In today’s briefing:
- Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Last-Second Changes to the Last-Minute Changes
- Hulic Co (3003 JP) Placement: One Big Price Drop Could Lead to Another
- MV Australia Equal Weight Index Rebalance Preview: 1 Close Add & 3 Deletions
- STAR50/STAR100 Index Rebalance: No Changes for STAR50; 4 Changes for STAR100
- Japan Funds: Extreme Stocks
- Six Hang Seng Index Family Indices: Flows for Dec 6 Rebal
- Dai Nippon Placement – Share Buyback Should Aid Deal Performance
- KWEB Index Rebalance: 1 Add & 4 Deletes in December
- Quiddity CSI 300/500 Dec 24 Results: ~90% Hit Rate; Positive Start for the Trade
- WealthNavi (7342 JP): MUFG (8306 JP)’s Opportunistic Tender Offer
Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Last-Second Changes to the Last-Minute Changes
- There are now new changes forecast for the Yuanta/P-Shares Taiwan Dividend Plus ETF in December for a total of 8 inclusions and 7 deletions.
- Constituent changes along with capping changes will lead to a one-way turnover of 21.8% and in a one-way trade of TWD 75.8bn (US$2.33bn).
- The potential changes had a big one-day move yesterday and we expect similar moves over the next couple of days.
Hulic Co (3003 JP) Placement: One Big Price Drop Could Lead to Another
- Overnight, Hulic Co Ltd (3003 JP) announced a placement of 85.37m shares to unwind crossholdings and improve corporate value. There is an overallotment option for another 12.8m shares.
- There will be limited passive buying in the short-term and the number of shares offered is a very large percentage of real float of the stock.
- A price drop of 20% or more puts Hulic Co Ltd (3003 JP) at risk of deletion from a global index and could lead to a further price drop.
MV Australia Equal Weight Index Rebalance Preview: 1 Close Add & 3 Deletions
- With 4 days left to review cutoff, there is 1 close add and 3 potential deletions for the MV Australia Equal Weight Index at the December rebalance.
- Even if there are no constituent changes, capping changes will lead to one-way turnover of 4.6% and a round-trip trade of A$243m.
- The final list of inclusions/exclusions will depend on price movements till Friday and whether the index provider makes any significant changes to the free float of stocks in the universe.
STAR50/STAR100 Index Rebalance: No Changes for STAR50; 4 Changes for STAR100
- As forecast, there are no changes for the SSE STAR50 (STAR50 INDEX) in December while there are 4 changes for the STAR100 Index.
- There will be big outflows for Semiconductor Manufacturing International Corporation (SMIC) (688981 CH) due to SSE STAR50 (STAR50 INDEX) capping. There will be selling from other index trackers too.
- Hainan Jinpan Smart Technology (688676 CH) had been ignored by the index committee at the September rebalance, so this inclusion in the STAR100 Index could come as a surprise.
Japan Funds: Extreme Stocks
- We screen for Japanese companies at the extreme ends of their positioning or momentum ranges among active Japan equity funds.
- Low Positioning coupled with Negative Momentum: Nissan Motor Corp and Misumi Group
- High Positioning coupled with High Momentum: ASICS Corp and Kyushu Railway
Six Hang Seng Index Family Indices: Flows for Dec 6 Rebal
- In this insight, we present the flows to buy and sell for each of the top 6 Hang Seng Index Family indices based on estimated tracking AUM.
- The indices: Hang Seng Index (HSI), HS Tech Index (HSTECH), HS China Enterprise Index (HSCEI), HS HK Biotech (HSHKBIO), HS Internet & Infotech (HSIII), and HS Healthcare Index (HSHCI).
- By Quiddity calculations based on prices of 29 November’s close, there is one-way flow across these six indices of HK$15,894,690,433.49 to trade on 6 December. Roughly speaking.
Dai Nippon Placement – Share Buyback Should Aid Deal Performance
- A group of shareholders are looking to raise US$214m from selling their respective stakes in Dai Nippon Printing (7912 JP).
- While the deal shouldn’t come as a surprise, given the ongoing cross-shareholding unwind narrative in Japan, the timing of such a selldown isn’t always certain.
- In this note, we will talk about the placement and run the deal through our ECM framework.
KWEB Index Rebalance: 1 Add & 4 Deletes in December
- The December rebalance of the KraneShares CSI China Internet ETF (KWEB US) will take place at the close of trading on 13 December.
- Cloud Village (9899 HK) is an add while Lufax Holding (LU US), Ping An Healthcare and Technology (1833 HK), ZX (9890 HK) and YSB (9885 HK) are deletes.
- The deletions of Ping An Healthcare (1833 HK), ZX (9890 HK) and YSB (9885 HK) were forecast and there will be positioning in the stocks. Lufax was a close delete.
Quiddity CSI 300/500 Dec 24 Results: ~90% Hit Rate; Positive Start for the Trade
- The December 2024 index review results for China’s CSI 300 and CSI 500 indices were announced after market close on Friday 29th November 2024.
- There will be 16 ADDs/DELs for CSI 300 and 50 ADDs/DELs for CSI 500.
- The CSI 300 and CSI 500 index rebal events could trigger US$4.5bn and US$3.8bn in one-way flows respectively.
WealthNavi (7342 JP): MUFG (8306 JP)’s Opportunistic Tender Offer
- In response to a Nikkei article, WealthNavi (7342 JP) disclosed Mitsubishi UFJ Financial (MUFG) (8306 JP)’s tender offer at JPY1,950 per share, an 84.3% premium to the undisturbed price.
- The high premium reflects WealthNavi’s steep 46% YTD share price decline, i.e., the timing is opportunistic. The offer is below the Board’s requested price.
- While the irrevocable has a competing offer clause, a competing proposal is unlikely due to MUFG’s stake. However, a bump is possible if activist(s) take around a 15% stake.
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