In today’s briefing:
- The Bigly March 2024 “Wednesday-Friday Trade” (Surprising Flows)
- CSI300 Index Rebalance Preview: Potential Adds Outperforming Despite ETF Inflows
- Korea NPS Abruptly Joins Corporate Value Up Program: According to Document Obtained from NPS
- Samsonite (1910 HK): Leader Of The Pack
- Sector ETF Rebalancing with Remarkable Price Impact History: ISC In, Wonik IPS Out
- Chilled & Frozen Logistics (9099) – Hostile Takeover Launched by AZ-Com Maruwa (9090)
- Chilled & Frozen Logistics (9099 JP): AZ-COM Maruwa (9090 JP)’s Hostile Offer
- Quiddity Leaderboard ASX Jun 24: Can Codan Become an Intra-Review ASX 200 ADD?
- Link Admin (LNK AU): 24th April Shareholder Vote
- GoTo Gojek Tokopedia (GOTO IJ) – Warming Up the New Engines of Growth
The Bigly March 2024 “Wednesday-Friday Trade” (Surprising Flows)
- Every year it’s the same trade. This year it is Wednesday and Thursday. There are risks to the analysis – notably allocation.
- But there may be ¥1.0-1.2trln+ to buy on one day into the close later this month, then ad hoc buys of ¥630bn and index sells of ~¥600bn 2 days later.
- Over the past ten years, the two day return on the March trade is great. This year the Nikkei funding trade makes things more complicated.
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.
Korea NPS Abruptly Joins Corporate Value Up Program: According to Document Obtained from NPS
- NPS abruptly joins ‘Corporate Value Up Program’, plans to select three asset managers. Deadline: this month’s 29th; results: March 19th, possibly linked to Korea Premium Index ETF launch in mid-May.
- The document outlines guidelines, allocating 90-100% to value stocks, with KOSDAQ under 20%. While benchmarked to the internally-built index, it will likely focus on Korea Premium Index and KOSDAQ Global.
- The fund size is crucial. NPS will disclose details later. But still, there is considerable room to this year’s ceiling for local equity; a significant amount could flow into this.
Samsonite (1910 HK): Leader Of The Pack
- Luggage maker Samsonite (1910 HK) is up 11.8% today, as I type, after Bloomberg reported it is working with advisers as it studies possibilities, including going private.
- With the reopening of China and the ongoing recovery in travel globally, Samsonite’s net sales improved markedly across all regions. 1H23 profit gained 185.3% versus 1H22.
- FY23 figures should be out in the middle of next month.
Sector ETF Rebalancing with Remarkable Price Impact History: ISC In, Wonik IPS Out
- Will there be changes in April’s rebalancing? With two weeks left, two names are likely. Wonik IPS may be replaced by ISC Co Ltd, given a ₩150B market cap difference.
- In the previous rebalancing, constituent changes had a notable price impact. Despite a passive flow impact of +1.0x ADTV, HPSP and EO Technics saw about a 15% 3-day return.
- Wonik IPS is estimated to receive -4.0x ADTV, while ISC is expected to receive +1.0x ADTV. This is also quite similar to the previous rebalancing.
Chilled & Frozen Logistics (9099) – Hostile Takeover Launched by AZ-Com Maruwa (9090)
- Chilled & Frozen Logistics Holdings (9099 JP) last week announced its “Action to Implement Management That is Conscious of Cost of Capital and Stock Price”.
- Today it announced AZ-Com Maruwa Holdings (9090 JP) had announced its intention to launch a Tender Offer on C&F Logistics without having contacted C&F first. A HOSTILE deal. Yum.
- The deal is proposed at a 50% premium, with the goal of getting to a minimum of 50.00%. This will be interesting.
Chilled & Frozen Logistics (9099 JP): AZ-COM Maruwa (9090 JP)’s Hostile Offer
- AZ-Com Maruwa Holdings (9090 JP) has launched a pre-conditional hostile offer for Chilled & Frozen Logistics Holdings (9099 JP) at JPY3,000 per share, a 47.0% premium to the last close.
- The pre-conditions primarily relate to regulatory approvals. The tender is expected to start in early May. The Board responded that it will evaluate the offer.
- The hostile offer was a reaction to the Board’s lack of engagement. The Board will struggle to reject an attractive offer, which is 37.5% higher than the all-time high.
Quiddity Leaderboard ASX Jun 24: Can Codan Become an Intra-Review ASX 200 ADD?
- In this insight, we take a look at the potential index changes for ASX 200, 100, 50, and 20 in the run-up to the June 2024 index rebal event.
- Prior to the June 2024 review, there could be one intra-review change triggered by the completion of the Silver Lake Resources (SLR AU) / Red 5 Ltd (RED AU) deal.
- Separately, I see one ASX 20 change and two ASX 100 changes for the regular rebalance in June 2024.
Link Admin (LNK AU): 24th April Shareholder Vote
- Back on the 18 December 2023, superannuation service provider Link Administration (LNK AU) entered into a Scheme with Mitsubishi UFJ Financial Group.
- MUFJ offered Link shareholders A$2.10/share (in cash) plus a A$0.16/share dividend (25% franked), or a 32.9% premium, all-in.
- The Scheme Meeting will now take place on the 24th April, with expected implementation on the 16 May. This looks done – and trading accordingly.
GoTo Gojek Tokopedia (GOTO IJ) – Warming Up the New Engines of Growth
- GoTo Gojek Tokopedia (GOTO IJ) 4Q2023 results revealed another sequential increase in GTV and positive adjusted EBITDA for both ODS and e-commerce, despite reduced incentive and marketing spending.
- GoTo achieved positive top-line growth by expanding its total addressable market through more affordable products and a strong performance from consumer lending in fintech, coupled with great cash cost efficiencies.
- 2024 will be a transformational year for GoTo without the yoke of Tokopedia promotional spending but with significant cash coming in every quarter that can be used to drive growth.
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