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

<ul>
<li>Last week we noted that the bullish reversals had begun, with the MSCI ACWI (ACWI-US), STOXX Europe 50, and SPX the first few to reverse topside their 4-month downtrends.</li>
<li>As we discuss below, bullish reversals are proliferating globally, something that continues to support our belief that global equities are bottoming.</li>
<li>Global growth Sectors continue to gain momentum and have emerged as leadership -- overweight growth. Sectors covered today include Technology, Consumer Discretionary, and Industrials -- add exposure</li>
</ul>


Last week we noted that the bullish reversals had begun, with the MSCI ACWI (ACWI-US), STOXX Europe 50, and SPX the first few to reverse topside their 4-month downtrends.
As we discuss below, bullish reversals are proliferating globally, something that continues to support our belief that global equities are bottoming.
Global growth Sectors continue to gain momentum and have emerged as leadership -- overweight growth. Sectors covered today include Technology, Consumer Discretionary, and Industrials -- add exposure


Bullish Reversals Proliferate; Stick With Growth; Buy Ideas in Tech, Discretionary, & Industrials

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/orica-ltd" target="_blank" data-smartkarma-citation="entities:895:1" rel="noopener">Orica Ltd (ORI AU)</a> is launching an institutional offering of shares today to fund the purchase of Axis Mining Technology to expand the Digital [Mining] Solutions offering.</li>
<li>Orica has launched an equity offering of &gt;2x the size of the takeover (adds A$280mm of working capital). Both acquisition and placement are expected to be accretive in Year1.</li>
<li>There will be a separate SPP on the follow. Expect this to be well-received and expect "fast money" to be rebuffed. There is significant passive buying to do.</li>
</ul>



Orica Ltd (ORI AU) is launching an institutional offering of shares today to fund the purchase of Axis Mining Technology to expand the Digital [Mining] Solutions offering.
Orica has launched an equity offering of &gt;2x the size of the takeover (adds A$280mm of working capital). Both acquisition and placement are expected to be accretive in Year1.
There will be a separate SPP on the follow. Expect this to be well-received and expect "fast money" to be rebuffed. There is significant passive buying to do.


Orica Offering - Concentrated Active Holder Base Means Over-Raise Should Be OK - Index Implications

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/orica-ltd" target="_blank" data-smartkarma-citation="entities:895:1" rel="noopener">Orica Ltd (ORI AU)</a> is looking to raise US$450m (~A$650m) from issuing 40.6m primary shares at a 7% fixed discount to its last close.</li>
<li>The proceeds will be used to fund the acquisition of Axis Mining Technology and the firm’s working capital needs.</li>
<li>The deal is relatively large one to process, representing 22.3 days of three month ADV and 9.2% of current mcap.</li>
</ul>



Orica Ltd (ORI AU) is looking to raise US$450m (~A$650m) from issuing 40.6m primary shares at a 7% fixed discount to its last close.
The proceeds will be used to fund the acquisition of Axis Mining Technology and the firm’s working capital needs.
The deal is relatively large one to process, representing 22.3 days of three month ADV and 9.2% of current mcap.


Orica Limited Placement - Accretive Acquisition Coupled with Strong Momentum

David Blennerhassett

Event-Driven

<ul>
<li>Fourteen years after its acquisition, <strong><a href="https://www.smartkarma.com/entities/incitec-pivot-ltd" target="_blank" data-smartkarma-citation="entities:1127:1" rel="noopener">Incitec Pivot (IPL AU)</a></strong> plans to demerge Dyno Nobel from its fertilizer ops.</li>
<li>The split has been a long time coming. A strategic review of its fertilizer segments dates back to at least September 2019. </li>
<li>If the demerger is approved, IPL shareholders will receive shares in Incitec Pivot Fertilisers Limited in proportion to their existing shareholding in IPL, which will be rebranded Dyno Nobel Limited.</li>
</ul>


Fourteen years after its acquisition, Incitec Pivot (IPL AU) plans to demerge Dyno Nobel from its fertilizer ops.
The split has been a long time coming. A strategic review of its fertilizer segments dates back to at least September 2019. 
If the demerger is approved, IPL shareholders will receive shares in Incitec Pivot Fertilisers Limited in proportion to their existing shareholding in IPL, which will be rebranded Dyno Nobel Limited.


<ul>
<li>The lows have likely been established for this correction, but a bottoming process would likely take weeks or potentially months and could come with more tests of the lows.</li>
<li>Japan's TOPIX and Nikkei 225 are each testing their respective downtrends. The EURO STOXX 50 is testing resistance in the 4040-4090 range. Germany's DAX is testing major resistance at 14,815-14,950.</li>
<li>It is likely that this initial 2-3 week bounce has run its course; stick with cyclical value and defensives, areas we have been focused on for most of 2022.</li>
</ul>


The lows have likely been established for this correction, but a bottoming process would likely take weeks or potentially months and could come with more tests of the lows.
Japan's TOPIX and Nikkei 225 are each testing their respective downtrends. The EURO STOXX 50 is testing resistance in the 4040-4090 range. Germany's DAX is testing major resistance at 14,815-14,950.
It is likely that this initial 2-3 week bounce has run its course; stick with cyclical value and defensives, areas we have been focused on for most of 2022.


Sticking With Cyclical Value and Defensives; Adding Large-Cap Japan Technology

Australia

Orica Limited is a diversified manufacturing company.  The Company produces industrial and specialty chemicals, polyethylene, surface coatings for vehicles, food and beverage flavoring and fragrances, packaging and appliances. The Company also supplies explosive and blasting services to the mining, quarrying and construction industries.

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Orica Ltd (ORI AU)

Bullish Reversals Proliferate; Stick With Growth; Buy Ideas in Tech, Discretionary, & Industrials

Bullish reversals begun last week in $ACWI, $SPX, and $STOXX Europe 50, with each reversing topside their 4-month downtrends. Now, bullish...

Vermilion Research

Orica Offering - Concentrated Active Holder Base Means Over-Raise Should Be OK - Index Implications

Orica is raising more than it needs to buy privately-held Axis Mining but it will be accretive in Year 1. There is an equity raise of A$650mm...

Travis Lundy

Orica Limited Placement - Accretive Acquisition Coupled with Strong Momentum

Orica Ltd (ORI AU) is looking to raise US$450m (~A$650m) from issuing 40.6m primary shares at a 7% fixed discount to its last close.

Clarence Chu

Explosive Demerger For Incitec Pivot

The move today - down 1.4% - is illustrative of what the market expects can be extracted from the demerger. Perhaps this might shake out some...

David Blennerhassett

Sticking With Cyclical Value and Defensives; Adding Large-Cap Japan Technology

Sticking With Cyclical Value & Defensives; Adding Large-Cap Japan Technology. 2-3 week bounce has likely run its course with $TOPIX $Nikkei 225,...

Vermilion Research

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