In today’s briefing:
- SenseTime (20 HK): Lock-Up Expiry Will Bring BIG Passive Flow
- Australia: S&P/ASX, FTSE, REMX, GDXJ Flows on Friday
- Link Admin: Dye & Durham’s Deal All But Dead
- Tianqi Lithium A/H Listing – Back once Again, This Time with a More Compelling Industry Backdrop
- ACCC’s Concerns Likely to End in a Link-DND Deal Bust
SenseTime (20 HK): Lock-Up Expiry Will Bring BIG Passive Flow
- SenseTime Group (20 HK) currently has a float of 1.4%. That will increase to 46% at the end of June as pre-IPO and cornerstone investor lock-ups end.
- The Hang Seng Tech Index FAF increase and potential inclusion in the Hang Seng China Enterprises Index will require passive trackers to buy 700m shares early September.
- Economic stimulus in China, outlook for China tech, lock-up expiry, inclusion in Southbound Connect and flows from passive trackers will drive the stock for few months and provide trading opportunities.
Australia: S&P/ASX, FTSE, REMX, GDXJ Flows on Friday
- Changes to the S&P/ASX indices, FTSE All-World/All-Cap, VanEck Vectors Rare Earth/Strategic Metals (REMX US) and VanEck Vectors Junior Gold Miners (GDXJ US) will be implemented at the close tomorrow.
- The stocks with passive inflows have outperformed the stocks with passive outflows over the last couple of months and post-announcement. There will be pre-positions on a lot of names.
- Short interest has increased on nearly all the deletes from the S&P/ASX indices, while short interest movement on the stocks with passive inflows has been mixed.
Link Admin: Dye & Durham’s Deal All But Dead
- This transaction is looking increasingly toast. The ACCC has outlined significant preliminary competition concerns with Dye & Durham’s (D&D) proposed acquisition of Link Administration (LNK AU).
- Separately, Link’s subsidiary, Link Fund Solutions Limited, has been notified that an application for a “Group Litigation Order” has been filed in the English High Court.
- Link has to exit PEXA for this transaction to proceed. But how badly do D&D want PEXA? Will they walk? Time to look at Link fundamentally, separate from D&D’s Offer.
Tianqi Lithium A/H Listing – Back once Again, This Time with a More Compelling Industry Backdrop
- Tianqi Lithium (TL) is looking to raise up to US$1.5bn via its H-shares listing. It undertakes mining of lithium ore and manufacturing of lithium concentrate, lithium compounds and derivatives.
- TL was the largest producer of mined lithium globally in terms of output and ranked third in terms of revenue generated from lithium in 2020, according to Wood Mackenzie .
- In this note, we look at the company’s past performance and the deal dynamics.
ACCC’s Concerns Likely to End in a Link-DND Deal Bust
- The ACCC’s Statement of Issues noted “significant preliminary competition concerns” in relation to Dye & Durham/DND’s acquisition of Link Administration (LNK AU). The findings will be announced on 8 September.
- There is no easy fix. We think that satisfying the ACCC requires a PEXA Group (PXA AU) stake disposal which could trigger a material adverse clause.
- Link aims to proceed with the 13 July scheme meeting but this is a broken deal. While our SoTP suggests upside, there are no short-term positive catalysts.
Before it’s here, it’s on Smartkarma
