Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

In an earlier insight I said that the Rights Offering of <a href="https://www.smartkarma.com/entities/sembcorp-marine-ltd" target="_blank" data-smartkarma-citation="entities:11:1" rel="noopener">Sembcorp Marine (SMM SP)</a> looked like a kind of an IPO as people were being asked to put in money to create a new company with new owners.I think that was probably a misnomer. It had the possibility of being a Virtual IPO due to the fact that existing SMM public shareholders could put in money of their own volition, and buy shares at what was a steep discount on a TERP basis to where they were trading before. The issue was that some people were going to get shares without putting up new money. They were just going to receive them. For that, it is a bit like a Scheme of Introduction. And that is the way it has turned out. Today quite late, <a href="https://www.smartkarma.com/entities/sembcorp-marine-ltd" target="_blank" data-smartkarma-citation="entities:11:1" rel="noopener">Sembcorp Marine (SMM SP)</a> reported the <a href="https://links.sgx.com/FileOpen/Announcement%20Rights%20Issue%20Results.ashx?App=Announcement&amp;FileID=630853" target="_blank" rel="noopener">Results of the Rights Issue</a>. <a href="https://www.smartkarma.com/entities/sembcorp-industries-ltd" target="_blank" data-smartkarma-citation="entities:1087:1" rel="noopener">Sembcorp Industries (SCI SP)</a> shareholders are going to get a lot of it. Today Sembcorp Industries <a href="https://links.sgx.com/FileOpen/Proposed%20Distribution-Confirmation%20of%20Record%20Date%20and%20Distribution%20Ratio.ashx?App=Announcement&amp;FileID=630876" target="_blank" rel="noopener">confirmed</a> the distribution to be 4.911 shares per 1 share of Sembcorp Industries held (subject to minor rounding differentials). Investors now have one more day to buy SCI with SMM distribution attached. On Wednesday, SCI shares go ex- the distribution. On Friday, the SMM Rights Shares trade. My opinion on this situation has been clear. Lots of links below.Now we wait. But as always, more below the fold.<hr><table class="table table-striped"><tbody>
<tr><td colspan="3" style="width: 723.636px;"><h3>Recent Insights on the SCI/SMM Recap-Demerger Situation</h3></td></tr>
<tr>
<td style="width: 77.2727px;">Date</td>
<td style="width: 127.273px;">Company</td>
<td style="width: 477.273px;">Insight Title</td>
</tr>
<tr>
<td style="width: 77.2727px;">9 June 2020</td>
<td style="width: 127.273px;">Sembcorp Inds</td>
<td style="width: 477.273px;">
<a href="https://www.smartkarma.com/insights/sembcorp-marine-and-sci-a-gloriously-messy-recap-and-de-merger-big-win-for-sci" target="_blank" data-smartkarma-citation="insights:40153" rel="noopener">SembCorp Marine and SCI - A Gloriously Messy Recap and De-Merger - Big Win for SCI</a> </td>
</tr>
<tr>
<td style="width: 77.2727px;">9 Jun 2020</td>
<td style="width: 127.273px;">sembcorp marine</td>
<td style="width: 477.273px;">
<a href="https://www.smartkarma.com/insights/sembcorp-marine-rights-offer-cast-away" target="_blank" data-smartkarma-citation="insights:40164" rel="noopener">Sembcorp Marine Rights Offer - Cast Away</a> </td>
</tr>
<tr>
<td style="width: 77.2727px;">30 Jun 2020</td>
<td style="width: 127.273px;">Sembcorp Inds</td>
<td style="width: 477.273px;">
<a href="https://www.smartkarma.com/insights/thinking-about-sembcorp-industries-future-be-bigly-bullish" target="_blank" data-smartkarma-citation="insights:40809" rel="noopener">Thinking About Sembcorp Industries' Future - Be Bigly Bullish</a> </td>
</tr>
<tr>
<td style="width: 77.2727px;">24 Jul 2020</td>
<td style="width: 127.273px;">Sembcorp Inds</td>
<td style="width: 477.273px;">
<a href="https://www.smartkarma.com/insights/sembcorp-restructuring-details-timing-announced-the-arithmetic-is-compelling" target="_blank" data-smartkarma-citation="insights:41504" rel="noopener">Sembcorp Restructuring Details &amp; Timing Announced - The Arithmetic Is Compelling</a> </td>
</tr>
<tr>
<td style="width: 77.2727px;">11 Aug 2020</td>
<td style="width: 127.273px;">sembcorp marine</td>
<td style="width: 477.273px;"><a href="https://www.smartkarma.com/insights/sembcorp-marine-rights-decided-and-virtual-ipo-set-still-avoid" target="_blank" rel="noopener">Sembcorp Marine Rights Decided And “Virtual IPO” Set (Still Avoid)</a></td>
</tr>
<tr>
<td style="width: 77.2727px;">3 Sep 2020</td>
<td style="width: 127.273px;">Sembcorp Inds</td>
<td style="width: 477.273px;"><a href="https://www.smartkarma.com/insights/sembcorp-last-chance-before" target="_blank" data-smartkarma-citation="insights:42886" rel="noopener">Sembcorp - Last Chance Before...</a> </td>
</tr>
</tbody></table>

