In today’s briefing:
- China’s [Maybe] Biggish [Quasi?] Bazooka
- Korea Exchange Announces The Korea Value Up Index
- Quiddity Leaderboard CSI 300/500 Dec 24: Massive Increase in AUMs Causes Flow Expectations to Soar
- NIFTY Indices: Flows (Post Capping) At the Close Tomorrow; Round-Trip US$3.3bn
- A Special Rebalancing Of Korea Value-Up Index Is Likely in December 2024
- K Bank IPO (279570 KS): Index Inclusion Timeline
- Sun Art Retail (6808 HK): COFCO Offer?
- Quiddity Leaderboard S&P 500 Dec 24: Two ADDs (One Biggie), Two DELs, Possible Big Intrareview Moves
- New World Dev (17 HK): Board Games
- Latest Forecast for Korea Zinc’s Tendering Rate
China’s [Maybe] Biggish [Quasi?] Bazooka
- Today, in a press conference held jointly by the Governor of the PBOC, the Director of the Financial Regulatory Bureau, and Chairman of the CSRC, China announced market stimulus measures.
- The PBOC will cut RRR 50bp, the 7-day repo rate 20bp, guide effective mortgage rate cuts, and lower minimum down payments on second homes. There are other commercial RE measures.
- Three major stock market measures were announced. A RMB500bn collateral swap programme, PBOC backing RMB300bn bank loans for corps to buy stocks, and a Plan to increase Central Huijin investments.
Korea Exchange Announces The Korea Value Up Index
- Korea Exchange announced the long awaited Korea Value Up Index (“K Value Up Index”) (composed of 100 stocks) today.
- Korea Exchange used a 5-step screening process to select the 100 companies in this index including market cap, profitability, shareholder returns, market evaluation, and capital efficiency.
- This Value Up index is part of the bigger “Corporate Value Up ” program in Korea. These efforts to improve Korea’s corporate governance policies is a marathon, not a sprint.
Quiddity Leaderboard CSI 300/500 Dec 24: Massive Increase in AUMs Causes Flow Expectations to Soar
- CSI 300 represents the 300 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges. CSI 500 is the next 500.
- In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in December 2024.
- Since our last insight in August, there has been a sharp increase in reported AUMs tracking CSI 300 and CSI 500. This has caused our flow expectations to rise sharply.
NIFTY Indices: Flows (Post Capping) At the Close Tomorrow; Round-Trip US$3.3bn
- The NIFTY Index, Nifty Next 50 Index, NSE Nifty Bank Index, CNXIT Index, Nifty Midcap 150 Index, Nifty100 Low Volatility30 Index and the CPSE ETF rebalance at the close tomorrow.
- The round-trip trade across the indices is US$3.3bn and there are 13 stocks with over 1 day of ADV to trade from passive trackers.
- Stocks with the largest inflows are Trent, Bharat Electronics, Canara Bank, Bharat Heavy Electricals, Oil & Natural Gas Corp, Coal India, Hindustan Aeronautics and InterGlobe Aviation.
A Special Rebalancing Of Korea Value-Up Index Is Likely in December 2024
- On 26 September, the Korea Exchange announced that it is considering a “special rebalancing” of the Korea Value-Up Index in December 2024.
- In our view, the probability of this special rebalancing occurring by the end of this year is high at about 85%+.
- If there is a special rebalancing, KB Financial, Hana Financial, Samsung Life Insurance, SK Telecom, and KT could be considered the top candidates for inclusion.
K Bank IPO (279570 KS): Index Inclusion Timeline
- K Bank (279570 KS) is looking to raise up to KRW 984bn (US$738m), valuing the company at KRW 5tn (US$3.75bn) at the top end of the IPO price range.
- Close peer KakaoBank (323410 KS) and regional peer SBI Sumishin Net Bank (7163 JP) have been trading lower recently and the IPO could price lower than the top end.
- The change in KOSPI2 INDEX Fast Entry rules will leave the stock out of the index till June 2025. Inclusion in global indices will have to wait a while too.
Sun Art Retail (6808 HK): COFCO Offer?
- Alibaba Group Holding (9988 HK)-backed hypermarket play Sun Art Retail (6808) is currently suspended pursuant to the Takeovers Code.
- Reportedly, SASAC-backed COFCO Group may acquire Alibaba’s 78.7% stake. Sun Art’s shares are up 45% since the middle of the month.
- Alibaba exiting – if true – follows JD.com (9618 HK) (and DFI Retail Group Holdings (DFI SP)) selling their respective stakes in Yonghui Superstores Co., (601933 CH) earlier this week.
Quiddity Leaderboard S&P 500 Dec 24: Two ADDs (One Biggie), Two DELs, Possible Big Intrareview Moves
- The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
- In this insight, we take a look at the upcoming constituent changes in the run up to the December 2024 index rebal event.
- We expect two regular changes in December 2024. There are also several live spin-off and M&A events which could trigger intra-review index changes in the late-2024/early-2025.
New World Dev (17 HK): Board Games
- Evidently the influence of a younger hip third-generation tycoon-scion was not the panacea for New World Development (17 HK) and its ongoing issues in the HK/China property space.
- As widely expected, Adrian Cheng is stepping down as NWD’s CEO, to be replaced by Eric Ma, Hong Kong’s former secretary for development.
- NWD will also sell the rights to provide property management services under the K11 brand to Adrian; and potentially sell its stake in Kai Tak Sports Park to its parent.
Latest Forecast for Korea Zinc’s Tendering Rate
- Overseas institutions might tender around 4%, locals about 6%, giving a realistic max of 10%. MBK may struggle to even reach that minimum of 7%.
- Mirae Asset and Samsung Life, holding the largest portion of the targetable stakes, hinted they’ll participate in the tender but won’t tender all their shares.
- Allocation risk for the tender is minimal, but cancellation risk remains. MBK may barely exceed the 7% minimum, making predictions tough and reducing chances of a post-tender stock price drop.
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