Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/infratil-ltd" target="_blank" data-smartkarma-citation="entities:596:1" rel="noopener">Infratil Ltd (IFT NZ)</a> is acquiring <a href="https://www.smartkarma.com/entities/brookfield-asset-management-lt" target="_blank" data-smartkarma-citation="entities:23741:1" rel="noopener">Brookfield Asset Management Lt (BAM US)</a>'s 49.95% stake in One NZ for NZ$1.8bn. This will be partly funded through a NZ$850m placement.</li>
<li>There will be a NZ$750m underwritten placement at NZ$9.2/share (an 8.9% discount to the last close) and a retail offering of NZ$100m.</li>
<li>There will be passive buying from index trackers post the completion of the placement and the settlement of the shares and that will remove some of the overhang.</li>
</ul>



Infratil Ltd (IFT NZ) is acquiring Brookfield Asset Management Lt (BAM US)'s 49.95% stake in One NZ for NZ$1.8bn. This will be partly funded through a NZ$850m placement.
There will be a NZ$750m underwritten placement at NZ$9.2/share (an 8.9% discount to the last close) and a retail offering of NZ$100m.
There will be passive buying from index trackers post the completion of the placement and the settlement of the shares and that will remove some of the overhang.


Infratil (IFT NZ): NZ$850m Placement & Index Implications

New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul><li>Longroad has potential to be the key driver of IFT NAV for years to come: Over the last six years our implied spot valuation of CDC has increased by ~+NZ$3 (&gt;NZ$4 using IFT's provided independent valuation). </li><li>One NZ a standout performer; rapidly closing the gap to Spark: One NZ reported EBITDA margins of ~26.6%, up ~+2% from FY22</li><li>Management agree to amend incentive fee structure: Reflecting feedback from shareholders, IFT and the Manager have agreed to make amendments to the management agreement</li></ul>

Longroad has potential to be the key driver of IFT NAV for years to come: Over the last six years our implied spot valuation of CDC has increased by ~+NZ$3 (&gt;NZ$4 using IFT's provided independent valuation). One NZ a standout performer; rapidly closing the gap to Spark: One NZ reported EBITDA margins of ~26.6%, up ~+2% from FY22Management agree to amend incentive fee structure: Reflecting feedback from shareholders, IFT and the Manager have agreed to make amendments to the management agreement

Infratil: FY23 Result — CDC Passing the Baton?

<ul><li>Infratil (IFT) reports its FY23 result on Monday, 22 May.</li><li>IFT held a comprehensive investor day at the end of the financial year where it provided FY23 guidance for CDC and One NZ EBITDA, its two key holdings.</li><li>IFT may provide an updated valuation of Longroad after the Inflation Reduction Act (IRA) in the US</li></ul>

Infratil (IFT) reports its FY23 result on Monday, 22 May.IFT held a comprehensive investor day at the end of the financial year where it provided FY23 guidance for CDC and One NZ EBITDA, its two key holdings.IFT may provide an updated valuation of Longroad after the Inflation Reduction Act (IRA) in the US

<ul><li>CDC not acknowledging (any) slowdown in demand: CDC has grown by a CAGR of &gt;25% since IFT's investment</li><li>Renewables; platform benefits in practice: IFT has talked to the value of its platforms for several years</li><li>Vodafone NZ is showing strong momentum; diagnostic imaging recovering: IFT narrowed its EBITDAF guidance by lowering the top end by -NZ$5m and increasing the bottom end by +NZ$10m</li></ul>

CDC not acknowledging (any) slowdown in demand: CDC has grown by a CAGR of &gt;25% since IFT's investmentRenewables; platform benefits in practice: IFT has talked to the value of its platforms for several yearsVodafone NZ is showing strong momentum; diagnostic imaging recovering: IFT narrowed its EBITDAF guidance by lowering the top end by -NZ$5m and increasing the bottom end by +NZ$10m

Thematic (Sector/Industry)

<ul><li>The RBNZ has done its best to make sure none of us approach 2023 with any illusions of good times ahead</li><li>Mortgage rates have hit a 10 year high, inflation is expected to remain stubbornly elevated, and the icing on RBNZ's economic cake is its forecast of four quarters of declining GDP</li><li>When choosing our five stocks to watch we have leaned on companies with the majority of their exposure overseas (Infratil [IFT], Vulcan Steel [VSL], KMD Brands [KMD]) or with attractive valuations (Oceania Healthcare [OCA], SkyCity [SKC]) where we think that the bad news is firmly in the price</li></ul>

The RBNZ has done its best to make sure none of us approach 2023 with any illusions of good times aheadMortgage rates have hit a 10 year high, inflation is expected to remain stubbornly elevated, and the icing on RBNZ's economic cake is its forecast of four quarters of declining GDPWhen choosing our five stocks to watch we have leaned on companies with the majority of their exposure overseas (Infratil [IFT], Vulcan Steel [VSL], KMD Brands [KMD]) or with attractive valuations (Oceania Healthcare [OCA], SkyCity [SKC]) where we think that the bad news is firmly in the price

Equity Strategy - The Year Ahead: Five Themes and Five Stocks

New Zealand

Infratil Limited is an infrastructure investment company. The Company invests in airports, energy such as renewable and waste-energy, and public transportation.

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Infratil (IFT AU)

Infratil (IFT NZ): NZ$850m Placement & Index Implications

Infratil is acquiring Brookfield's 49.95% stake in One NZ for NZ$1.8bn. The underwritten placement of NZ$750m is at NZ$9.2/shr, an 8.9% discount to...

Brian Freitas

Infratil: FY23 Result — CDC Passing the Baton?

Infratil (IFT) delivered a strong FY23 result where all main portfolio companies contributed; After several years of IFT relying heavily on CDC for...

Forsyth Barr

Infratil: FY23 Preview — Look Ahead

Infratil (IFT) reports its FY23 result on Monday, 22 May; IFT held a comprehensive investor day at the end of the financial year where it provided...

Forsyth Barr

Infratil: Behind the Scenes Edition

Infratil (IFT) hosted an unusually upbeat investor day, even by its own high standards; the three key portfolio companies; CDC, Vodafone NZ (soon...

Forsyth Barr

Equity Strategy - The Year Ahead: Five Themes and Five Stocks

When choosing our five stocks to watch we have leaned on companies with the majority of their exposure overseas (Infratil [IFT], Vulcan...

Forsyth Barr

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