In today’s briefing:
- India – Free Float Changes to Drive Passive Inflows
- IndusInd Bank (IIB IN): Passive Buying Coming Up as Foreign Room Crosses Key Threshold
- Liontown Resources Placement – While Discount Is Wide, It Is at a Premium to Its Pre-Takeover Price
- Kenedix J-REIT Family Merger – Still Room (But Less Time) To Move (Redux-Ish)
- Another Hidden Passive Flow Trading Opportunity Is Captured in Korea: SOL Semicon ETF December Rebal
- Sponsor of Sankei Real Estate (2972) To Buy More Units in Revival Plan
- Golden Eagle Energy: Share Sale Done. MTO Price Bumped
- ZJLD Lock-Up – KKR’s US$680m Stake to Be Unlocked, Although the PE Could Opt to Wait
- Liontown Resources (LTR AU): State of Play
- Ohayo Japan | Rate Fears; Phase-Out of F-Gases for Heat Pumps Negative for Daikin
India – Free Float Changes to Drive Passive Inflows
- Over the last few weeks, companies in India have been disclosing their shareholding pattern as of end-September. There are a few companies with significant float changes from end-March and/or end-June.
- The changes in free float could be reflected in domestic and global indices over the next couple of months resulting in action from passive trackers.
- We find 9 stocks where there could be inflows with passive trackers needing to buy over 1 day of ADV on most stocks.
IndusInd Bank (IIB IN): Passive Buying Coming Up as Foreign Room Crosses Key Threshold
- Foreign investors sold ~5.7m shares of Indusind Bank (IIB IN) from July to September. That selling has pushed foreign room above the key 15% threshold.
- With foreign room crossing 15%, passive trackers will need to buy a chunk of Indusind Bank (IIB IN) stock at the end of November.
- There will be positioning on Indusind Bank (IIB IN) though it appears some of that was taken off in the last couple of days.
Liontown Resources Placement – While Discount Is Wide, It Is at a Premium to Its Pre-Takeover Price
- Liontown Resources (LTR AU) is looking to raise A$365m (US$230m) for capital expenditure and to plug its funding gap for the Kathleen Valley Lithium (KVL) project.
- Together, the combined A$1.14bn equity/debt raising comes after Albemarle abandoned its A$6.6bn (US$4.2bn) acquisition bid for Liontown Resources earlier in the week.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
Kenedix J-REIT Family Merger – Still Room (But Less Time) To Move (Redux-Ish)
- A month ago I wrote there was still time, and room, to move on the Kenedix Merger.
- Now there’s less time, but the situation and relationships are better understood.
- Tracking Excess Volume during the period since the announcement is interesting. And it may tell you less than you think.
Another Hidden Passive Flow Trading Opportunity Is Captured in Korea: SOL Semicon ETF December Rebal
- For the impending December rebalancing, the effective date is set for December 18th, while the ETF rebalancing trading will take place on December 15th.
- Jusung Engineering and Eugene Technology are likely to be added, while Lake Materials and SFA Semicon are expected to exit the index.
- Aside from constituent changes, Hansol Chemical is anticipated to significantly benefit from the passive impact as the primary beneficiary of the ceiling reversion.
Sponsor of Sankei Real Estate (2972) To Buy More Units in Revival Plan
- On 16 October, the Asset Management Co of Sankei Real Estate (2972 JP) announced earnings, the execution of a Revival Plan, and said the sponsor, Sankei Building would buy more.
- They’ll buy for up to 220 days starting sometime before Feb-end. Presumably after the Revival Plan transactions have been executed.
- The REIT is cheap to peers. It is small to peers. It needs some reviving. But when a sponsor promises to buy, it pays to take a look.
Golden Eagle Energy: Share Sale Done. MTO Price Bumped
- This transaction just keeps on giving. First, you received an additional dividend. Now the Offer price has been increased.
- On the 26 July, Geo Energy Resources (GERL SP) announced an intention to acquire a 58.65% stake in coal miner Golden Eagle Energy (SMMT IJ) (GEE).
- Geo shareholders approved the purchase on the October 13 and the acquisition was completed on the 18 October. This triggered an MTO, which has been revised upward to IDR 1,305.50.
ZJLD Lock-Up – KKR’s US$680m Stake to Be Unlocked, Although the PE Could Opt to Wait
- ZJLD Group (6979 HK) raised US$676m in its Hong Kong IPO in April 2023. Its six-month lockup will expire on 26th Oct 2023.
- ZJLD is a Chinese liquor company producing baijiu. As per F&S, the firm ranked third among all baijiu companies with three or more aroma types in terms of FY21 sales.
- In this note, we will talk about the lock-up dynamics and updates since our last note.
Liontown Resources (LTR AU): State of Play
- Liontown Resources (LTR AU) resumes trading today after announcing a raise of up to A$1.18bn to fully fund the Kathleen Valley Lithium Project to first production and beyond.
- The equity component is up to A$421m and the placement price of A$1.8/share is a 35.5% discount to the last close.
- The placement price is higher than the stock price prior to the Albemarle Corp (ALB US) offer and during a period when its peers have performed poorly.
Ohayo Japan | Rate Fears; Phase-Out of F-Gases for Heat Pumps Negative for Daikin
- Overseas: SPX -0.8% , Nasdaq -0.8%; Fed Chair still concerned about inflation; jobs data shows ongoing econ strength; Tesla -9%
- Today: NKY Futs -0.5% v cash. JPY 149.8/$; Calbee to test biogas production; Disco expects weakness in demand to continue; Softbank to build data center in Hokkaido
- JapanX: The accelerated phase-out of F-gases, though aiming to make heat pumps cleaner, may hinder the shift from fossil fuels. Daikin and the industry face challenges and need swift adaptation.
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