In today’s briefing:
- DTAC/True Merger: NBTC Likely to Set Measures to Approve Merger
- Evolution Gaming: The World’s Largest Casino, Which You Probably Never Heard Of
- MVIS Global Junior Gold Miners Index Rebalance: One Delete & Plenty of Float Changes
- MVIS Global Rare Earth/Strategic Metals Index Rebalance: Three Adds, Two Deletes
- Korea ETF Market Size Breakdown from a Flow Trading Perspective
- Japan Weekly | Renova, Mitsubishi Motors, Mercari
- HK Short Interest: Short Spike for Tech Stocks
- CALB IPO Preview
- Onewo IPO: Trade-Offs Vs Peers
- Index Rebalance & ETF Flow Recap: NKY, HSCEI, REMX, GDXJ, Link Admin
DTAC/True Merger: NBTC Likely to Set Measures to Approve Merger
- The Bangkok Post reports that the Thai regulator (NBTC) will propose ten remedial measures to approve the Total Access Communication (DTAC TB)/True Corp Pcl (TRUE TB) merger.
- The NBTC board is not expected to issue a final decision as it waits for an interpretation by the Council of State if it can approve or reject the merger.
- The current share price ratio is 9.511x vs the swap ratio of 10.221x. At last close, DTAC and True’s gross spread to the VTO price is 9.2% and 10.7%, respectively.
Evolution Gaming: The World’s Largest Casino, Which You Probably Never Heard Of
- Although lesser-known, this Swedish company dominates one of the most lucrative segments of the global casino industry.
- In our view, it is probably the only investable casino company, and despite its size, still has a massive growth runway ahead.
- Our DCF model implies a 15%-20% total return for the company’s long-term shareholders.
MVIS Global Junior Gold Miners Index Rebalance: One Delete & Plenty of Float Changes
- Great Panther (GPL US) is a deletion from the VanEck Vectors Junior Gold Miners ETF (GDXJ US). There are a lot of float changes that will result in passive flows.
- One way turnover is estimated at 3.4% and will result in a one-way trade of US$106m at the September rebalance.
- Most index constituents have traded poorly over the last few months and the stocks with passive inflows could outperform their peers in the short-term.
MVIS Global Rare Earth/Strategic Metals Index Rebalance: Three Adds, Two Deletes
- Sayona Mining (SYA AU), Sigma Lithium (SGML US) and Tianqi Lithium (9696 HK) will replace Australian Strategic Materials (ASM AU) and Sierra Rutile Holdings (SRX AU) in the index.
- Sayona Mining (SYA AU) is also an inclusion to the FTSE All-Cap and S&P/ASX 200 on the same day as the VanEck Vectors Rare Earth/Strategic Metals ETF (REMX US) addition.
- We had Sayona Mining (SYA AU) and Tianqi Lithium (9696 HK) as potential adds while Australian Strategic Materials (ASM AU) and Sierra Rutile Holdings (SRX AU) were high probability deletes.
Korea ETF Market Size Breakdown from a Flow Trading Perspective
- There are 611 ETFs with a combined AUM of ₩76T. Korea is in the global top 7. ₩32T worth of ETFs belongs to local equity, half of which are index-trackers.
- The market began to pay attention to the less crowded areas. The result is the rise of sector ETFs. Sector-type has also grown significantly, now with an AUM of ₩8.4T.
- Lower predictability causes their rebalancings to be relatively less crowded. That is, the profit effect of acquiring prior information is much more dramatic on the day of rebalancing trading.
Japan Weekly | Renova, Mitsubishi Motors, Mercari
- The Nikkei was up +2.15% over the past week (-2% YTD): the yen was 1.2% weaker at ¥142/$
- The news was focused on the sharp drop in the yen with even the BoJ Governor Kuroda noting some undesirable effects
- The proportion of female directors rose to 9%, a slight increase over 7.4% in the previous year
HK Short Interest: Short Spike for Tech Stocks
- We analyzed the latest HK SFC report for aggregate short position as of Sep 2nd.
- Top short increases and decreases were tabulated for one week and four week period.
- We highlight short spike for Tencent, Meituan, Jd.com, Baidu, and Cosco Shipping.
CALB IPO Preview
- China Aviation Lithium Battery (CALB) is getting ready for an IPO in Hong Kong.
- In the past several days, CALB received the approval from the Hong Kong stock exchange for an IPO.
- In the next two years, CALB expects its production capacity for lithium batteries to increase to about 55 GWh which is more than 6x the capacity at end of 2021.
Onewo IPO: Trade-Offs Vs Peers
- Onewo Space-Tech (ONEWO HK), China Vanke (000002 CH)’s property management unit, has begun pre-marketing a US$2.0 billion HKEx IPO.
- We previously discussed the IPO in Onewo IPO: The Bull Case and Onewo IPO: The Bear Case.
- A comparison with large-cap peers suggests that Onewo offers large-scale with parentco stability at the cost of low growth runaway from undelivered GFA and gross margin.
Index Rebalance & ETF Flow Recap: NKY, HSCEI, REMX, GDXJ, Link Admin
- The last week had the announcement of the Nikkei 225 (NKY INDEX) September changes and the implementation of the SSE STAR50 (STAR50 INDEX) rebalance.
- The coming week will have the implementation of the FTSE AW/AC, FTSE China 50/A50, Taiwan 50/Div+, STI, EPRA Nareit, S&P/ASX, REMX and GDXJ rebalances.
- There were large outflows from iShares MSCI ACWI ETF (ACWI US) and iShares MSCI Emerging Markets (EEM US) during the week.
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