure analysis may take us there, but this could end mixed.
Foreign Room Race for MSCI Re-Inclusion: SK Telecom Is Unexpectedly Rising
- Looking at the recent pattern, SKT’s fast-rising is quite noticeable. Its foreign room rose to 12.08%. On the other hand, KT’s foreign room growth seems to be slowing somewhat.
- SKT’s pace is fast. If the current pace continues, there will be even the possibility of inclusion with a full adjustment factor of 1.0, exceeding 25%, by the August review.
- We should design a momentum trading setup targeting the point when SKT’s foreign room decline trend will be reflected into an MSCI re-inclusion momentum.
Jiangnan Group (1366 HK): Chairman/CEO’s Privatisation Offer at HK$0.40
- Jiangnan (1366 HK) disclosed a scheme privatisation offer from Mr Chu Hui (Chairman and CEO) at HK$0.40 per share, a 107.3% premium to the undisturbed price (HK$0.193 on 13 February).
- The key condition is approval by at least 75% of disinterested shareholders (<10% of all disinterested shareholders rejection). The shareholder with a blocking stake will be supportive.
- The price is final and attractive in the context of historical prices and multiples. The scheme meeting is likely in mid-May. At last close, the gross spread is 12.7%.
KOSPI200 Index Rebalance Preview: Changes in April & June
- Samyang Foods (003230 KS) will replace Hyundai Greenfood (005440 KS) in the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) at the close on 12 April.
- We expect DGB Financial Group (139130 KS) will replace Meritz Securities (008560 KS) in early April.
- Then we expect another 3 changes at the regular rebalance in June. The potential adds have moved sharply higher recently and there are flows from other index trackers too.
Pushpay Holdings: ACC & Nikko Say No To Scheme
- The Scheme Meeting for BGH/Sixth Street’s NZ$1.34/share Offer for church donor management play Pushpay Holdings (PPH NZ) will take place on the 3 March.
- Accident Compensation Corporation (ACC), holding 6.2% of shares out, said it will vote against the Scheme. Nikko Asset Management (1.4%) also said they will reject the Offer.
- Shares have wobbled and are now 5.5% adrift of terms. BGH/Sixth Street still has the flexibility to bump.
Nitro Software: KKR’s Offer Unconditional. This Is Potentia’s For The Taking
- Alludo has declared its Offer of A$2.15 cash per Nitro Software Ltd (NTO AU) share free from all remaining conditions.
- Separately, Potentia’s due diligence is expected to conclude tomorrow, the 22 February, with the expectation it bumps its current offer of A$2.00/share.
- Currently trading at A$2.20 per share suggesting limited upside from here.
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