EM PM, Ecstrat

Emad Mostaque

EM PM

Ecstrat

Ecstrat is a consultancy advising on asset allocation between global equity markets, with a focus on the intersection of governments, geopolitics, governance and markets.
 
Over the past few years and more especially since the Great Financial Crisis (GFC), investors have become more focused on short-term market movements and real-time returns and have consequently neglected the analysis of the underlying structural themes that underpin longer term performance.
​
More specifically we believe that the evolution of governance-based relationships between investors, controlling shareholders, labour and the state is one of the primary determinants of both relative and absolute performance between individual equity markets.
 
We will endeavour to provide investors with some of the context surrounding governance-related issues which encompass many different disciplines including history, economics and political science, as well as the financial metrics which are the most obvious manifestation of the structural characteristics of each market.
 
We will pay particular attention to the shifts and potential inflection points for governance in individual markets as these are often the best lead indicators for both economic and market performance.

Thematic (Sector/Industry)

Oil markets continue to be turgid as producers look to make up lower prices by increased volume.&nbsp;This has led to markets that are severely overstretched versus their fundamentals.If we look at the oil futures curve structure and elements likely to impact it, oil looks like it may surprise to the upside much as it has surprised to the downside.This piece summarises the bull case for a complex topic.

Oil markets continue to be turgid as producers look to make up lower prices by increased volume.&nbsp;This has led to markets that are severely overstretched versus their fundamentals.If we look at the oil futures curve structure and elements likely to impact it, oil looks like it may surprise to the upside much as it has surprised to the downside.This piece summarises the bull case for a complex topic.

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

Although we continue to believe that crude oil prices are well below the levels required to incentivize sufficient investment to meet demand beyond 2017, we are reducing our long-term price outlook by $5 per barrel to $70 Brent and $64 WTI to reflect bearish developments in recent quarters in the outlook for low-cost supply and industrywide cost deflation.While $5 represents a relatively small adjustment to our long-term oil price assumption, we are also adjusting our near-term activity and pricing forecasts to reflect our belief that industry oversupply is making it very likely that crude markets will not approach any semblance of normalcy until 2017.Taken together, these changes have a meaningful impact on a handful of our energy sector fair value estimates, particularly firms that currently employ large amounts of leverage.&nbsp;We are beginning to publish new fair value estimates today, and all companies will be live two weeks from today.Analyst: Mark TaylorSector Head: Mathew HodgeFull report below the fold....

Although we continue to believe that crude oil prices are well below the levels required to incentivize sufficient investment to meet demand beyond 2017, we are reducing our long-term price outlook by $5 per barrel to $70 Brent and $64 WTI to reflect bearish developments in recent quarters in the outlook for low-cost supply and industrywide cost deflation.While $5 represents a relatively small adjustment to our long-term oil price assumption, we are also adjusting our near-term activity and pricing forecasts to reflect our belief that industry oversupply is making it very likely that crude markets will not approach any semblance of normalcy until 2017.Taken together, these changes have a meaningful impact on a handful of our energy sector fair value estimates, particularly firms that currently employ large amounts of leverage.&nbsp;We are beginning to publish new fair value estimates today, and all companies will be live two weeks from today.Analyst: Mark TaylorSector Head: Mathew HodgeFull report below the fold....

Oil Price Outlook: All Signs Point to a Brutal Near-Term and a Meaningful Long-Term Recovery

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>On the 11th March, SOE-backed <a href="https://www.smartkarma.com/entities/cimc-vehicles-group-co-ltd" target="_blank" data-smartkarma-citation="entities:28012:1" rel="noopener">CIMC Vehicle Group Co Ltd (1839 HK)</a> announced a firm Offer at HK$7.50/H-share from its major shareholder, CIMC Group. Terms are final. </li>
<li>CIMC Group holds 74.24% of the H-shares and will abstain from voting at the H-share class meeting. 14.21% of the remaining 25.76% H-shares have given irrevocables supporting the Offer.</li>
<li>The Circular is now <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0326/2024032600780.pdf" target="_blank" rel="noopener">out</a>. The shareholder vote is the 18th April. Payment is the 13th May, IF unconditional on the first close. This looks done.</li>
</ul>


On the 11th March, SOE-backed CIMC Vehicle Group Co Ltd (1839 HK) announced a firm Offer at HK$7.50/H-share from its major shareholder, CIMC Group. Terms are final. 
CIMC Group holds 74.24% of the H-shares and will abstain from voting at the H-share class meeting. 14.21% of the remaining 25.76% H-shares have given irrevocables supporting the Offer.
The Circular is now out. The shareholder vote is the 18th April. Payment is the 13th May, IF unconditional on the first close. This looks done.


