In today’s briefing:
- Sembcorp Marine (SMM SP): MSCI Inclusion Confirmed as Shorts Surge
- Japan Post Bank (7182 JP) ¥70bn ToSTNeT-3 Buyback
- MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: One Add, One Delete Possible
- KRX New Deal Index Rebalance Preview: Potential Flows as Announcement Looms
- Kansai Paint (4613 JP) Secondary Offering & Buyback and All the Subsequent Flows
- China Vanke Placement – A Placement Was Expected, Unclear if It Was This One
- China Vanke (2202 HK): Placement & Index Flows
- HKBN Ltd (1310 HK) Mulls I Square’s HGC Offer
- SBI Sumishin NetBank (7163 JP) Re-IPO Details, Fundamentals Tearsheet, Likely Index Treatment
- SET50 Index Rebalance: SAWAD Added; Buying at the Close Today
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.
Japan Post Bank (7182 JP) ¥70bn ToSTNeT-3 Buyback
- As expected, Japan Post Bank (7182 JP) has announced their ToSTNeT-3 buyback of ¥70 billion on Day 1 of the potential TN-3 Buyback period.
- Also as somewhat expected, investors and traders pushed up the stock price today after the news there would be a buyback, hoping to buy then sell, or short today’s close.
- Japan Post Holdings (6178 JP) will offer shares. Others obviously will too. How this works and what you have to watch out for discussed below.
MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: One Add, One Delete Possible
- The review period for the March rebalance ended yesterday. Announcement of the changes will be made on 10 March and will be implemented at the close on 17 March.
- Mineral Resources (MIN AU) is a potential index inclusion if it is added to the index universe with lithium revenues nearing the 50% threshold.
- ioneer Ltd (INR AU) is very close to the 98% deletion threshold and could be removed from the index at the March rebalance.
KRX New Deal Index Rebalance Preview: Potential Flows as Announcement Looms
- The review period for the March rebalance ended on 31 January, changes will be announced in the next few days and implemented at the close of trading on 9 March.
- We forecast one add/delete for the Secondary Battery Index and Game Index, and a couple of adds/deletes for the BBIG Index. There will be a lot of capping changes.
- The largest inflows are expected on Posco Chemical (003670 KS) and Douzone Bizon (012510 KS); the largest outflows are expected on SK Innovation (096770 KS) and KMW (032500 KS).
Kansai Paint (4613 JP) Secondary Offering & Buyback and All the Subsequent Flows
- Today after the close, Kansai Paint (4613 JP) announced a passel of crossholders would sell 26.2mm shares in a Secondary Offer. They also announced a buyback.
- The buyback, spending up to ¥12bn to buy back up to 8.2mm shares, starts after the Offering is delivered, and extends until 15 March 2024.
- This offering reduces cross-holder “strategic holdings” by a third. This will impact FFW. Complicated index impacts will occur over time.
China Vanke Placement – A Placement Was Expected, Unclear if It Was This One
- China Vanke aims to raise around US$500m in its H-share primary placement.
- Vanke had recently stated that it aimed to raise around US$2bn via an A-share private placement, so a placement was expected for sure.
- In this note, we will talk about the placement and run the deal through our ECM framework.
China Vanke (2202 HK): Placement & Index Flows
- News reports indicate that China Vanke (H) (2202 HK) is looking to place 300m shares at a price range of HK$12.93-13.20/share to raise around US$500m.
- The 300m shares is nearly 33 days of ADV, but around 11-12% of the new shares will be bought by passive trackers early next week and provide near-term support.
- China Vanke (H) (2202 HK) trades cheaper than its peers on EV/Sales, EV/EBITDA and forward PE. Shorts have ticked higher in the last couple of weeks.
HKBN Ltd (1310 HK) Mulls I Square’s HGC Offer
- Reportedly (Bloomberg) Hong Kong broadband play HKBN Ltd (1310 HK) has received a takeover offer from I Square’s HGC Global Communications.
- HKBN’s shares were halted in the late afternoon trading session yesterday after gaining 11.6%. The reason stated for the suspension was “possible inside information“, not pursuant to the Takeovers Code.
- Last May, Bloomberg reported that KKR, PAG, and Stonepeak – amongst others – were considering bids for HKBN. The market cap at the time was US$1.6bn versus US$934mn now.
SBI Sumishin NetBank (7163 JP) Re-IPO Details, Fundamentals Tearsheet, Likely Index Treatment
- In February 2022, SBI Holdings (8473 JP) and Sumitomo Mitsui Trust Holdings (8309 JP) announced they would IPO SBI Sumishin Net Bank (7163 JP) but that got cancelled by Ukraine.
- Yesterday, they announced they were going to try again. This time, with a reduced price and reduced aspirations. Given the way banks have performed in the last year… 👀
- That changes – completely – the picture of index demand. But it also changes the fundamental picture.
SET50 Index Rebalance: SAWAD Added; Buying at the Close Today
- Srisawad Power 1979 (SAWAD TB) has been added to the SET50 INDEX following the Total Access Communication (DTAC TB) / True Corp Pcl (TRUE TB) merger.
- Passive SET50 INDEX trackers will need to buy 9.7m shares (THB 534m; 1x ADV) of Srisawad Power 1979 (SAWAD TB) at the close of trading today.
- There could be two more changes in June with relatively new listings, Thai Life Insurance (TLI TB) and Betagro (BTG TB), being added to the SET50 INDEX.
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