In today’s briefing:
- Tokio Marine Cross-Shareholding – At Least US$18bn of Cross-Shareholding to Sell
- Modec Placement – Deal Seems a Little Opportunistic but Not Particularly Expensive
- Carlyle To Take KFC Japan (9873) Private at ¥6,500/Share – Big Win For All, a Model Transaction
- Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: 13% One-Way Turnover & US$2.27bn Trade
- MUFG Cross-Shareholding – At Least US$20bn of Cross-Shareholding to Sell, Taking It Slow
- MODEC (6296 JP): The Current Playbook
- A Plausible Explanation for Korea NPS’s Unusually Large Outflow on Local Stocks in May
- FnGuide Top10 Index Rebalance Preview: Two Changes Possible in June
- JAPAN ACTIVISM: Murakami Now 29% of Mitsui Matsushima. Activism? Or Effort to Make Murakami Listco
- StubWorld: Bloisi’s Appointment Stalls The Prosus Accretion Trade
Tokio Marine Cross-Shareholding – At Least US$18bn of Cross-Shareholding to Sell
- The Japanese Financial Services Agency has asked the general insurers to reduce/eliminate their cross-shareholdings.
- Tokio Marine Holdings (8766 JP) had a stake over US$100m in at least 33 listed Japanese stocks, amounting to a total of US$16.5bn.
- In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.
Modec Placement – Deal Seems a Little Opportunistic but Not Particularly Expensive
- Mitsui E&S Holdings (7003 JP) is looking to raise approximately US$451m through a secondary follow-on offering, via selling approximately 21.9m shares (32% of TSO) of Modec Inc (6269 JP)’s stock.
- The deal is a large one to digest at 81 days of three month ADV.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Carlyle To Take KFC Japan (9873) Private at ¥6,500/Share – Big Win For All, a Model Transaction
- Carlyle has a deal to buy Kfc Holdings Japan (9873 JP). ¥6,500/share is a 78% premium to undisturbed as a professional holder sells in an auction to the highest bidder.
- That’s a great format for achieving a great price. And we got one. This should get done easily.
- Importantly, the Bidco is named Crispy KK. It is 100% owned by Juicy KK. Juicy KK itself is 100% owned by Crispy Holdings L.P. Someone had some fun.
Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: 13% One-Way Turnover & US$2.27bn Trade
- Using data from the close on 17 May, there could be 5 changes to the Yuanta/P-Shares Taiwan Dividend Plus ETF in June.
- There will also be capping and funding flows that will lead to a one-way turnover of 12.6% and a one-way trade of US$1.13bn.
- Shorts have increased on the potential adds and potential deletes and covering will lead to rally in some stocks while providing support in others at rebalance implementation.
MUFG Cross-Shareholding – At Least US$20bn of Cross-Shareholding to Sell, Taking It Slow
- Following up on our earlier cross-shareholding notes, in this note we look at Mitsubishi UFJ Financial (MUFG) (8306 JP)’s cross-shareholding.
- MUFG had a stake over US$100m in at least 47 listed Japanese stocks, amounting to a total of around US$19bn.
- In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.
MODEC (6296 JP): The Current Playbook
- Since the US$535 million secondary placement announcement, Modec Inc (6269 JP)’s shares are down 15% from the undisturbed price of JPY3,320 per share (14 May).
- Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Modec’s shares have followed the pattern of previous large placements.
- The offering will likely be priced on 22 May. Investors who have participated in previous large Japanese placements tend to secure positive returns.
A Plausible Explanation for Korea NPS’s Unusually Large Outflow on Local Stocks in May
- NPS’s May net selling of ₩700B likely stems from retrieving outsourced management funds to allocate to the newly selected three value-up outsider managers.
- These value-up managers will start investing in Q3. NPS’s May net selling matches their allocations. We should design a setup targeting the likely inflow into value-up targets starting early July.
- In particular, we should watch non-financial value-up stocks like Kia Corp and Hyundai Motor, which had more significant May price impacts likely due to NPS outflow.
FnGuide Top10 Index Rebalance Preview: Two Changes Possible in June
- The Mirae Asset Tiger Top 10 ETF (292150 KS) tracks the FnGuide Top 10 Index and has an AUM of around US$1.2bn.
- We currently forecast two potential changes at the next rebalance in June – one change is high probability while one could change depending on price moves over the next week.
- The trade has performed well historically with positive performance till implementation followed by reversion post implementation.
JAPAN ACTIVISM: Murakami Now 29% of Mitsui Matsushima. Activism? Or Effort to Make Murakami Listco
- Noted Japanese activist MURAKAMI Yoshiaki and his entities and relations went from 4.98% to 19.88% of Mitsui Matsushima (1518 JP) at an average ¥3,500/share from 2 May through 10 May.
- Then they bought an additional 5.44% on 13 May, just before earnings, in the midst of a huge run-up, paying 40% more for that 5% than the first 5%.
- I thought that might be the end, but in two days, they have bought an additional 9+%. There is something else going on. It is worthy of your attention.
StubWorld: Bloisi’s Appointment Stalls The Prosus Accretion Trade
- Prosus (PRX NA)‘s discount to NAV and implied stub widened after Fabricio Bloisi’s CEO appointment late last week. But the sell-down of Tencent (700 HK) to buy-back Prosus will continue.
- Preceding my comments on Naspers (NPN SJ)/Prosus/Tencent are the current setup/unwind tables for Asia-Pacific Holdcos
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
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