In today’s briefing:
- MSCI May Index Rebalance Preview: Potential FIF Changes & Impact
- HSI Index Rebalance Preview: Will The Pace of Inclusions Pick Up?
- Toshiba (6502) – 3D Writes Another Letter
- ASX200 Index Rebalance: HomeCo Daily Needs REIT (HDN) Replaces CIMIC; More Changes in May & June
- BIG Nikon (7731) Buyback – OK But Should Do Better
MSCI May Index Rebalance Preview: Potential FIF Changes & Impact
- MSCI comprehensively evaluates the free float for stocks at the May SAIR. The changes will be announced on 12 May and implemented at the close on 31 May.
- We expect an increase in the FIF for some stocks. Largest inflows are expected on Tencent (700 HK), Kuaishou Technology (1024 HK), JD Health (6618 HK) and KakaoBank (323410 KS).
- There is reasonably large short interest on some of the stocks and there could be some short covering on stocks where there could be large passive inflows.
HSI Index Rebalance Preview: Will The Pace of Inclusions Pick Up?
- Current at 66 constituents, we expect to reach 80 HSI INDEX constituents by the end of the year before moving higher towards 100 index members in 2023.
- We list 10 stocks that could be added to the index in June – with one-way turnover close to 6%, the actual number of inclusions will be lower.
- We also list out another 8 stocks that could possibly be added in June, though the probability of a September/ December inclusion is higher.
Toshiba (6502) – 3D Writes Another Letter
- On 24 March, the EGM defeated both company and 3D Investment proposals. That night, a leak in the Nikkei said the company would pursue privatisation measures. Supply side interest. Check.
- That same day, Bain signed a “Confirmation Agreement” with lead Toshiba shareholder Effissimo would tender into a Bain Tender Offer. Demand Side interest confirmed. Check.
- Now we have a 3D public letter to the Board demanding 3 measures before the AGM.
ASX200 Index Rebalance: HomeCo Daily Needs REIT (HDN) Replaces CIMIC; More Changes in May & June
- HomeCo Daily Needs REIT (HDN AU) will replace CIMIC Group Ltd (CIM AU) in the S&P/ASX 200 (AS51 INDEX) at the close of trading on 11 April.
- The change has come earlier than expected as Hochtief hold nearly 90% of CIMIC. Positioning on HDN could be light- the stock could rally over the next couple of days.
- There could be another ad hoc change prior to the June rebalance and then there will be more changes at the regular rebalance in June.
BIG Nikon (7731) Buyback – OK But Should Do Better
- Nikon Corp (7731 JP) today announced a Very Large Buyback. This is the third buyback it has announced since spring 2019. The first was short. The next two big.
- The company also announced a new Medium-Term Management Plan for FY2022-2025 today in which they reiterated their existing Shareholder Return Policy of 40+% payout of stable dividends and opportunistic buybacks.
- It’s a decent div, and the buyback is for 6-7% of shares out, but it could do better. The company is hugely cash- and securities holdings-rich. It should do better.
Before it’s here, it’s on Smartkarma
