In today’s briefing:
- HSCEI Index Rebalance Preview: One Change or Two in June?
- ChiNext/ChiNext50 Index Rebalance Preview: Plenty of Overlap Between the Indices
- TSMC. How To Turn Chicken Salad Into Chicken Sh*t
- Azure Min’s (AZS AU)’s “Boost” As Gina Ups Stake in Lynas
- TDCX (TDCX US)’s $7.20/Share Short-Form Merger
- Quiddity Leaderboard S&P 500 June 2024 – Minimal Changes Expected but Intrareview Changes Possible
- Quiddity Leaderboard KOSPI 200 Jun 24: Four Changes Likely
- (Mostly) Asia-Pac M&A: Lynas, Tietto Minerals, JSR, Shinko Electric, TDCX
- Japan Weekly | Nikkei Takes a Dive
- Weekly Deals Digest (21 Apr) – Hollysys, Shinko, Inageya, Hang Lung, Kokusai, HD Hyundai Marine
HSCEI Index Rebalance Preview: One Change or Two in June?
- SenseTime Group (20 HK) is a potential deletion in June while Zijin Mining Group Co Ltd H (2899 HK) is a potential inclusion.
- For yet another review, BeiGene (6160 HK) is a close add with the Velocity Test determining if the stock will be added to the index or not.
- Estimated one-way turnover at the rebalance is 2.95% resulting in a one-way trade of HK$1.6bn. Official capping will be based off the close of trading on 4 June.
ChiNext/ChiNext50 Index Rebalance Preview: Plenty of Overlap Between the Indices
- Nearing the end of the review period, we forecast 8 changes for the ChiNext Index (SZ399006 INDEX) and 5 changes for the ChiNext 50 Index in June.
- There are overlapping names for the two indices and some of the stocks will also have flows from the CSI Smallcap 500 Index – Shang (SH000905 INDEX) trackers.
- The potential adds have outperformed the potential deletes between 9-10% for both indices over the last month with the deletes dropping a lot more than the adds.
TSMC. How To Turn Chicken Salad Into Chicken Sh*t
- Q124 revenues of $18.87 billion, marginally above the high end of the guided range, up 12.9% YoY and down 3.8% QoQ. Guided Q224 +6% QoQ. Maintained full year 2024 outlook
- Unnecessary, minor downward revisions for semi & foundry growth, combined with confusion about the reason triggered an allergic reaction on the markets. TSMC down ~8% since.
- SMCI plunged 23% by Friday close, ARM down 16.9%, NVIDIA down 10%, AMD & Micron down ~5% etc. Nice one, TSMC!
Azure Min’s (AZS AU)’s “Boost” As Gina Ups Stake in Lynas
- On the 8th April, Azure Minerals (AZS AU) shareholders overwhelmingly approved the Sociedad Quimica y Minera (SQM US)/Gina Rhinehart’s Hancock transaction. Shares promptly closed down 7% on regulatory approval fears.
- Those fears are unwarranted. China’s Tianqi Lithium would indirectly own just ~11% in Azure post-deal. China has recently lifted anti-dumping tariffs on a range of Aussie products. FIRB won’t block.
- An expected approval may have spurred Gina to buy more shares in Lynas (LYC AU). Why buy now if FIRB dings Azure; that outcome would push the whole sector lower.
TDCX (TDCX US)’s $7.20/Share Short-Form Merger
- On the 2 January, TDCX (TDCX US), a Singapore-headquartered digital customer experience (CX) provider, announced it had received a preliminary non-binding proposal from Laurent Junique to be acquired at $6.60/ADS.
- On the 1st March, TDCX entered in a definitive agreement by way of a short form merger at US$7.20/ADS, a 48% premium to undisturbed.
- As Laurent Junique holds 98.4% of the voting power, there is no shareholder vote on the merger. This is done. The Offer should close in the 2Q24.
Quiddity Leaderboard S&P 500 June 2024 – Minimal Changes Expected but Intrareview Changes Possible
- The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
- The index is reviewed quarterly. The next review will be in June 2024 and the evaluation date for the rankings for the constituent selection process is 6th June 2024.
- In this insight, we take a look at the Potential ADDs and Potential DELs for the June 2024 index rebal event and the intra-review ADDs/DELs.
Quiddity Leaderboard KOSPI 200 Jun 24: Four Changes Likely
- KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
- In this insight, we take a look at the names leading the race to become ADDs and DELs during the upcoming semiannual review in June 2024.
- We expect up to four changes in the KOSPI 200 index during the June 2024 index rebal event (down from 5 expected last month) based on the latest available data.
(Mostly) Asia-Pac M&A: Lynas, Tietto Minerals, JSR, Shinko Electric, TDCX
- Tally 50 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- No new deals were discussed on Smartkarma this week; although a Lynas Corp Ltd (LYC AU) / MP Materials Corp (MP US)tie-in (again) rumoured.
- Key updates took place on: Azure Minerals (AZS AU), Tietto Minerals (TIE AU), JSR Corp (4185 JP), Shinko Electric (6967 JP), TDCX (TDCX US), and Hollysys Automation Technologies (HOLI US).
Japan Weekly | Nikkei Takes a Dive
- Geopolitical concerns and disappointing ASML earnings were the key triggers for sharp pull back in equities this week
- Next week in Japan, all eyes will be on the Bank of Japan and the continued weakness in the exchange rate. Earnings season just around the corner too
- Semiconductor names were hit hard this week – Lasertec (-21%), Tokyo Electron (-15%) and Disco (-11%) sharply lower.
Weekly Deals Digest (21 Apr) – Hollysys, Shinko, Inageya, Hang Lung, Kokusai, HD Hyundai Marine
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: Kokusai Electric (6525 JP) and J&T Global Express (1519 HK) lock-ups. HD Hyundai Marine Solution (443060 KS), ZEEKR (ZK US) and Sichuan Baicha Baidao Industrial (2555 HK) IPOs.
- Event-Driven developments: Hollysys Automation Technologies (HOLI US), Shinko Electric Industries (6967 JP), Inageya Co Ltd (8182 JP), Hang Lung Properties (101 HK), Tietto Minerals Ltd (TIE AU).
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