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.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/downer-edi-ltd" target="_blank" data-smartkarma-citation="entities:12350:1" rel="noopener">Downer EDI Ltd (DOW AU)</a> shares are battered on the back of two quick successive profit warnings, accounting restatements and dividend cuts.</li>
<li>A worrying deterioration in cash generation and an increase in leverage add to the nervousness. Management flux adds to the uncertainty and the chance of a third profit warning.</li>
<li>While Downer’s multiples are in line with peers, momentum is against it and there are question marks if the earnings have been flattered by the misuse of exceptional items.</li>
</ul>



Downer EDI Ltd (DOW AU) shares are battered on the back of two quick successive profit warnings, accounting restatements and dividend cuts.
A worrying deterioration in cash generation and an increase in leverage add to the nervousness. Management flux adds to the uncertainty and the chance of a third profit warning.
While Downer’s multiples are in line with peers, momentum is against it and there are question marks if the earnings have been flattered by the misuse of exceptional items.


Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

<ul>
<li>In this insight, we take a look at the potential index changes for S&amp;P ASX 300, 200, 100, 50, and 20 in the run up to the March 2023 Rebalance.</li>
<li>
<a href="https://www.smartkarma.com/entities/pendal-group-ltd" target="_blank" data-smartkarma-citation="entities:15795:1" rel="noopener">Pendal Group (PDL AU)</a>'s deletion is expected in early-January 2023 and this could trigger an intra-review addition to the ASX 200 index. </li>
<li>I expect there to be one, two, and four changes, respectively, for the ASX 20, ASX 100, and ASX 200 indices in the March 2023 Rebalance. </li>
</ul>


In this insight, we take a look at the potential index changes for S&amp;P ASX 300, 200, 100, 50, and 20 in the run up to the March 2023 Rebalance.

Pendal Group (PDL AU)'s deletion is expected in early-January 2023 and this could trigger an intra-review addition to the ASX 200 index. 
I expect there to be one, two, and four changes, respectively, for the ASX 20, ASX 100, and ASX 200 indices in the March 2023 Rebalance. 


S&P/​​​​​​​​ASX Quiddity Leaderboard Mar 23: Index Changes Galore

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Event-Driven

<ul>
<li>In principle, <a href="https://www.smartkarma.com/entities/jafco-co-ltd" target="_blank" data-smartkarma-citation="entities:8848:1" rel="noopener">Jafco Co Ltd (8595 JP)</a> still wants to be greenmailed to get Murakami-san out. </li>
<li>
<a href="https://www.smartkarma.com/entities/jardine-cycle-carriage-ltd" target="_blank" data-smartkarma-citation="entities:347:1" rel="noopener">Jardine Cycle &amp; Carriage (JCNC SP)</a>i is expensive here - relative to historical values -  and from an implied stub perspective. And the MSCI inclusion event has now passed.</li>
<li>If you think this is a "risk", then you want to be long when the discount is wide and <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> is monetising assets in some way. </li>
</ul>


In principle, Jafco Co Ltd (8595 JP) still wants to be greenmailed to get Murakami-san out. 

Jardine Cycle &amp; Carriage (JCNC SP)i is expensive here - relative to historical values -  and from an implied stub perspective. And the MSCI inclusion event has now passed.
If you think this is a "risk", then you want to be long when the discount is wide and Softbank Group (9984 JP) is monetising assets in some way. 


Last Week in Event SPACE: JAFCO, Jardine Cycle, Softbank, Star Health

Travis Lundy

<ul>
<li>
<a href="https://www.smartkarma.com/entities/monadelphous-group-ltd" target="_blank" data-smartkarma-citation="entities:553:1" rel="noopener">Monadelphous (MND AU)</a> will be added to the S&amp;P ASX 200 Index on 16 December 2022.</li>
<li>This is not a surprise. It has been the lead contender for a December ADD slot since the day after the September rebalance was completed (see <a href="https://www.smartkarma.com/insights/s-p-asx-quiddity-leaderboard-dec-22-top-ranked-asx200-adds-look-interesting" target="_blank" rel="noopener">here</a>).</li>
<li>There is a fair bit of volume to buy, and there are pair trades to do.</li>
</ul>



Monadelphous (MND AU) will be added to the S&amp;P ASX 200 Index on 16 December 2022.
This is not a surprise. It has been the lead contender for a December ADD slot since the day after the September rebalance was completed (see here).
There is a fair bit of volume to buy, and there are pair trades to do.


Monadelphous (MND AU) Is The S&P ASX 200 ADD - There's a Trade Here

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

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<li>
<a href="https://www.smartkarma.com/entities/pilbara-minerals-ltd" target="_blank" data-smartkarma-citation="entities:7460:1" rel="noopener">Pilbara Minerals (PLS AU)</a> will replace <a href="https://www.smartkarma.com/entities/lendlease-group" target="_blank" data-smartkarma-citation="entities:11248:1" rel="noopener">Lendlease Group (LLC AU)</a> in the S&amp;P/ASX 50 Index, while <a href="https://www.smartkarma.com/entities/monadelphous-group-ltd" target="_blank" data-smartkarma-citation="entities:553:1" rel="noopener">Monadelphous (MND AU)</a> will replace <a href="https://www.smartkarma.com/entities/st-barbara-ltd" target="_blank" data-smartkarma-citation="entities:3764:1" rel="noopener">St Barbara Ltd (SBM AU)</a> in the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200</a>.</li>
<li>The largest impact from passive trading will be on <a href="https://www.smartkarma.com/entities/monadelphous-group-ltd" target="_blank" data-smartkarma-citation="entities:553:1" rel="noopener">Monadelphous (MND AU)</a> while the largest flow will be on <a href="https://www.smartkarma.com/entities/pilbara-minerals-ltd" target="_blank" data-smartkarma-citation="entities:7460:1" rel="noopener">Pilbara Minerals (PLS AU)</a>. </li>
<li>There appears to be significant short positioning on <a href="https://www.smartkarma.com/entities/lendlease-group" target="_blank" data-smartkarma-citation="entities:11248:1" rel="noopener">Lendlease Group (LLC AU)</a> as cumulative excess volume and short interest continue to rise.</li>
</ul>



Pilbara Minerals (PLS AU) will replace Lendlease Group (LLC AU) in the S&amp;P/ASX 50 Index, while Monadelphous (MND AU) will replace St Barbara Ltd (SBM AU) in the S&amp;P/ASX 200.
The largest impact from passive trading will be on Monadelphous (MND AU) while the largest flow will be on Pilbara Minerals (PLS AU). 
There appears to be significant short positioning on Lendlease Group (LLC AU) as cumulative excess volume and short interest continue to rise.


S&P/​​​ASX Index Rebalance (Dec 2022): Couple of Changes to Close Out the Year

Australia

Monadelphous Group Limited provides engineering and construction services to the resources and petrochemical industries. The Company provides mining and processing industry maintenance, mining equipment refurbishment, project management, construction, and airport ground handling services. Monadelphous Group serves customers in Australia.

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Monadelphous (MND AU)

Downer EDI (DOW AU): Down or Out

While Downer’s multiples are in line with peers, momentum is against it and there are question marks if the earnings have been flattered by the...

Arun George

S&P/ASX Quiddity Leaderboard Mar 23: Index Changes Galore

Collectively there could be 20+ ADDs/DELs for the S&P ASX 300, 200, 100, 50, and 20 indices between now and the March 2023 Rebalance.

Janaghan Jeyakumar, CFA

Last Week in Event SPACE: JAFCO, Jardine Cycle, Softbank, Star Health

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett