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Smartkarma Daily Briefs

Feb 07
0

Daily Brief South Korea: Samhyun and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Samhyun IPO Valuation Analysis

Samhyun IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation of Samhyun is target price of 28,106 won, which is 25% higher than the mid-point of the IPO price range (22,500 won).
  • Given the moderate upside, we have a Positive view of Samhyun IPO. Our base case valuation is based on P/E of 34.6x net profit of 8.6 billion won in 2023.
  • Samhyun developed one of the world’s first CVVD (Continuously Variable Valve Duration) technology for automobile engines, which improves fuel efficiency by controlling the engine’s valve opening time.

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Feb 07
0

Daily Brief United States: Dollar Index, Vitesse Energy and more

By | Daily Briefs, United States

In today’s briefing:

  • Monitoring Rising Treasury Yields & U.S. Dollar (DXY); What Would Lead Us to Get Cautious?
  • Vitesse Energy, Inc. – Estimate Update

Monitoring Rising Treasury Yields & U.S. Dollar (DXY); What Would Lead Us to Get Cautious?

By Joe Jasper

  • More restrictive Fed policy than expected is disproportionately hitting small/mid-caps which are more sensitive to higher interest rates. This suggests we could see further consolidation for small- and mid-caps.
  • Large-Caps (SPX, Nasdaq 100, DJI) remain bullish on continued strength from mega-caps (AMZN, META, NVDA,MSFT). Our bullish outlook remains appropriate, but we discuss what would lead us to get cautious.
  • 1-, 2-, and 10-year Treasury yields testing resistance today and failing. U.S. dollar (DXY) also testing key resistance at $104.60. We also push back on the bad breadth argument (again).

Vitesse Energy, Inc. – Estimate Update

By Water Tower Research

  • We are updating our 4Q23 and FY24 estimates to reflect actual 4Q23 reference prices and lower estimated FY24 natural gas prices.
  • Our 4Q23 NYMEX reference prices averaged $78.32/bbl for oil and $2.92/MMBtu for natural gas compared with our $85.00 and $3.00/MMBtu estimates.
  • We have lowered our average FY24 natural gas price estimate to $2.66/MMBtu from $3.44/MMBtu. We are currently modeling average FY24 oil prices of $80/bbl.

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Feb 07
0

Daily Brief India: Power Finance, Titan Co Ltd, State Bank Of India, Guangzhou R&F Properties and more

By | Daily Briefs, India

In today’s briefing:

  • NIFTY NEXT50 Index Rebalance Preview: Potential Adds Continue to Run
  • NIFTY100 Low Volatility 30 Index Rebalance Preview: One Change in March
  • State Bank of India (SBIN) – 3Q24 Update: Short-Term Pressure Is an Opportunity to Accumulate
  • Morning Views Asia: Bharti Airtel, Guangzhou R&F Properties, UPL Ltd

NIFTY NEXT50 Index Rebalance Preview: Potential Adds Continue to Run

By Brian Freitas

  • With the review period for the March rebalance complete, there could be 6 potential changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) using the current index methodology.
  • Estimated one-way turnover is 13.9% resulting in a one-way trade of INR 28.6bn. Four inclusions will have over 1x ADV to buy; five deletions will have 2.5x+ ADV to sell.
  • The potential adds have outperformed the potential deletes by 28.6% over the last month. With positioning from a rebalance perspective mostly done, gradually unwind over the next few weeks.

NIFTY100 Low Volatility 30 Index Rebalance Preview: One Change in March

By Brian Freitas

  • There could be one change for the Nifty100 Low Volatility 30 Index that will be implemented at the close on 28 March.
  • Constituent changes, volatility changes and capping changes will result in one-way turnover of 12.6% and in a one-way trade of INR 3.7bn.
  • While the deletion is fairly certain, there are a few non-constituents around the same level of volatility and price movements over the next few weeks will determine the inclusion.

