Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>The MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), EAFE (EFA-US), and EM (EEM-US) are all reversing topside their 2-month downtrends.</li>
<li>Despite this being a bullish short-term development, we still expect $93 to cap upside on the ACWI-US, leaving about 4-5% upside from here (at time of writing)</li>
<li>As a result, we would use any further strength as an opportunity to get more defensive. Actionable Themes: REA-AU, GFL-CA, GFL-US, Consumer Staples, Health Care, and Gold Miners</li>
</ul>


The MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), EAFE (EFA-US), and EM (EEM-US) are all reversing topside their 2-month downtrends.
Despite this being a bullish short-term development, we still expect $93 to cap upside on the ACWI-US, leaving about 4-5% upside from here (at time of writing)
As a result, we would use any further strength as an opportunity to get more defensive. Actionable Themes: REA-AU, GFL-CA, GFL-US, Consumer Staples, Health Care, and Gold Miners


Shift To Defensives as $ACWI Makes Push for $93; Remain Overweight Europe; Opptys in China/HK, Japan

<p>Our neutral and cautious outlook continues to be reinforced by market dynamics that have generally deteriorated over the past week. RS improvement for defensives (Utilities, Staples, Real Estate, and Health Care) continues to make these Sectors attractive. Meanwhile, not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Until supports start to break we cannot be bearish, though we would not be surprised to see ~5% downside with potential for more.</p>

Our neutral and cautious outlook continues to be reinforced by market dynamics that have generally deteriorated over the past week. RS improvement for defensives (Utilities, Staples, Real Estate, and Health Care) continues to make these Sectors attractive. Meanwhile, not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Until supports start to break we cannot be bearish, though we would not be surprised to see ~5% downside with potential for more.

Crude Oil and Copper Breakdowns Reinforce Our Concerns; Defensive Sectors Remain Attractive

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<div>
<p>Back on the <a href="https://ccaauauesprdrsg057str001.blob.core.windows.net/media/media/ccamatil/ccamatilau/files/asx/2020/201026_ccepindicativeproposalandamatiltradingupdate.pdf" target="_blank" rel="noopener">26 October</a>, Australia's largest non-alcoholic beverage bottler <a href="https://www.smartkarma.com/entities/coca-cola-amatil-ltd" target="_blank" data-smartkarma-citation="entities:675:1" rel="noopener">Coca Cola Amatil (CCL AU)</a> announced an indicative proposal of A$12.75/share from Coca-Cola European Partners plc (CCEP). A firm Offer was <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02304483-2A1261358?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> on the 4 November. Reports immediately <a href="https://www.afr.com/companies/manufacturing/coca-cola-amatil-takeover-delayed-as-investors-call-for-higher-bid-20210125-p56wqp" target="_blank" rel="noopener">surfaced</a> that some major shareholders considered the proposal inadequate. </p>
</div>
<div>
<p>Responding to shareholder pushback, CCEP and CCL <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02340945-2A1280279?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">entered into</a> a Scheme Implementation Deed at A$13.50/share on the 15 February, a 5.9% bump to the firm Offer on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02304483-2A1261358?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">4 November</a>, and a  25.6% premium to the undisturbed price. The Offer was declared best and final. </p>
<p>Independent CCL shareholders will vote on the proposal at the Scheme Meeting to be held on the 16 April. <a href="https://www.smartkarma.com/entities/coca-cola-co-the" target="_blank" data-smartkarma-citation="entities:979:1" rel="noopener">Coca-Cola Co (KO US)</a> (TCCC) with 30.808% of shares out, will abstain from voting. </p>
</div>
<div>CCEP has now <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02359882-2A1290488?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">advised</a> CCL that it has elected to purchase all the remaining shares held by TCCC at the implementation of the Scheme, for cash. TCCC will subsequently cease to be a shareholder of CCL.</div>
<div></div>
<div>
<p>As always, more below the fold.</p>
</div>


Back on the 26 October, Australia's largest non-alcoholic beverage bottler Coca Cola Amatil (CCL AU) announced an indicative proposal of A$12.75/share from Coca-Cola European Partners plc (CCEP). A firm Offer was announced on the 4 November. Reports immediately surfaced that some major shareholders considered the proposal inadequate. 


Responding to shareholder pushback, CCEP and CCL entered into a Scheme Implementation Deed at A$13.50/share on the 15 February, a 5.9% bump to the firm Offer on the 4 November, and a  25.6% premium to the undisturbed price. The Offer was declared best and final. 
Independent CCL shareholders will vote on the proposal at the Scheme Meeting to be held on the 16 April. Coca-Cola Co (KO US) (TCCC) with 30.808% of shares out, will abstain from voting. 

CCEP has now advised CCL that it has elected to purchase all the remaining shares held by TCCC at the implementation of the Scheme, for cash. TCCC will subsequently cease to be a shareholder of CCL.


As always, more below the fold.


IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<p><a href="https://www.smartkarma.com/entities/coca-cola-amatil-ltd" target="_blank" data-smartkarma-citation="entities:675:1" rel="noopener">Coca Cola Amatil (CCL AU)</a> is one of the largest bottlers and distributors of ready-to-drink non-alcoholic and alcoholic beverages and coffee in the Asia Pacific region. <a href="https://www.smartkarma.com/entities/coca-cola-european-partners" target="_blank" data-smartkarma-citation="entities:29709:1" rel="noopener">Coca-Cola European Partners (CCEP US)</a>/CCEP  has made a non-binding offer to acquire 69.2% of the issued share capital of Amatil, which is held by shareholders other than <a href="https://www.smartkarma.com/entities/coca-cola-co-the" target="_blank" data-smartkarma-citation="entities:979:1" rel="noopener">Coca Cola Co (KO US)</a>/TCCC i.e. independent shareholders, through a scheme of arrangement. Independent shareholders will receive A$12.75 per share in cash less any final 2H20 dividends paid. The offer price represents a premium of 23% to the 1-week VWAP. TCCC’s 30.8% shareholding in Amatil will be separately acquired in two or more tranches on less favourable terms to independent shareholders. The transaction is targeted for a 1Q20 completion. </p><div class="content-highlight"><p>Unlike previous takeover offers for Amatil, this proposal comes with TCCC’s backing. The key next step is for CCEP and Amatil to enter into a binding agreement after a short due diligence period. The scheme of arrangement will require Amati shareholder approval. Overall, we believe that the offer price is attractive and anticipate shareholder approval for the scheme. </p></div>

Coca Cola Amatil (CCL AU) is one of the largest bottlers and distributors of ready-to-drink non-alcoholic and alcoholic beverages and coffee in the Asia Pacific region. Coca-Cola European Partners (CCEP US)/CCEP  has made a non-binding offer to acquire 69.2% of the issued share capital of Amatil, which is held by shareholders other than Coca Cola Co (KO US)/TCCC i.e. independent shareholders, through a scheme of arrangement. Independent shareholders will receive A$12.75 per share in cash less any final 2H20 dividends paid. The offer price represents a premium of 23% to the 1-week VWAP. TCCC’s 30.8% shareholding in Amatil will be separately acquired in two or more tranches on less favourable terms to independent shareholders. The transaction is targeted for a 1Q20 completion. Unlike previous takeover offers for Amatil, this proposal comes with TCCC’s backing. The key next step is for CCEP and Amatil to enter into a binding agreement after a short due diligence period. The scheme of arrangement will require Amati shareholder approval. Overall, we believe that the offer price is attractive and anticipate shareholder approval for the scheme. 

Coca-Cola European Partners’ Takeover Bid for Coca-Cola Amatil

<p>Markets are showing signs of weakening at logical resistance as we anticipated in last week’s <em>Int’l Compass </em>- we recommend being selective in new purchases. At the same time we are seeing a number of indicators that are giving signals conducive to higher equity prices, meaning global equities may be gearing up for an eventual breakout topside resistance. In this report we highlight some attractive and actionable themes (Miners, consumer staples, and several attractive individual set ups in Thailand) along with indicators that support our overall constructive outlook.</p>

Markets are showing signs of weakening at logical resistance as we anticipated in last week’s Int’l Compass - we recommend being selective in new purchases. At the same time we are seeing a number of indicators that are giving signals conducive to higher equity prices, meaning global equities may be gearing up for an eventual breakout topside resistance. In this report we highlight some attractive and actionable themes (Miners, consumer staples, and several attractive individual set ups in Thailand) along with indicators that support our overall constructive outlook.

U.S.Dollar Weakness A Tailwind For International Markets

Italy

Coca-Cola HBC AG is one of the bottlers in the Coca-Cola system, operating plants in Europe, Africa, and Asia. The Company produces, sells, and distributes a wide range of non-alcoholic beverages, including sparkling, juice, water, sport, energy, tea, and coffee.

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Coca-Cola HBC (EEE GA)

Shift To Defensives as $ACWI Makes Push for $93; Remain Overweight Europe; Opptys in China/HK, Japan

$ACWI, $ACWX, $EFA, and $EEM all reversing topside their 2-month downtrends. Despite this bullish short-term development, we still expect $93 to...

Vermilion Research

Crude Oil and Copper Breakdowns Reinforce Our Concerns; Defensive Sectors Remain Attractive

Our cautious outlook is reinforced by ongoing developments. Relative strength improvement for defensives (Utilities, Staples, Real Estate, Health...

Vermilion Research

Coca Cola Amatil (CCL AU): This Is It

Trading tight at a gross/annualised spread of ~0.5%/4%. Although the franking credits attached to the final dividend will represent additional...

David Blennerhassett

Coca-Cola European Partners’ Takeover Bid for Coca-Cola Amatil

Coca-Cola European Partners has made a non-binding offer to acquire Amatil at A$12.75 per share in cash less 2H20 dividends paid. Overall, we...

Arun George

U.S.Dollar Weakness A Tailwind For International Markets

Markets are showing signs of weakening at logical resistance as we anticipated in last week’s Int’l Compass - we recommend being selective in new...

Vermilion Research

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