In an earlier insight I said that the Rights Offering of Sembcorp Marine (SMM SP) looked like a kind of an IPO as people were being asked to put in money to create a new company with new owners.I think that was probably a misnomer. It had the possibility of being a Virtual IPO due to the fact that existing SMM public shareholders could put in money of their own volition, and buy shares at what was a steep discount on a TERP basis to where they were trading before. The issue was that some people were going to get shares without putting up new money. They were just going to receive them. For that, it is a bit like a Scheme of Introduction. And that is the way it has turned out. Today quite late, Sembcorp Marine (SMM SP) reported the Results of the Rights Issue. Sembcorp Industries (SCI SP) shareholders are going to get a lot of it. Today Sembcorp Industries confirmed the distribution to be 4.911 shares per 1 share of Sembcorp Industries held (subject to minor rounding differentials). Investors now have one more day to buy SCI with SMM distribution attached. On Wednesday, SCI shares go ex- the distribution. On Friday, the SMM Rights Shares trade. My opinion on this situation has been clear. Lots of links below.Now we wait. But as always, more below the fold.
Recent Insights on the SCI/SMM Recap-Demerger Situation

Date
Company
Insight Title


9 June 2020
Sembcorp Inds

SembCorp Marine and SCI - A Gloriously Messy Recap and De-Merger - Big Win for SCI 


9 Jun 2020
sembcorp marine

Sembcorp Marine Rights Offer - Cast Away 


30 Jun 2020
Sembcorp Inds

Thinking About Sembcorp Industries' Future - Be Bigly Bullish 


24 Jul 2020
Sembcorp Inds

Sembcorp Restructuring Details &amp; Timing Announced - The Arithmetic Is Compelling 


11 Aug 2020
sembcorp marine
Sembcorp Marine Rights Decided And “Virtual IPO” Set (Still Avoid)


3 Sep 2020
Sembcorp Inds
Sembcorp - Last Chance Before... 



Sembcorp Marine Rights Issue Results : Looks Like a Scheme of Introduction

2 September 2020 was the last day for investors in <a href="https://www.smartkarma.com/entities/sembcorp-marine-ltd" target="_blank" data-smartkarma-citation="entities:11:1" rel="noopener">Sembcorp Marine (SMM SP)</a> ("SMM") to exercise and pay for their rights to purchase 5 new shares for every 1 held at S$0.20/share in what is The Grand Affair of the...
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/156/636/original/Screenshot%202020-09-02%20at%207.09.36%20PM.png?1599045003" class="editor-image img-responsive" data-smartkarma-image-id="156636"></figure>

