In today’s briefing:
- MSCI Japan Index Rebalance: Short Build Up Continues as We Near Implementation Day
- Toyo Construction Comes Out Fighting Against YFO, But Sincerely.
- Bank of Kyoto (8369) Surprises With a Cross-Holding Sale Plan (Albeit Small)
- Grab IPO Lock-Up – Over 60% of the Stock Worth Nearly US$8bn Comes Free
- Jinke & Jiayuan: Pledged Shares And Leveraged Property Developers
MSCI Japan Index Rebalance: Short Build Up Continues as We Near Implementation Day
- There are 22 deletions for the MSCI Japan Index at the May SAIR. The changes were expected and there was large short buildup prior to announcement of the changes.
- Shorts have continued to increase to increase over the last week and there could be a reversal over the next few days as shorts start to cover.
- Buying the deletions in the next few days and hedging with Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX) futures could provide superior risk adjusted returns.
Toyo Construction Comes Out Fighting Against YFO, But Sincerely.
- As discussed in the last insight, there was the possibility that YFO was jumping the gun. From the near 100+ pages released by Toyo Construction (1890 JP) today, they did.
- TC accused YFO of being “dishonest” in its attitude and actions, from the “reasons” stated in its Large Shareholder Report and market purchases to YFO’s Murakami-san’s previous interactions.
- What TC doesn’t yet understand is that when a company is in play, if a “market check” comes in, that’s OK. Investors are not hurt by a higher bid.
Bank of Kyoto (8369) Surprises With a Cross-Holding Sale Plan (Albeit Small)
- Bank of Kyoto (8369 JP) has been the poster child for “deep value” Japan traders and occasional wannabe activists. It has a huge equity portfolio which dwarfs market cap.
- Every year, twice a year (end of May and early December) Bank of Kyoto (8369 JP) releases a document for a meeting with analysts and press called Information Meeting.
- This year’s is a little different in that it proposes sales of 10% of its equity portfolio. It’s “small” but worth thinking about.
Grab IPO Lock-Up – Over 60% of the Stock Worth Nearly US$8bn Comes Free
- Grab raised around US$4.5bn in its de-SPAC listing in Dec 2021. The shares are now trading around 68% below the listing price.
- At the time of listing, all of its top investors were locked up for six months. The lock-up expires on 30th May 2022.
- In this note, we will talk about the lock-up dynamics and updates since our last note.
Jinke & Jiayuan: Pledged Shares And Leveraged Property Developers
- On the 21 May, Jinke Property (000656 CH) announced the forced sale of shares by its controlling shareholder. One day later, Jiayuan International (2768 HK) announced a similar event.
- Jinke’s 52.3%-owned Jinke Smart (9666 HK) has now announced an agreement to acquire Jiayuan International’s 73.56% stake in property service play Jiayuan Services Holdings (1153 HK). No price was announced.
- In the past month, Jinke Property is down 24%, Jinke Smart 23%, Jiayuan International 54% and Jiayuan Services 80%. Jiayuan International and Jiayuan Services remain suspended.
Before it’s here, it’s on Smartkarma