State Bank of India (SBIN) – 3Q24 Update: Short-Term Pressure Is an Opportunity to Accumulate

By Raj Saya, CA, CFA

  • State Bank Of India (SBIN IN) has reported its 3Q24 (Dec-23) results with a one-off pension and wages revision charge which impacts the short-term earnings profile.
  • Medium-Term ROE Forecast Intact (16% to 18%) with management confident of even touching 20% in next couple of years; loan growth forecast of 14% to 16% for FY25e-FY26e.
  • We reiterate our view: P/BV is cheap at 1.3x FY25e. SBIN has the potential to re-rate to P/BV of ~1.6x FY25e in the near term (~40% upside). Opportunity to ADD.

Morning Views Asia: Bharti Airtel, Guangzhou R&F Properties, UPL Ltd

By Leonard Law, CFA

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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Feb 07
0

Daily Brief China: L’Occitane, Water Oasis, Kayou, Guangzhou R&F Properties, Xiaocaiyuan International Holding and more

By | China, Daily Briefs

In today’s briefing:

  • L’Occitane (973 HK): Blackstone Pondering an Offer
  • Water Oasis 1161 HK: Gone Ex-Dividend, Trading at 7.5x PE FY24 and an 11% Dividend Yield
  • L’Occitane (973 HK): Here We Go Again
  • Kayou Pre-IPO Tearsheet
  • Morning Views Asia: Bharti Airtel, Guangzhou R&F Properties, UPL Ltd
  • Pre-IPO Xiaocaiyuan International Holding – A “Dark Horse” In Mass Chinese Cuisine Market

L’Occitane (973 HK): Blackstone Pondering an Offer

By Arun George

  • Bloomberg reports that L’Occitane (973 HK) draws takeover interest from Blackstone (BX US), which is considering partnering with Chairman and largest shareholder Reinold Geiger.
  • Blackstone needs an attractive takeover premium due to the presence of significant disinterested shareholders (Mr. Geiger and Acatis KVG).
  • Shareholders will be wary of the latest rumour due to Mr Geiger’s aborted offer on 4 September 2023. Nevertheless, the valuation is undemanding compared to peer multiples.

Water Oasis 1161 HK: Gone Ex-Dividend, Trading at 7.5x PE FY24 and an 11% Dividend Yield

By Sameer Taneja

  • Water Oasis (1161 HK) just went ex-dividend on 6th Feb and is now trading at a 7.5x PE FY24e and a 10.7% dividend yield on trailing FY23 earnings.  
  • The company has refurbished its flagship stores, and we believe it can perform 8-9% better year over year for FY24 than FY23.
  • The company also has 230 mn HKD net cash (after netting dividends paid out), representing     26% of market capitalization.

L’Occitane (973 HK): Here We Go Again

By David Blennerhassett

  • From 2018 onward, French beauty retailer L’Occitane (973 HK) has apparently drawn interest from the likes of Advent International and its controlling shareholder Chairman Reinold Geiger – amongst others. 
  • There is substance to these “Offers” – Geiger confirmed in August 2023 he was contemplating a conditional voluntary general Offer. He holds 72.65% of shares out according to the HKEx. 
  • The latest news, with no definitive source, is that Blackstone is mulling the possibility of teaming up with Geiger on a buyout.

Kayou Pre-IPO Tearsheet

By Ethan Aw

  • Kayou (000KAYOU CH) is looking to raise up to US$500m in its upcoming HK IPO. The deal will be run by CICC, Morgan Stanley and JP Morgan.
  • Kayou is a Chinese pan-entertainment product retailer of toys, with trading cards in particular as its core product. 
  • As of 9M23 (30th Sep 23), it had an IP matrix of 44 IPs through licensing from IP partners and the development of proprietary IPs. 

Morning Views Asia: Bharti Airtel, Guangzhou R&F Properties, UPL Ltd

By Leonard Law, CFA

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

Pre-IPO Xiaocaiyuan International Holding – A “Dark Horse” In Mass Chinese Cuisine Market

By Xinyao (Criss) Wang

  • Based on effective strategic positioning, Xiaocaiyuan is able to seize the market’s demand for cost-effective catering during consumption downgrade and the trend of increasing restaurant chain rate in China.
  • The key for Xiaocaiyuan to generate increasing profits at low spending-per-consumer is due to its strong supply chain, which will be favored by capital especially when Xiaocaiyuan enters community catering.
  • Xiaocaiyuan International Holding (XCY HK) is better than peers. However, due to poor sentiment in HKEX, it’s not sure if Xiaocaiyuan’s valuation/share price performance could outperform peers as well.