<div class="content-highlight">
First, sembcorp marine does a 5:1 rights offering. Parent company <a href="https://www.smartkarma.com/entities/sembcorp-industries-ltd" target="_blank" data-smartkarma-citation="entities:1087:1" rel="noopener">Sembcorp Industries (SCI SP)</a> takes up all its rights, backstops more of them, then Temasek backstops the rest of the Rights Offering. Once complete, one-time parent SCI distributes ALL of its sembcorp marine shares resulting from the Rights Offering to its own shareholders. This amounts to ~4.279 to ~4.911 sembcorp marine shares per SCI share - variable because one does not know how much of the backstop will be used.
Because of the nature of this transaction, I have argued this is something akin to a re-IPO of sembcorp marine. 
</div>
Next stop, information about the disposition of the "excess" rights application, if any, and on 9 September SCI will trade without rights to receive shares in sembcorp marine. The price of SCI shares will be revised sharply downward on the morning of the 9th to account for the value of the SMM shares, which then trade separately starting the <a href="https://links.sgx.com/FileOpen/OIS.ashx?App=Announcement&amp;FileID=627790" target="_blank" rel="noopener">11th of September</a> (p16), theoretically.
While SCI is trading better now than before, I remain somewhat surprised at how the shares have been trading given what appear to be people's opinions and the framework of ownership.
The questions investors looking at this situation should have been asking are...
<ol>
<li>What is the FUTURE SEMBCORP worth?</li>
<li>Where do you want to own FUTURE sembcorp marine?</li>
<li>Where do you think your FELLOW owners of SMM will be willing to sell it?</li>
<li>If you will receive FUTURE sembcorp marine, where would you be happy selling it?</li>
</ol>
My consistent recommendation has been to own sembcorp industries and to NOT OWN sembcorp marine. If you really like SMM, you will get a lot of it by owning SCI. And if you really, REALLY like SMM at S$0.20/share, more than a few times during the rights trading period at more than a few times you could have bought 2.5-6.0% of the future float of SMM by lifting the offer on the rights at the minimum tradable price (someone did once, then regretted it I think).
I expect the complication may be an obstruction for some. I don't think it should be.
Much more below the fold.

2 September 2020 was the last day for investors in Sembcorp Marine (SMM SP) ("SMM") to exercise and pay for their rights to purchase 5 new shares for every 1 held at S$0.20/share in what is The Grand Affair of the...



First, sembcorp marine does a 5:1 rights offering. Parent company Sembcorp Industries (SCI SP) takes up all its rights, backstops more of them, then Temasek backstops the rest of the Rights Offering. Once complete, one-time parent SCI distributes ALL of its sembcorp marine shares resulting from the Rights Offering to its own shareholders. This amounts to ~4.279 to ~4.911 sembcorp marine shares per SCI share - variable because one does not know how much of the backstop will be used.
Because of the nature of this transaction, I have argued this is something akin to a re-IPO of sembcorp marine. 

Next stop, information about the disposition of the "excess" rights application, if any, and on 9 September SCI will trade without rights to receive shares in sembcorp marine. The price of SCI shares will be revised sharply downward on the morning of the 9th to account for the value of the SMM shares, which then trade separately starting the 11th of September (p16), theoretically.
While SCI is trading better now than before, I remain somewhat surprised at how the shares have been trading given what appear to be people's opinions and the framework of ownership.
The questions investors looking at this situation should have been asking are...

What is the FUTURE SEMBCORP worth?
Where do you want to own FUTURE sembcorp marine?
Where do you think your FELLOW owners of SMM will be willing to sell it?
If you will receive FUTURE sembcorp marine, where would you be happy selling it?

My consistent recommendation has been to own sembcorp industries and to NOT OWN sembcorp marine. If you really like SMM, you will get a lot of it by owning SCI. And if you really, REALLY like SMM at S$0.20/share, more than a few times during the rights trading period at more than a few times you could have bought 2.5-6.0% of the future float of SMM by lifting the offer on the rights at the minimum tradable price (someone did once, then regretted it I think).
I expect the complication may be an obstruction for some. I don't think it should be.
Much more below the fold.

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

<a href="https://www.smartkarma.com/entities/sembcorp-industries-ltd" target="_blank" data-smartkarma-citation="entities:1087:1" rel="noopener">Sembcorp Industries (SCI SP)</a> shows some compelling bullish chart points to set up a buy on minor weakness after the breakout above 1.67 that now represents pivot support and the bull/bear line in the sand and the level that ignited the impulsive rally.Trendline and price resistance meet near the 2.05/07 level, representing the level to clear to gain bull traction.Buy volumes need to improve on forward up days as sell volume spikes are still a concern near term and why we see a pullback in the offing.Pullback support comes in near the 8.0 break point of the micro bull wedge and the buy zone down to 1.75 with a stop below pivot support. Macro bull targets noted on the way up.

