In today’s briefing:
- Allkem+Livent=Arcadium : Expected Index Flows
- HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March
- Allkem + Livent = Arcadium : Updated Expected Index Flows
- BYD (1211 HK): Sales Volume Up by 62% in 2023
- NIFTY50 Index Rebalance Preview: One Change, Maybe Two, Low Probability of Three
- Celltrion Pharm (068760 KS) Looks Frothy
- End of Mandatory Lock-Up Periods for 41 Companies in Korea in January 2024
- Korean Holdcos Vs Opcos Gap Trading Opportunities in 1Q 2024
- KRX New Deal Index Rebalance Preview: Changes with Flow & Impact
- Ohayo Japan | Stocks Tumble; Japan Resilient in Face of Tragedy
Allkem+Livent=Arcadium : Expected Index Flows
- Yesterday during the day, Allkem Ltd (AKE AU) shareholders approved the Scheme and Livent (LTHM US) shareholders approved the merger. The deal is done. Allkem last trades 21 Dec.
- NEWCO starts trading 4 January in the US but the Arcadium Lithium CDIs start trading 22 Dec in Australia. S&P/ASX announced they will replace Allkem in the ASX200.
- But I have been asked for a breakdown of flows and timing again, so I have put it into a handy table which I hope makes it less confusing.
HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March
- We see 30 potential adds (including plenty of new listings) and 28 potential deletes (on market cap and liquidity) for the Hang Seng Composite Index in March.
- We expect 26 stocks to be added to Southbound Stock Connect following the rebalance while 25 stocks could be deleted from the trading link and become Sell-only.
- There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.
Allkem + Livent = Arcadium : Updated Expected Index Flows
- Allkem Ltd (AKE AU) saw its last day of trading on 21 December. There was large volume at the close as one major index provider gave it the boot.
- Another delayed their treatment at the last minute, and eliminated a cross-flow.
- But there is still a lot of net buy flow tomorrow (3 Jan) and the next day in the US. Perhaps more than I expected.
BYD (1211 HK): Sales Volume Up by 62% in 2023
- BYD’s sales volume grew by 45% YoY in December, higher than 31% YoY in November.
- For the whole year 2023, BYD’s total sales volume rose by 62%.
- We conclude the stock has an upside of 74% for 2024.
NIFTY50 Index Rebalance Preview: One Change, Maybe Two, Low Probability of Three
- Shriram Finance (SHFL IN) is a high probability add and UPL Ltd (UPLL IN) is a high probability delete at the NIFTY Index (NIFTY INDEX) rebalance in March.
- There is a lower probability of Bharat Electronics (BHE IN) or Trent Ltd (TRENT IN) replacing Bharat Petroleum Corp (BPCL IN) at the rebalance.
- Jio Financial Services (JIOFIN IN), Avenue Supermarts Ltd (DMART IN) and Zomato (ZOMATO IN) will enter the running once added to the F&O segment of the market.
Celltrion Pharm (068760 KS) Looks Frothy
- After biopharmaceuticals developer and producer Celltrion Inc (068270 KS) recently completed its merger with Celltrion Healthcare (091990 KS), Celltrion Pharm (068760 KS) came (more) into focus.
- Pharma is now up ~37% since Inc and Healthcare merged.
- That’s quite a lot of expectation baked in. Probably too much.
End of Mandatory Lock-Up Periods for 41 Companies in Korea in January 2024
- We discuss the end of the mandatory lock-up periods for 41 stocks in Korea in January 2024, among which 4 are in KOSPI and 37 are in KOSDAQ.
- These 41 stocks on average could be subject to further selling pressures in January and could underperform relative to the market.
- Among these 41 stocks, top five market cap stocks include Posco International, Doosan Robotics, Rainbow Robotics, Qualitas Semiconductor, and PhilEnergy.
Korean Holdcos Vs Opcos Gap Trading Opportunities in 1Q 2024
- In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 1Q 2024.
- We highlight 38 pair trades that involve Korean holdcos and opcos.
- Of the 38 pair trades, 26 of them involved holdcos outperforming opcos in the past six months and 12 of them involved opcos outperforming holdcos in the same period.
KRX New Deal Index Rebalance Preview: Changes with Flow & Impact
- The review period for the March rebalance ends on 31 January, the changes will be announced early March and implemented at the close of trading on 14 March.
- There is one change currently for each of the Secondary Battery, Bio, Internet and Game indices. There are two changes for the BBIG Index.
- There will be big flow on Ecopro BM (247540 KS) and Posco Future M (003670 KS) and big impact on Douzone Bizon (012510 KS) and DearU (376300 KS).
Ohayo Japan | Stocks Tumble; Japan Resilient in Face of Tragedy
- Overseas: SPX -0.8%, Nasdaq -1.2% extending losses for second day; Apple downgraded. 10Y yields above 4%.
- Today: NKY Futs -1.2% v cash. JPY143; Expect weak start to year’s trading. Oil prices up +3%
- Japan: Earthquake aftermath disrupts retail, services, and transport; 55 confirmed dead, with widespread destruction. Despite short-term challenges, Japanese equity markets historically resilient to earthquake impacts.
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