In today’s briefing:
- Nikkei 225 Index Rebalance: Performance of Potential Adds/Deletes & Positioning
- Li Ka-Ching! Cheung Kong (1 HK) Offloads Panama Ports To Blackrock
- Local Brokers Sound Off on 40% IPO Lock-Up—A Major Setup for Offshore Traders
- Nikkei 225 Index Rebalance: Baycurrent (6532) Replaces Mitsubishi Logistics (9301); Kokusai Elec
- Japan Post Bank US$4bn Placement Updates-Performing Similar to Its Last. Past Large Deals Comparison
- KOSPI200 Index Adhoc Rebalance: Kumyang (001570 KS)’s Designation Opens Up an Index Spot
- StubWorld: Cheung Kong’s Geopolitics
- Sunevision (1686 HK): Data Center Rally Brings Passive Flows
- Nikkei 225 Mar25 Rebal: BayCurrent (6532) IN, Mitsubishi Logi (9301) OUT (Re-IPO). Kokusai MIA
- HEM: Pausing Policy Easing
Nikkei 225 Index Rebalance: Performance of Potential Adds/Deletes & Positioning
- The changes to the Nikkei 225 (NKY INDEX) as part of the March rebalance should be announced in just over 2 weeks. We expect 2-3 changes at the review.
- The forecast adds have massively outperformed the forecast deletes and the Nikkei225 Index over every time period going back 3 months with the largest outperformance in the last month.
- Positioning appears to be stretched in one forecast add while there appears to be under positioning in a couple of the forecast deletes.
Li Ka-Ching! Cheung Kong (1 HK) Offloads Panama Ports To Blackrock
- As part of a US$22.8bn transaction, BlackRock, Global Infrastructure Partners and Terminal Investment, have agreed to buy two contentious Panama ports from Li Ka-shing’s CK Hutchison (1 HK) (CKH).
- The transaction also includes an 80% stake in CKH’s ports subsidiaries, which operate 43 ports comprising 199 berths in 23 countries.
- CKH expects cash proceeds in excess of US$19bn. CKH’s current market cap was – at the time of deal – also ~US$19bn.
Local Brokers Sound Off on 40% IPO Lock-Up—A Major Setup for Offshore Traders
- This 40% rule will distort bookbuilding, force down-pricing, choke float post-listing, and amplify volatility.
- Offshore investors like us benefit most—cheap IPO pricing with no lock-up. Local brokers see this as a giveaway to foreign funds and pushed back hard last Friday.
- FSS won’t budge—40% lock-up is happening. If issues arise post-implementation, they might adjust later.
Nikkei 225 Index Rebalance: Baycurrent (6532) Replaces Mitsubishi Logistics (9301); Kokusai Elec
- In a big surprise, there is only one change for the Nikkei 225 (NKY INDEX) in March with BayCurrent Consulting (6532 JP) replacing Mitsubishi Logistics (9301 JP).
- The non-inclusion of Kokusai Electric (6525 JP) is a big surprise given that the stock was ranked among the top 75 stocks by liquidity. There could be selling near-term.
- BayCurrent Consulting (6532 JP) has been added at a 0.5 PAF and that will increase to 1 in September. Fast Retailing (9983 JP) could be capped yet again in September.
Japan Post Bank US$4bn Placement Updates-Performing Similar to Its Last. Past Large Deals Comparison
- Japan Post Holdings (6178 JP) (JPH) aims to sell around US$4bn worth of Japan Post Bank (7182 JP) (JPB), trimming its stake to below 50%.
- JPH had last sold around US$9bn worth of JPB shares in Mar 2023. That deal had a similar structure and it didn’t end up performing well.
- We have looked at the deal dynamics in our previous note. In this note, we talk about the updates since then.
KOSPI200 Index Adhoc Rebalance: Kumyang (001570 KS)’s Designation Opens Up an Index Spot
- Kum Yang (001570 KS)‘s designation as an Administrative Issue should result in the deletion of the stock from the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) later this week.
- Taekwang Industrial (003240 KS) could be added to the index as an ad hoc replacement. The stock was in line to be added to the index at the June rebalance.
- Miwon Specialty Chemical (268280 KS) ranked higher than Taekwang Industrial (003240 KS) at the December rebalance but appears to fail the liquidity screen.
StubWorld: Cheung Kong’s Geopolitics
- CK Hutchison Holdings (1 HK) (CKH) is trading “cheap” as Panama’s Supreme Court agrees to consider a request to nullify CKH’s canal concessions.
- Preceding my comments on CKH, CK Infrastructure Holdings (1038 HK) (coming up cheap on my monitor), and Power Assets Holdings (6 HK) are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Sunevision (1686 HK): Data Center Rally Brings Passive Flows
- The huge rally in SUNeVision Holdings (1686 HK) will bring passive inflows to the stock after being added to a global sector index.
- Estimated passive buying is 19.4m shares (US$22m; 0.55x ADV) with implementation scheduled for the close of trading on 21 March.
- Shorts have risen sharply in the last couple of weeks and cumulative excess volume has jumped too. But we see a similar pattern in a close peer.
Nikkei 225 Mar25 Rebal: BayCurrent (6532) IN, Mitsubishi Logi (9301) OUT (Re-IPO). Kokusai MIA
- The March 2025 Nikkei 225 Average Review was announced last night. Something of a disaster for Team Quiddity. I had expected 2-3 ADDs and 2-3 DELETEs.
- We got only one change, and that was my second choice ADD and second choice DELETE. Top 75 name Kokusai Electric (6525 JP) was missing in action. BIG Disappointment.
- BayCurrent Consulting (6532 JP) is in at a PAF of 0.5, with an upweight end-Sep. Mitsubishi Logistics (9301 JP) is OUT. Fast Retailing (9983 JP) will see US$2.3bn of sells.
HEM: Pausing Policy Easing
- Central banks are advised to slow, pause, or stop reducing rates due to rising inflation and labour costs.
- Inflation is unexpectedly increasing, and labour costs are exceeding target-consistent levels.
- Monetary policy is almost neutral according to activity trends, but rate hikes in 2026 could counteract unnecessary easing.
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