In today’s briefing:
- Minebea Mitsumi Overbids Yageo for Shibaura Electronics (6957)
- Northern Star’s Acquisition of De Grey Mining: The Many Index Implications & Flows
- Midea Group (300 HK): Cornerstone Lock-Up Expiry and Upcoming Index Flows
- Fast Retailing (9983 JP): More Capping-Led Selling in September (And Maybe More in March)
- CNI Semiconductor Chips Index Rebalance Preview: One Change in June
- UK: Price War Dents Spring Inflation
- Horizon Robotics IPO Lockup- US$7bn Expiry with Scattered Shareholding and Lots of CCASS Movement
- De Grey Mining/Northern Star Resources: The Passive Flows
- Quiddity Leaderboard CSI 300/500 Jun25: End of Reference Period Soon; ~US$6bn Total One-Way
- Chagee Holdings (CHA US) IPO: Global Index Inclusion Timeline
Minebea Mitsumi Overbids Yageo for Shibaura Electronics (6957)
- In early February, Yageo Corporation (2327 TT) made an unsolicited bid for Shibaura Electronics (6957 JP) at ¥4,300/share. They had approached in October 2024, and continued approaches through end-January.
- Shibaura’s bankers approached Minebea Mitsumi (6479 JP) in January. Due diligence, then bids. They bid ¥4,600. Not enough said the SC. Then Trump. Then ¥4,400. Now ¥4,500 accepted 9 April.
- But Trump tariffs relief came 9 April US time. And the Offer Price is below the mid-point of ALL three different financial advisors. I think this is not done yet.
Northern Star’s Acquisition of De Grey Mining: The Many Index Implications & Flows
- Northern Star Resources (NST AU)‘s acquisition of De Grey Mining (DEG AU) is expected to complete in the next 3 weeks.
- There will be an ad hoc inclusion to the S&P/ASX 200 (AS51 INDEX) and passive buying in Northern Star Resources (NST AU) from a bunch of trackers of different indices.
- The acquisition brings Northern Star Resources (NST AU) close to inclusion in the S&P/ASX 20 Index, but it’s not there yet.
Midea Group (300 HK): Cornerstone Lock-Up Expiry and Upcoming Index Flows
- Midea Group listed in September 2024 by selling 650.85m shares (including the overallotment option) and raising HK$35.7bn (US$4.6bn). A large part of the offering was allocated to cornerstone investors.
- Given the large company market cap and a free float that met the inclusion threshold, Midea Group (300 HK) was added to global indices via Fast Entry.
- The lock-up expiry on cornerstone investors will increase the float for the stock in the global indices and Hang Seng TECH Index (HSTECH INDEX) over the next two months.
Fast Retailing (9983 JP): More Capping-Led Selling in September (And Maybe More in March)
- Fast Retailing (9983 JP)‘s weight in the Nikkei 225 (NKY INDEX) has increased to 10.81% which will lead to another reduction in the CPAF in September.
- Even after the reduction in CPAF and an increase in BayCurrent Consulting‘s PAF in September, there is a possibility of Fast Retailing being capped again in March 2026.
- The continued passive selling sets up interesting trading opportunities after periods of Fast Retailing (9983 JP) outperformance versus the other index constituents.
CNI Semiconductor Chips Index Rebalance Preview: One Change in June
- There could be one change for the CNI Semiconductor Chips Index with Nexchip Semiconductor (688249 CH) replacing Amlogic Shanghai (688099 CH) in June.
- Passive trackers are estimated to buy 1.4x ADV in Nexchip Semiconductor and sell 0.8x ADV in Amlogic Shanghai. There will be buying in Semiconductor Manufacturing International Corporation (SMIC) due to capping.
- The forecast add and delete have performed in line since the start of the year but there has been a move higher in the last few weeks.
UK: Price War Dents Spring Inflation
- A supermarket price war hit food prices, slowing UK CPI inflation below the headline consensus again. Upside news in clothing was offset by downside in game prices.
- Repeating 2008’s experience would drive a game price rebound, but the food effect is more likely to persist. The median inflationary impulse should also rebound soon.
- Unit wage costs remain inconsistent with the target, while energy and water utility bills will drive a massive jump in April. We still forecast a final 25bp BoE rate cut in May.
Horizon Robotics IPO Lockup- US$7bn Expiry with Scattered Shareholding and Lots of CCASS Movement
- Horizon Robotics (9660 HK) raised around US$800m in its Hong Kong IPO in October 2024. The lockup on its pre-IPO investors is set to expire soon.
- Horizon Robotics (HR) is a provider of advanced driver assistance systems (ADAS) and autonomous driving (AD) solutions for passenger vehicles, empowered by its proprietary software and hardware technologies.
- In this note, we will talk about the lockup dynamics and possible placement.
De Grey Mining/Northern Star Resources: The Passive Flows
- With De Grey Mining (DEG AU) shareholders approving the acquisition by Northern Star Resources (NST AU), we move to the phase of passive index flows.
- As expected, Generation Development Group (GDG AU) will be added to the S&P/ASX 200 (AS51 INDEX) at the close on 23 April to replace De Grey Mining (DEG AU).
- There will be passive inflows for Northern Star Resources (NST AU) from some local and global index trackers due to the increase in the number of shares outstanding.
Quiddity Leaderboard CSI 300/500 Jun25: End of Reference Period Soon; ~US$6bn Total One-Way
- CSI 300 represents the 300 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges. CSI 500 is the next 500 names.
- In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in June 2025.
- Currently, we see 6 ADDs/DELs for the CSI 300 index and 50 ADDs/DELs for the CSI 500 index.
Chagee Holdings (CHA US) IPO: Global Index Inclusion Timeline
- Chagee Holdings (CHA US) is looking to raise up to US$473m in its IPO, valuing the company at up to US$5.2bn. The offering is expected to price today, list tomorrow.
- Media reports indicate that cornerstone investors have indicated demand for US$205m of the offering. There is no mention of a lock-up on those investors yet.
- The stock could be added in one global index in August (with a higher probability of inclusion in November), while inclusion in the other global index is likely in December.
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