In today’s briefing:
- IDX30/LQ45/IDX80 Index Rebalance: 4 Days to Implementation
- S&P/ASX Index Rebalance Preview: Potential Changes in September
- Solactive Global Uranium & Nuclear Components Index Rebalance Preview: Potential Changes
- ChiNext/ChiNext50 Index Rebalance Preview: Potential Changes & Basket Performance
- Index Rebalance & ETF Flow Recap: ASX, Chinext, URA, Korea Stocks, NKY
- S&P/ASX200 Ad Hoc Index Rebalance & Update to Potential Changes in September
- SBI Shinsei Bank (8303) Calls Its EGM and Appraisal Rights Seekers Prepare for Battle
- Nippon Paint (Part I): A Deep Dive into NP’s Japan Business
- TRYT IPO: Trading Debut
- Rohm (6963): Investment in Toshiba Rounds Out Long-Term Plans
IDX30/LQ45/IDX80 Index Rebalance: 4 Days to Implementation
- There are 3 changes for the IDX30 Index, 6 changes for the LQ45 Index, and 7 changes for the IDX80 Index at the rebalance to be implemented on 31 January.
- Largest passive inflows are expected to be on Sumber Alfaria Trijaya Tbk Pt (AMRT IJ) and Surya Esa Perkasa (ESSA IJ).
- With only 4 days to implementation, there will be relatively big moves on stocks that have large flow/impact from passive fund trading.
S&P/ASX Index Rebalance Preview: Potential Changes in September
- We forecast 22 changes across the ASX50 Index, ASX100 Index, S&P/ASX 200 (AS51 INDEX) and ASX300 Index at the September rebalance.
- Some of the changes are high probability while others are close to cutoffs. The impact of passive trading will be pretty large on a lot of stocks.
- Short interest on the potential deletes indicates some pre-positioning but there should still be a fair bit more to do.
Solactive Global Uranium & Nuclear Components Index Rebalance Preview: Potential Changes
- Based on prices and turnover from 10 July, there could be one deletion from the index in July. Plus there will be capping and float changes.
- There are four stocks that meet the inclusion criteria but all are non-pure play companies and the index is already at the limit of 15 non-pure play companies.
- There will be a large impact on a lot of stocks but the flows are not very large due to the limited assets tracking the index.
ChiNext/ChiNext50 Index Rebalance Preview: Potential Changes & Basket Performance
- One third of the way through the review period, we forecast 10 changes for the ChiNext Index (SZ399006 INDEX EQUITY) and 5 changes for the ChiNext 50 Index in December.
- Passive trackers are estimated to trade around +/-0.5 days ADV on most of the potential adds/deletes, though there are some deletes that will have over 1 day ADV to sell.
- The potential inclusion to one or both indices have outperformed the potential deletes by a huge margin in the 5 months. We’d wait for a pullback to re-enter positions.
Index Rebalance & ETF Flow Recap: ASX, Chinext, URA, Korea Stocks, NKY
- Busy week in India with the adhoc changes to the NIFTY, NSE Nifty Next 50, S&P BSE SENSEX and Nifty Bank due to the HDFC Limited and HDFC Bank merger.
- The IDX could announce the changes to the IDX30, LQ45 and IDX80 indices in the coming week, though there is no firm schedule for announcements.
- Yet another week of inflows to the Tracker Fund of Hong Kong Ltd (2800 HK) ETF and outflows from the Hang Seng H Share Index ETF (2828 HK).
S&P/ASX200 Ad Hoc Index Rebalance & Update to Potential Changes in September
- Ventia (VNT AU) will replace Blackmores Ltd (BKL AU) in the S&P/ASX 200 (AS51 INDEX) at the close on 21 July.
- The ad hoc change will lead to changes in the list of potential adds and deletes at the regular scheduled rebalance in September.
- Weebit Nano Ltd (WBT AU) is now a potential add in September and could see some pre-positioning in the near future.
SBI Shinsei Bank (8303) Calls Its EGM and Appraisal Rights Seekers Prepare for Battle
- The SBI Holdings Tender Offer for SBI Shinsei Bank (8303 JP) was completed about four weeks ago, and in something of a surprise, only 3.7% of 26.98% minority holdings tendered.
- The stock traded above terms every day during the Tender Offer Period. People accumulated in order to pursue their appraisal rights later. That is big.
- This week, SBI Shinsei announced the schedule of dates relating to the squeezeout EGM. The record date was early. The reverse stock split announced is as expected, possibly game-able.
Nippon Paint (Part I): A Deep Dive into NP’s Japan Business
- This is the First of a series of reports on Nippon Paint Holdings (4612 JP) and in this insight, we deep dive into the company’s Japanese business.
- The automotive coating biz in Japan is heavily reliant on the domestic automotive market while decorative paints is facing challenges due to slowdown in population in the country.
- The outlook for Japan biz remains stagnant with growth rates slowing down and margins on a downward trend.
TRYT IPO: Trading Debut
- Tryt Inc (9164 JP) priced its IPO at JPY1,200 per share to raise gross proceeds of US$339 million. The shares will start trading on 24 July.
- We previously discussed the IPO in TRYT IPO: The Bull Case, TRYT IPO: The Bear Case, TRYT IPO: Valuation Insights and TRYT IPO: Revised IPO Price Range Remains Unattractive.
- The market sentiment on the sector has broadly remained unchanged since the release of the prospectus. Our analysis suggests that Tryt is, at best, fully priced at the IPO price.
Rohm (6963): Investment in Toshiba Rounds Out Long-Term Plans
- As expected, Rohm has decided to invest ¥300 billion in the JIP-led buyout of Toshiba: ¥100 billion in voting equity shares and ¥200 billion in non-voting preferred shares.
- This would make Toshiba an equity-method affiliate of Rohm, facilitating synergetic cooperation in power semiconductors. The investment is large, but Rohm would still have a sound balance sheet.
- Rohm also plans to buy Solar Frontier’s Kunitomi factory to meet SiC power device capacity requirements through 2030. Investors can now focus on profit growth, which should resume next year.
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