Sembcorp Industries (SCI SP) shows some compelling bullish chart points to set up a buy on minor weakness after the breakout above 1.67 that now represents pivot support and the bull/bear line in the sand and the level that ignited the impulsive rally.Trendline and price resistance meet near the 2.05/07 level, representing the level to clear to gain bull traction.Buy volumes need to improve on forward up days as sell volume spikes are still a concern near term and why we see a pullback in the offing.Pullback support comes in near the 8.0 break point of the micro bull wedge and the buy zone down to 1.75 with a stop below pivot support. Macro bull targets noted on the way up.

David Blennerhassett

Last Week in Event SPACE: Sembcorp, Keppel, Cathay Pacific, China Conch, BHP, Swire, Huya/Douyu

Equity Bottom-Up

<div>
<div class="content-highlight">After <a href="https://www.smartkarma.com/entities/sembcorp-marine-ltd" target="_blank" data-smartkarma-citation="entities:11:1" rel="noopener">Sembcorp Marine (SMM SP)</a> goes ex-rights, <a href="https://www.smartkarma.com/entities/sembcorp-industries-ltd" target="_blank" data-smartkarma-citation="entities:1087:1" rel="noopener">Sembcorp Industries (SCI SP)</a> is a clear lay-up. Its first half-yearly loss in over a decade (mainly due to <a href="https://www.smartkarma.com/entities/cathay-pacific-airways-ltd" target="_blank" data-smartkarma-citation="entities:243:1" rel="noopener">Cathay Pacific Airways (293 HK)</a>) and the possibility of deletion from the Hang Seng Index, now is not the time to buy <a href="https://www.smartkarma.com/entities/swire-pacific-ltd-cl-a" target="_blank" data-smartkarma-citation="entities:10433:1" rel="noopener">Swire Pacific (A) (19 HK)</a>.</div>
</div>
<div>
Preceding my comments on Sembcorp &amp; Swire are setup/unwind tables for Asia-Pacific Holdcos.
</div>
<div>
As always, more below the fold.
<hr>
<h3>Recent Insights on the SCI/SMM Recap-Demerger Situation</h3>
<div>
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 57px;">
Date
</td>
<td style="width: 41px;">
Ticker
</td>
<td style="width: 461px;">
Insight Title
</td>
<td style="width: 102px;">
Author
</td>
</tr>
<tr>
<td style="width: 57px;">9-Jun-20</td>
<td style="width: 41px;">SCI</td>
<td style="width: 461px;"><a href="https://www.smartkarma.com/insights/sembcorp-marine-and-sci-a-gloriously-messy-recap-and-de-merger-big-win-for-sci" target="_blank" data-smartkarma-citation="insights:40153" rel="noopener">SembCorp Marine and SCI - A Gloriously Messy Recap and De-Merger - Big Win for SCI</a> </td>
<td style="width: 102px;">
<a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a> </td>
</tr>
<tr>
<td style="width: 57px;">9-Jun-20</td>
<td style="width: 41px;">SMM</td>
<td style="width: 461px;"><a href="https://www.smartkarma.com/insights/sembcorp-marine-rights-offer-cast-away" target="_blank" data-smartkarma-citation="insights:40164" rel="noopener">Sembcorp Marine Rights Offer - Cast Away</a> </td>
<td style="width: 102px;">Travis Lundy</td>
</tr>
<tr>
<td style="width: 57px;">9-Jun-20</td>
<td style="width: 41px;">SCI</td>
<td style="width: 461px;"><a href="https://skr.ma/vjYrY" target="_blank" rel="noopener">StubWorld: The Liquidation Of Sembcorp's Holdco</a></td>
<td style="width: 102px;">Blennerhassett</td>
</tr>
<tr>
<td style="width: 57px;">30-Jun-20</td>
<td style="width: 41px;">SCI</td>
<td style="width: 461px;"><a href="https://www.smartkarma.com/insights/thinking-about-sembcorp-industries-future-be-bigly-bullish" target="_blank" data-smartkarma-citation="insights:40809" rel="noopener">Thinking About Sembcorp Industries' Future - Be Bigly Bullish</a> </td>
<td style="width: 102px;">Travis Lundy</td>
</tr>
<tr>
<td style="width: 57px;">24-Jul-20</td>
<td style="width: 41px;">SCI</td>
<td style="width: 461px;"><a href="https://www.smartkarma.com/insights/sembcorp-restructuring-details-timing-announced-the-arithmetic-is-compelling" target="_blank" data-smartkarma-citation="insights:41504" rel="noopener">Sembcorp Restructuring Details &amp; Timing Announced - The Arithmetic Is Compelling</a> </td>
<td style="width: 102px;">Travis Lundy</td>
</tr>
<tr>
<td style="width: 57px;">11-Aug-20</td>
<td style="width: 41px;">SMM</td>
<td style="width: 461px;">
<a href="https://www.smartkarma.com/insights/sembcorp-marine-rights-decided-and-virtual-ipo-set-still-avoid" target="_blank" rel="noopener">Sembcorp Marine Rights Decided And “Virtual IPO” Set (Still Avoid)</a>
</td>
<td style="width: 102px;">
Travis Lundy
</td>
</tr>
<tr>
<td style="width: 57px;">13-Aug-20</td>
<td style="width: 41px;">SCI</td>
<td style="width: 461px;">
<a href="https://skr.ma/VRDr8" target="_blank" rel="noopener">Sembcorp Industries - A Simple Story Which Looks Complicated</a>
</td>
<td style="width: 102px;">
Travis Lundy
</td>
</tr>
</tbody>
</table>
</div>
</div>


