In today’s briefing:
- FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: Market Consultation Results Announced; BIG Trade
- Socionext (6526 JP): Index Inclusion Timeline
- SSE180 Index Rebalance Preview: Stock Connect & MSCI/FTSE Eligibility
- Fast Retailing (9983) | Fantastic Execution at Fantastical Valuation
- GLP J-REIT Placement – Most of the past Deals Have Done Well, This One Could Be Tricky
- Sea Ltd – No Bringing Back to Life For Free Fire, Shopee’s Top Line Growth Could Disappear
- Kingston Financial (1031 HK): What Will Chu Choose To Do?
- S&P BSE/Sensex Quiddity Leaderboard Dec 22: Adani Names with F&O Question Marks Still in the Race
- Intel Vs. TSMC/UMC Long/Short Monitor: Mgmt Call Takeaways, Calculating a Normalized Valuation
- Hong Kong Buybacks Weekly (Oct 14th): Back to 1Y High
FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: Market Consultation Results Announced; BIG Trade
- The number of FTSE TWSE Taiwan Dividend+ Index constituents will be increased from 30 to 50 in one step at the December rebalance.
- There are a few other changes to the index methodology, mainly around the cutoff ranks for inclusion/exclusion with a few additional constraints.
- We forecast 25 adds and 4 deletes to the index with one-way trade over US$2.2bn and big impact on many stocks due to inclusion, exclusion, capping and funding.
Socionext (6526 JP): Index Inclusion Timeline
- Socionext (6526 JP) traded 15.1% higher than its IPO price on listing day. That gives it a market cap of JPY 141.4bn (US$963m).
- Socionext (6526 JP) will be added to the TPX INDEX in November and could be added to the MSCI SmallCap Index in February and the FTSE All-Cap Index in June.
- The close yesterday indicates there could be more buying behind while the TOPIX inclusion in November will be a source of short-term demand for the stock.
SSE180 Index Rebalance Preview: Stock Connect & MSCI/FTSE Eligibility
- Nearing the end of the review period, we expect there will be 18 changes to the SSE180 Index in December. The first-order impact on the stocks is not large.
- Stocks that are not currently in Buy/Sell Stock Connect will be added to the list. That makes them eligible for inclusion in the MSCI and FTSE indices in February/March.
- We see 6 of the potential/close adds being added to the MSCI China Index in February and 8 of the potential/close adds being added to the FTSE All-World/All-Cap in March.
Fast Retailing (9983) | Fantastic Execution at Fantastical Valuation
- We were Bearish on Fast Retailing, mainly due to valuation concerns against global peers. That view still stands.
- We expected cautious guidance reflecting a harsh macro environment. Fast surprised with bullish guidance. That could be a risk.
- We highlight the key slides from the results presentation and re-iterate our view that Fast should not trade at such a premium to its global peers
GLP J-REIT Placement – Most of the past Deals Have Done Well, This One Could Be Tricky
- GLP J-REIT (3281 JP) is looking to raise around US$220m in its placement to acquire five assets, and increase its stake in a sixth one.
- We have covered a number of past deals by the company, almost all of which have done well.
- In this note, we’ll run the deal through our ECM framework and comment on deal dynamics.
Sea Ltd – No Bringing Back to Life For Free Fire, Shopee’s Top Line Growth Could Disappear
- Garena has introduced nine major updates to “Free Fire” since June last-year but none of them has managed to turn around the game’s declining trend and regain the lost users.
- With Sea Ltd (SE US) no longer capable of funding Shopee’s growth, we are expecting e-commerce to start losing its top-line growth potential from 4Q22.
- Even though we are predicting a lot of downside to Sea Ltd over the medium term, an okayish Q3 could see shares bouncing back from the bottom.
Kingston Financial (1031 HK): What Will Chu Choose To Do?
- Hong Kong brokerage Kingston Financial (1031 HK) was suspended this morning pursuant to Hong Kong’s Takeovers Code.
- Chu Yuet Wah is the largest shareholder with 74.6% of shares out.
- Shares are down 98% from the January 2018 peak. A chunky premium may be on the cards if a firm Offer unfolds.
S&P BSE/Sensex Quiddity Leaderboard Dec 22: Adani Names with F&O Question Marks Still in the Race
- In this insight, we take a look at the names leading the race to become ADDs/DELs for the BSE SENSEX, 100, 200, and 500 Indices in the December 2022 Rebalance.
- The reference period for the trading data used for the index selection ends on 31st October 2022.
- At present, I see one change for SENSEX, three changes for BSE 100, and six changes for BSE 200.
Intel Vs. TSMC/UMC Long/Short Monitor: Mgmt Call Takeaways, Calculating a Normalized Valuation
- TSMC says limited impact from U.S. China restrictions — We crosscheck the comments.
- TSMC guidance was strong and gives hope for 1H23 industry improvement. Looks cheap on a cycle-adjusted PE.
- Intel has outperformed TSMC shares despite the recent TSMC rebound.
Hong Kong Buybacks Weekly (Oct 14th): Back to 1Y High
- We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Oct 14th based on HKEx daily reports.
- In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Wuxi Biologics (2269 HK), Aia (1299 HK).
- In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Aia (1299 HK), Wuxi Biologics (2269 HK).
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