In today’s briefing:
- Crown Resorts (CWN AU): Passive Sell Flow and Potential ASX100/200 Replacements
- FTSE China A50 and FTSE China H50 Indexes & Index Futures: Recent Developments
- LQ45 Index Rebalance Preview (July 2022): Candidates for Change
- Kito (6409) – Now Sitting Pretty
- Australia: S&P/ASX, FTSE, REMX, GDXJ Flows on Friday
Crown Resorts (CWN AU): Passive Sell Flow and Potential ASX100/200 Replacements
- Crown Resorts (CWN AU)‘s Second Court hearing is scheduled for 15 June and the stock is likely to stop trading at the close on that day.
- Estimated passive tracker selling is 62m shares (A$809m; 31.2 days of ADV) of Crown Resorts (CWN AU) and that could open up some arb opportunities.
- We expect Whitehaven Coal (WHC AU) will be added to the S&P/ASX 100 Index, while Coronado Global Resources Inc (CRN AU) could be added to the S&P/ASX 200 (AS51 INDEX).
FTSE China A50 and FTSE China H50 Indexes & Index Futures: Recent Developments
- Between tightening regulations to government and regulatory support for the market to geopolitical issues, there has been a lot of market volatility and investor focus on China.
- Valuations of China focused indices are lower than those of other Developed and Emerging markets.
- Investors can use the SGX FTSE China A50 Index futures and the SGX FTSE China H50 Index futures to get exposure to the onshore and offshore China market.
LQ45 Index Rebalance Preview (July 2022): Candidates for Change
- The review period for the LQ45 Index ends on 30 June. The changes should be announced in the last week of July, becoming effective after the close on 29 July.
- Potential adds are Bank Jago Tbk PT (ARTO IJ), Adaro Minerals (ADMR IJ), Bumi Resources Minerals Tbk (BRMS IJ), Transcoal Pacific Tbk PT (TCPI IJ) and Mitratel (MTEL IJ).
- Potential deletions are Pembangunan Perumahan (Persero) (PTPP IJ), Pabrik Kertas Tjiwi Kimia (TKIM IJ), Media Nusantara Citra (MNCN IJ), Gudang Garam (GGRM IJ) and Chandra Asri Petrochemical (TPIA IJ).
Kito (6409) – Now Sitting Pretty
- Kito Corporation (6409 JP) is under offer by KKR unit Crosby, which announced a takeover in mid-May.
- Anti-Trust and foreign review will take a few months, and so we wait. In the meantime, the shareholder register has changed significantly. This remains an interesting option.
- And now, global market ructions offer arbitrageurs a meaningful opportunity.
Australia: S&P/ASX, FTSE, REMX, GDXJ Flows on Friday
- Changes to the S&P/ASX indices, FTSE All-World/All-Cap, VanEck Vectors Rare Earth/Strategic Metals (REMX US) and VanEck Vectors Junior Gold Miners (GDXJ US) will be implemented at the close tomorrow.
- The stocks with passive inflows have outperformed the stocks with passive outflows over the last couple of months and post-announcement. There will be pre-positions on a lot of names.
- Short interest has increased on nearly all the deletes from the S&P/ASX indices, while short interest movement on the stocks with passive inflows has been mixed.
Before it’s here, it’s on Smartkarma