CIMC (1839 HK): 18th April Shareholder Vote

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cimc-vehicles-group-co-ltd" target="_blank" data-smartkarma-citation="entities:28012:1" rel="noopener">CIMC Vehicle Group Co Ltd (1839 HK)</a> has despatched the offer document, and the H Share HK$7.50 offer is open. The H Shareholders class vote is on 18 April.  </li>
<li>The key condition is approval by at least 75% of independent H Shareholders (&lt;10% of all independent H Shareholders rejection) along with a 90% minimum acceptance condition.  </li>
<li>The de-rating of peers and ongoing US investigation favours meeting the 90% threshold. However, the dire minority AGM/EGM participation rates suggest that retail apathy may derail the offer. </li>
</ul>



CIMC Vehicle Group Co Ltd (1839 HK) has despatched the offer document, and the H Share HK$7.50 offer is open. The H Shareholders class vote is on 18 April.  
The key condition is approval by at least 75% of independent H Shareholders (&lt;10% of all independent H Shareholders rejection) along with a 90% minimum acceptance condition.  
The de-rating of peers and ongoing US investigation favours meeting the 90% threshold. However, the dire minority AGM/EGM participation rates suggest that retail apathy may derail the offer. 


CIMC Vehicles (1839 HK): Vote on 18 April as Uncertainty Lingers on the 90% Acceptance Threshold

<ul>
<li>Back on the 28 November 2023, SOE-backed <a href="https://www.smartkarma.com/entities/cimc-vehicles-group-co-ltd" target="_blank" data-smartkarma-citation="entities:28012:1" rel="noopener">CIMC Vehicle Group Co Ltd (1839 HK)</a> announced a conditional H-share buyback at a $7.00/H-share, a paltry 8.6% premium to last close.</li>
<li>This Scheme-like Offer, with a tendering condition, secured SAFE approval late January. But last month CIMC announced a CBP investigation into the evasion of U.S. anti-dumping and countervailing duties.</li>
<li>Now CIMC has announced a firm Offer at HK$7.50/share. Terms are final. The majority of independent H-shareholders are supportive. This looks done. Possible completion late-May, early-June.</li>
</ul>


Back on the 28 November 2023, SOE-backed CIMC Vehicle Group Co Ltd (1839 HK) announced a conditional H-share buyback at a $7.00/H-share, a paltry 8.6% premium to last close.
This Scheme-like Offer, with a tendering condition, secured SAFE approval late January. But last month CIMC announced a CBP investigation into the evasion of U.S. anti-dumping and countervailing duties.
Now CIMC has announced a firm Offer at HK$7.50/share. Terms are final. The majority of independent H-shareholders are supportive. This looks done. Possible completion late-May, early-June.


China

Inner Mongolia Yitai Coal Company Limited is a large-scale energy enterprise primarily engaged in coal production, transportation, and sales, including mining, processing, and distribution. The company also operates in coal-related chemical processing, producing environmentally friendly thermal coal, liquid wax, naphtha, and liquefied petroleum gas. It provides extensive railway and road transportation services. The company was founded in August 1997 and is headquartered in Ordos City, Inner Mongolia, China.

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Inner Mongolia Yitai Coal (3948 HK)

How Oil Can Head over $100 by 2017

Oil markets continue to be turgid as producers look to make up lower prices by increased volume. This has led to markets that are severely...

Emad Mostaque

Oil Price Outlook: All Signs Point to a Brutal Near-Term and a Meaningful Long-Term Recovery

Although we continue to believe that crude oil prices are well below the levels required to incentivize sufficient investment to meet demand beyond...

Morningstar, Inc.

CIMC (1839 HK): 18th April Shareholder Vote

Trading at a gross/annualised spread of 3.3%/28.7% assuming late-May. I might pay up to HK$7.35-7.38. Below that would be preferable. This insight...

David Blennerhassett

CIMC Vehicles (1839 HK): Vote on 18 April as Uncertainty Lingers on the 90% Acceptance Threshold

The 90% minimum acceptance condition is a key risk in the context of a light offer and poor minority AGM/EGM participation rates. Risk/reward...

Arun George

CIMC (1839 HK): Firm Offer. With A Bump!

Trading at a gross/annualised spread of 4.9%/25.8% assuming early-May, mid-June completion. I might pay up to HK$7.30. Below that would be...

David Blennerhassett

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