This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.
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1. Outsourcing (2427) – Earnings Delay Causes Consternation
- Originally, the MBO for Outsourcing Inc (2427 JP) was expected to get launched end-January 2024. A late-ish filing with regard to the EU’s Foreign Subsidies Regulation regime prompted a delay.
- Yesterday Outsourcing announced a delay its earnings release by 3 business days, the delay “procedures related to impairment losses are continuing.”
- Outsourcing shares are down hard on this. -1.5% as I write. I examine.
2. Screen Holdings (7735 JP): Positioning & Potential Passive Buying
- SCREEN Holdings (7735 JP) could be added to a global index at the end of the month and there will be a lot of buying in the stock.
- There is a fair bit of positioning for the potential passive buying and there will be supply in the stock.
- However, the stock trades cheaper than its peers and a correction could provide an opportunity for long-term investors to enter the stock.
3. JSR (4185) – Updated Information in SUNY Lawsuit, and Other Developments
- 12 days ago, JSR Corp (4185 JP) announced that former research collaboration partner Research Foundation of the State University of New York had sued in an intellectual property ownership dispute.
- I wrote about it here to the extent I could. Since then, more information has become available, or available to me. Some details on the case. Some on lawyers.
- Since then JSR has reported earnings with unchanged forecast, and major pure play comp Tokyo Ohka Kogyo (4186 JP) today reported earnings; the stock popped 10+% to an all-time high.
4. MVIS Australia Equal Weight Index Rebalance Preview: Should I Stay or Should IGO?
- The review period for the March rebalance of the MVIS Australia Equal Weight Index ends on 29 February with results announced on 8 March and implemented on 15 March.
- Lendlease Group (LLC AU), IDP Education (IEL AU) and IGO Ltd (IGO AU) are very close to deletion zone and price moves over the next couple of weeks are important.
- IGO Ltd (IGO AU) is also a deletion from a global index in February and a lower stock price could lead to deletion from this index too.
5. Renesas (6723 JP) To Acquire Altium (ALU AU) In a A$9.1bn Deal
- Renesas Electronics (6723 JP) has entered a Scheme Implementation Agreement to acquire Altium Ltd (ALU AU) at A$68.5/share implying an equity value of A$9.1bn and an Enterprise Value of A$8.8bn.
- The offer price is a 33.6% premium to the last close and a larger premium to VWAPs ranging from 30 days to 180 days.
- There will be ad hoc inclusions to the S&P/ASX 100 Index and the S&P/ASX 200 (AS51 INDEX) on Altium Ltd (ALU AU)‘s last trading day (expected second half of 2024).
6. Renesas’ Transformative Offer For Altium
- Renesas Electronics (6723 JP), a supplier of advanced semiconductors, is offering Altium Ltd (ALU AU) shareholders A$68.50/share, in cash, a lifetime high, by way of a Scheme.
- Back in June 2021, Altium rejected a A$38.50/share NBIO, then a A$40/share verbal Offer, from US engineering software giant Autodesk. This was discussed in Altium Ltd (ALU) Rebuffs Autodesk Offer
- This is compelling Offer for Altium. For Renesas, this transaction is a paradigm shift away from its core semiconductors manufacturing ops.
7. S&P/ASX Index Rebalance Preview: Newmont Still Has Nearly A$1bn to Sell
- With two days left in the review period, there could be 28 adds/deletes across the S&P/ASX family of indices in March.
- There is nearly A$1bn to sell in Newmont (NEM AU) due to the potential S&P/ASX 20 Index deletion and a large decrease in the number of shares held in Australia.
- There could be 2-41 days of ADV to buy in the index inclusions while the impact on the deletions will range between 0.7-24 days of ADV.
8. Outsourcing (2427) MBO Situation – Checking, and Thinking, and Noodling, and Speculating
- I got a bunch of questions about my Outsourcing comments yesterday in Outsourcing (2427) – Earnings Delay Causes Consternation.
- This piece is intended to clarify what I know (still limited), put parameters around what it might be, and draw lines in the sand which I might later erase.
- This may be nothing. But it may not be. I will try to answer the questions I received in a kind of Q&A format, and I hope that helps.
9. MVIS Australia A-REITs Index Rebalance Preview: ASK Looks Like a Delete
- The review period for the March rebalance ends in a couple of weeks. There could be one deletion from the index and a bunch of capping changes.
- The index changes will lead to a one-way turnover of 2.2% resulting in a one-way trade of A$13m. There are two stocks with over A$3m to trade.
- With market participants expecting lower interest rates, there has been short covering on a lot of the REITs in the last few months.
10. SET50 Index Rebalance Preview: Three Potential Changes in June
- Early days, but there could be three changes for the Stock Exchange of Thailand SET 50 Index at the June rebalance. Two names are reversals of the December changes.
- Passive trackers will need to buy between 1.5-3.6 days of ADV on the inclusions and sell 1.1-1.4 days of ADV on the deletions.
- There are a couple of stocks that are close to passing/failing the liquidity tests and a couple close to cutoff ranks. That could result in further changes to the index.
