In today’s briefing:
- Shin Kong and Taishin – There’s a Good Value Swap Trade To Do Here
- The TOPIX October FFW Trade – BIG Numbers
- The Tokyo Metro (9023 JP) IPO And Aftermarket – What To Look For
- Tokyo Metro (9023 JP): Listing Tomorrow; Div Yield and Index Flows Should Take It Higher
- Australia: Potential Passive Selling in November Will Be Big
- Surging Buzz Around the Potential Split of Samsung Electronics
- NIFTY200 Momentum30 Index Rebalance Preview: 56% Turnover, Big Trade & Strong Momentum
- Korea Zinc: Remaining Free Float Post Tender and a Margin Call for Choi on Young Poong Precision?
- Tokyo Metro (9023 JP): One Miss; A Bigger Index Inclusion Coming?
- Pony AI Pre-IPO – The Positives – Scaling up Robotaxi & Robotrucks
Shin Kong and Taishin – There’s a Good Value Swap Trade To Do Here
- Media reports indicate that the shareholder base of Shin Kong Financial Holding (2888 TT) and Taishin Financial Holding (2887 TT) have approved their merger.
- Shin Kong meeting results were public just before the market closed. The results from Taishin were known earlier. The market and spread were un-moved. If anything, things widened a little.
- Next, the two companies try to get fair Trade Commission, FSC, and Exchange approval to join to become Taishin Shin Kong FHC. And there’s a good trade to do here.
The TOPIX October FFW Trade – BIG Numbers
- Post-Close on the 5th business day of October every year, the TSE announces the Free Float Weight review for all stocks where the FY ends in the Jan-March quarter.
- Yesterday saw 210 decent changes to FFW (more up than down). There are still 400+ Phased Weight Reductions, 3 new adds (3663, 3993, 9341), and some share cancellation-based share-count reductions.
- It turns out there is a LOT to trade. I see ¥2trln one-way (¥2trln net to buy on 245 names, and ¥2trln to sell on the other nearly 1,900 names).
The Tokyo Metro (9023 JP) IPO And Aftermarket – What To Look For
- The Tokyo Metro (9023 JP) IPO is one of the largest IPOs of recent years, well-flagged, and it is hot hot hot! A super stable, well-known, well-respected, service provider.
- There are numerous attractions but I expect people have not thought too deeply about the demand and supply dynamics of different holder types. It’s worth thinking about.
- This was priced “cheap” but everyone knows that so there may be flippers. This is probably more Japan Post Bank than Japan Post Insurance.
Tokyo Metro (9023 JP): Listing Tomorrow; Div Yield and Index Flows Should Take It Higher
- Tokyo Metro (9023 JP) priced its IPO at the top end (JPY 1200/share), raised JPY 348.6bn (US$2.3bn) and the company is valued at JPY 697bn (US$4.62bn).
- The stock starts to trade today, and the grey market is indicating an open 20% higher. Not surprising considering that the IPO was heavily oversubscribed.
- Even at a price of JPY 1440/share, the estimated dividend yield is 2.78% and that should keep the stock supported. Index inclusions will result in more buying next week.
Australia: Potential Passive Selling in November Will Be Big
- There could be two or three Aussie names that are deleted from global passive portfolios in November. In each of the cases, there is a lot to sell from passives.
- One name is very high probability while the deletion of the others depends on the day of the week chosen.
- Shorts have been built up on the stocks and there are strong indications of positioning. But the extent of the positioning varies, and the stocks could have differently.
Surging Buzz Around the Potential Split of Samsung Electronics
- We’re starting to see some local market players getting ready and setting up trades that bet on a potential split for Samsung Electronics.
- Samsung could leverage the buzz around spinning off its foundry business to split key units—foundry, memory chips, and others—into two or three separate companies at the shareholder meeting.
- Additionally, the valuation gap between Samsung Electronics and Biologics has narrowed more than it has in the last decade, making it an even more attractive opportunity.
NIFTY200 Momentum30 Index Rebalance Preview: 56% Turnover, Big Trade & Strong Momentum
- There could be 16 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 30 December.
- If all changes are on expected lines, one-way turnover is estimated at 55.6% and that will result in a one-way trade of INR 62bn (US$736m).
- Since June, the potential adds to the index have outperformed the index and the potential deletes by a big margin. Momentum could keep the outperformance going till implementation date.
Korea Zinc: Remaining Free Float Post Tender and a Margin Call for Choi on Young Poong Precision?
- According to Korea Zinc, it plans to disclose the treasury shares tender offer results on 28 October.
- We discuss the remaining free float after the tender offer and the probabilities of share price decline or even a share price squeeze post announcement of the tender offer results.
- All in all, this M&A fight for Korea Zinc remains tight with a slight advantage to MBK/Young Poong alliance.
Tokyo Metro (9023 JP): One Miss; A Bigger Index Inclusion Coming?
- Tokyo Metro (9023 JP) had a blockbuster listing yesterday, finishing the day 45% higher. That took the estimated div yield down from 3.33% (at the IPO price) to 2.3%.
- One expected index inclusion will not take place due to insufficient information on IPO allocations and that leads to a much lower free float than expected.
- That inclusion will now be deferred to June; BUT there could be two other (bigger) index inclusions on the cards prior to that.
Pony AI Pre-IPO – The Positives – Scaling up Robotaxi & Robotrucks
- Pony AI (PONY US) an autonomous mobility solutions provider, is looking to raise up to US$300m in its US IPO.
- As per Frost & Sullivan, Pony AI was among the first companies in China to obtain licenses to operate fully driverless robotaxis in all four Tier-1 cities in China.
- In this note, we talk about the positive aspects of the deal.
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