After Sembcorp Marine (SMM SP) goes ex-rights, Sembcorp Industries (SCI SP) is a clear lay-up.  Its first half-yearly loss in over a decade (mainly due to Cathay Pacific Airways (293 HK)) and the possibility of deletion from the Hang Seng Index, now is not the time to buy Swire Pacific (A) (19 HK).


Preceding my comments on Sembcorp &amp; Swire are setup/unwind tables for Asia-Pacific Holdcos.


As always, more below the fold.

Recent Insights on the SCI/SMM Recap-Demerger Situation





Date


Ticker


Insight Title


Author



9-Jun-20
SCI
SembCorp Marine and SCI - A Gloriously Messy Recap and De-Merger - Big Win for SCI 

Travis Lundy 


9-Jun-20
SMM
Sembcorp Marine Rights Offer - Cast Away 
Travis Lundy


9-Jun-20
SCI
StubWorld: The Liquidation Of Sembcorp's Holdco
Blennerhassett


30-Jun-20
SCI
Thinking About Sembcorp Industries' Future - Be Bigly Bullish 
Travis Lundy


24-Jul-20
SCI
Sembcorp Restructuring Details &amp; Timing Announced - The Arithmetic Is Compelling 
Travis Lundy


11-Aug-20
SMM

Sembcorp Marine Rights Decided And “Virtual IPO” Set (Still Avoid)


Travis Lundy



13-Aug-20
SCI

Sembcorp Industries - A Simple Story Which Looks Complicated


Travis Lundy







StubWorld: Buy Sembcorp Industries. Don't Buy Swire

Singapore

Sembcorp Industries is a Singaporean state-owned energy and urban development company. It provides sustainable energy solutions, including renewable power (solar, wind, energy storage) and conventional energy (gas and related services), alongside integrated urban solutions such as industrial parks, water, and waste management. The company is headquartered in Singapore and was founded in 1998.

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Sembcorp Industries (SCI SP)

Sembcorp Marine Rights Issue Results : Looks Like a Scheme of Introduction

In an earlier insight I said that the

Travis Lundy

Sembcorp - Last Chance Before...

2 September 2020 was the last day for investors in Sembcorp Marine (SMM SP) ("SMM") to exercise and pay for their rights to purchase 5 new shares...

Travis Lundy

Sembcorp Industries Long Support

Sembcorp Industries (SCI SP) shows some compelling bullish chart points to set up a buy on minor weakness after the breakout above 1.67 that now...

Thomas Schroeder

Last Week in Event SPACE: Sembcorp, Keppel, Cathay Pacific, China Conch, BHP, Swire, Huya/Douyu

Last Week in Event SPACE ... The dynamics here make this entire exercise regarding Sembcorp Marine (SMM SP) effectively a "Virtual IPO" or a...

David Blennerhassett

StubWorld: Buy Sembcorp Industries. Don't Buy Swire

After Sembcorp Marine (SMM SP) goes ex-rights, Sembcorp Industries (SCI SP) is a clear lay-up.Its first half-yearly loss in over a decade (mainly...

David Blennerhassett

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