In today’s briefing:
- Toshiba – ISS Advises Against Breakup Plan
- Jardine Matheson (JM SP): Reloading The Buyback?
- STAR50 Index Rebalance Preview (June): Back to the All Important Question
- KOSPI 200 Rebalancing Screening: Few Noticeable Changes in the Race
- KOSPI Lockup Releases & Likelihood of Hitting the Market
Toshiba – ISS Advises Against Breakup Plan
- This morning Institutional Shareholder Services recommended against both Toshiba’s break up plan and 3D’s alternative proposal.
- Both proposals looked uncertain and with ISS coming out against them it now appears more likely that both will be rejected.
- That leaves Toshiba in limbo once again and we aren’t convinced the exit will be a privatisation.
Jardine Matheson (JM SP): Reloading The Buyback?
- Jardine Matheson Holdings (JM SP)‘s underlying net profit in FY21 was up 39% against 2020, and just 5% shy of 2019’s level.
- The latest US$250mn buyback program appears to have been completed.
- Shares are down ~5% since the FY21 results. At a ~28% discount to NAV, JMH is inexpensive here.
STAR50 Index Rebalance Preview (June): Back to the All Important Question
- There could be 3 or 5 changes to the STAR50 INDEX in June depending on the minimum listing history (6 months or 12 months) used by the index committee.
- Jinko Solar (688223 CH) is a high probability inclusion while Shanghai Microport Endovascular MedTech (688016 CH), ArcSoft Corp Ltd (688088 CH) and DBAPP Security Ltd (688023) are high probability deletions.
- The March rebalance will be implemented at the close tomorrow. The adds have outperformed the deletes post announcement and there could be a reversal from next week.
KOSPI 200 Rebalancing Screening: Few Noticeable Changes in the Race
- KOSPI 200’s June rebalancing review period is six months, from November 1 to April 30. So, we are now over 70% of the review period.
- The addition result is similar to the screening results last month. However, one stock was newly screened. Hana Tour Service sits at the filtering borderline within the Consumer Discretionary Sector.
- As for deletions, Bukwang Pharmaceutical is screened in the healthcare sector instead of Yungjin Pharmaceutical. S&T Motiv in the Consumer Discretionary Sector is additionally listed as a deletion candidate.
KOSPI Lockup Releases & Likelihood of Hitting the Market
- KOSPI has seven lockup release events that are likely to hit the market. And all of them are IPO institutional and ESOP lockups.
- Whether these IPO institutional/ESOP lockups will hit the market directly correlates with the return size from the offering price. And most of them are still far above the offering price.
- Therefore, it is highly likely that a meaningful share price correction will occur on each release date. This correlation pattern has been more pronounced in recent lockup release events.
Before it’s here, it’s on Smartkarma
