In today’s briefing:
- Investigating Potential Block Deals Involving Korea’s Financial Holding Companies
- Alumina (AWC AU): Further Thoughts on Alcoa’s Proposal
- NIFTY100 Low Volatility 30 Index Rebalance Preview: Titan Could Replace IOCL
- Sep24 Nikkei 225 Rebal – 2 ADDs, 2 DELETEs Maybe, but Rebals Tougher, and Fastie+TEL Are the FUN
- StubWorld: Troubling Signs For NWD (17 HK)
- MVIS Australia Equal Weight Index Rebalance Preview: Three Close Deletions
- ARM Holdings IPO Lock-Up Expiry – A US$127bn Lockup Release Might Be Too Tempting to Pass On
- Interpreting Kumho Petro Chemical’s Unexpected Move to Cancel Treasury Shares
- CSI300 Index Rebalance Preview: Potential Adds Outperforming Despite ETF Inflows
- Shinhan Financial Group Placement – Recent Selldowns Have Held up Since, Momentum Is Strong as Well
Investigating Potential Block Deals Involving Korea’s Financial Holding Companies
- Stake sales by Affinity and Bearing PE are attractive due to the absence of special partnerships with Shinhan Financial Group, indicating favorable exit potential at current stock prices.
- KB Financial draws attention due to Carlyle’s ₩240B EB investment in 2020. Carlyle can now convert to shares at ₩48,000/share, yielding 37.08%.
- Woori Financial is intriguing. IMM PE and Eugene PE hold stakes, investing ₩450B and ₩386B respectively. Their yields are 32.55% and 10.45% respectively. No constraints on divestment.
Alumina (AWC AU): Further Thoughts on Alcoa’s Proposal
- I have received several questions from readers on Alcoa (AA US)’s non-binding proposal for Alumina Ltd (AWC AU) in the context of the current gross spread of 9.2%.
- The questions primarily concerned Citic Resources Holdings (1205 HK) voting intentions, the probability of a bump and the likelihood of Aloca shareholders supporting the transaction.
- CITIC Resources’ lack of public endorsement of the transaction is due to HKEx listing requirements and not an indication of a NO vote risk.
NIFTY100 Low Volatility 30 Index Rebalance Preview: Titan Could Replace IOCL
- With the review period complete, Titan Co Ltd (TTAN IN) should replace Indian Oil Corp (IOCL IN) in the Nifty100 Low Volatility 30 Index at the close on 27 March.
- Constituent changes, volatility changes and capping changes will result in one-way turnover of 13.2% resulting in a one-way trade of INR 4.2bn.
- The flows on the stocks are not very large but there will be same side and offsetting flows from other index trackers at the same time.
Sep24 Nikkei 225 Rebal – 2 ADDs, 2 DELETEs Maybe, but Rebals Tougher, and Fastie+TEL Are the FUN
- Now that the March 2024 Nikkei 225 Rebalance is decided, we have a model for the Sep 2024 Review. As previously discussed on Smartkarma, actual name changes get tough now.
- As of now, there should be two ADDs and two DELETEs. They might not occur. But there are two other situations which create interesting dynamics around big names.
- The dynamics of Fast Retailing and Tokyo Electron promise more fun than the actual name changes in September 2024. It impacts how you trade Nikkei vs TOPIX and tech internals.
StubWorld: Troubling Signs For NWD (17 HK)
- Despite the lifting of the “spicy” property cooling measures last week, New World Development (17 HK) has plumbed fresh P/B lows after a (very) brief respite.
- Preceding my comments on NWD 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%.
MVIS Australia Equal Weight Index Rebalance Preview: Three Close Deletions
- With the review period complete, there are 3 stocks that are close to the deletion zone and could be removed from the index at the March rebalance.
- Even if there are no constituent changes, capping changes will lead to one-way turnover of 4.4% and a one-way trade of A$97m.
- There are 9 stocks with over A$5m to trade from passive trackers but the impact on the stocks is not very high.
ARM Holdings IPO Lock-Up Expiry – A US$127bn Lockup Release Might Be Too Tempting to Pass On
- Softbank raised around US$4.9bn via selling some of its stake in ARM Holdings (ARM US)’ US IPO. Its remaining 90% stake will be released from its IPO linked lockup soon.
- ARM develops and licenses high-performance, low-cost, and energy-efficient CPU products and related technology, which is used by semiconductor companies and OEMs to develop their own products.
- In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.
Interpreting Kumho Petro Chemical’s Unexpected Move to Cancel Treasury Shares
- Kumho Petro Chemical (011780 KS) intends to retire 50% of its common shares, totaling 2,624,417 shares, starting from the 2024 fiscal year until the 2026 fiscal year.
- With the annual general meeting nearing, NPS hasn’t revealed its support, causing unease for Park Chan-gu. Considering NPS’s obligation to the Value-Up policy, cancellation seems inevitable for Park Chan-gu.
- Whether the battle persists hinges on NPS’s stance. If NPS backs Park Chan-gu, their stake surpassing 25% could deter the opposition’s financial strength. Conversely, NPS’s neutrality could escalate the battle.
CSI300 Index Rebalance Preview: Potential Adds Outperforming Despite ETF Inflows
- With 85% of the review period complete, we see 11 changes for the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) in June.
- We estimate one-way turnover of 1.2% at the rebalance leading to a one-way trade of CNY 7.3bn (US$1bn). There are a lot of stocks with multiple days ADV to trade.
- The potential adds have outperformed the potential deletes despite large flows from the National Team into ETFs tracking the CSI 300 Index. That support for the potential deletes will reverse.
Shinhan Financial Group Placement – Recent Selldowns Have Held up Since, Momentum Is Strong as Well
- EQT (EQT SS) , via Supreme, is looking to raise US$311m from selling its stake in Shinhan Financial (055550 KS).
- Momentum on the stock has been strong over the past few months, and the recent selldowns in the stock have held up by the end of the week.
- The share sale here will be a cleanup one, and a small one to digest at just 5.3 days of ADV.
💡 Before it’s here, it’s on Smartkarma
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