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Feb 07
0

Daily Brief Japan: Lawson Inc, Oriental Land, Shiseido Company, Nissan Motor, Lasertec Corp and more

By | Daily Briefs, Japan

In today’s briefing:

  • The Next Step in Lawson’s Big Boots Adventure – KDDI and MitCorp to Take It Private
  • Lawson (2651 JP): KDDI Corp (9433 JP) Pre-Conditional Tender Offer at JPY10,360
  • Oriental Land: A Storm Brewing from Activist Coalition
  • Shiseido (4911 JP):  This Fallen Angel Is Fixable
  • Lawson & KDDI: Not Just Because Japanese E-Commerce Is an Omnichannel Model
  • Nissan’s Renault Led Selldown Updates – Lack of Ampere Listing Brings Back the US$4bn Overhang
  • KLA & LaserTec, AMD, Hyperscaler Capex, SK Hynix, SWKS and QRVO, WOLF, MCHP

The Next Step in Lawson’s Big Boots Adventure – KDDI and MitCorp to Take It Private

By Travis Lundy

  • Today, just before the close, the Nikkei sprung a headline saying KDDI Corp (9433 JP) would take over Lawson Inc (2651 JP). The stock immediately headed to limit up. 
  • Post-Close, details emerged. KDDI will buy the 50% that MitCorp does not own, this will become a 50/50 JV. TOB launch at ¥10,360 will be in April. Squeezeout in September.
  • This appears to be the Next Step in Lawson’s Big Boots Adventure. The premium is too light. The price is too low. And that is not counting the synergies.

Lawson (2651 JP): KDDI Corp (9433 JP) Pre-Conditional Tender Offer at JPY10,360

By Arun George

  • Lawson Inc (2651 JP) has recommended a pre-conditional tender offer from KDDI Corp (9433 JP) at JPY10,360 per share, an 18.8% premium to the undisturbed (5 February). 
  • The pre-conditions relate to regulatory approvals in Japan, China, South Korea, and the EU. The offer is expected to start in April, suggesting no significant issues, particularly with SAMR approval.
  • Based on the irrevocables, the minimum acceptance condition requires a 30.2% minority acceptance rate, achievable as the offer represents an all-time high. 

Oriental Land: A Storm Brewing from Activist Coalition

By Oshadhi Kumarasiri

  • Activist investor, Elliott Management has acquired over a 2% stake in Mitsui Fudosan (8801 JP) and is urging it to sell its 6% stake in Oriental Land (4661 JP).
  • Elliott appears to have identified the path of least resistance, as Mitsui Fudosan had already indicated a willingness to sell its Oriental Land shares last year.
  • If Elliott’s campaign proves successful, it will inadvertently benefit Palliser, which is currently challenging Keisei Electric Railway Co (9009 JP) with a similar proposal.

Shiseido (4911 JP):  This Fallen Angel Is Fixable

By Steve Zhou, CFA

  • Shiseido Company (4911 JP) relies heavily on Japan and China, each making up over one quarter of sales. 
  • The long thesis is simple – I expect improvement in both regions in the near future, and the valuation is very attractive.
  • Blackstone just announced a potential bid for L’Occitane (973 HK), which I have written extensively about.  We could potentially see a pickup in interest in the sector.

Lawson & KDDI: Not Just Because Japanese E-Commerce Is an Omnichannel Model

By Michael Causton

  • KDDI’s agreement with Lawson and Mitsubishi to make a tender offer for the convenience store chain is a game-changer for what has become a slow growth convenience store sector.
  • There are myriad potential synergies across e-commerce, new store types and also the promising new revenue stream of retail media. Lawson may be worth more than KDDI’s offer suggests.
  • And while Lawson may be behind Seven Eleven and Familymart, on some KPIs, like HQ revenues, it is No. 1 and also matches Seven Eleven on same-store sales.

Nissan’s Renault Led Selldown Updates – Lack of Ampere Listing Brings Back the US$4bn Overhang

By Sumeet Singh

  • One year ago we looked at the arrangement between Nissan (7201 JP) and Renault (RNO FP) regarding their relationship, which left Renault with a 28% Nissan stake to be sold.
  • Since then, Renault has undertaken one selldown but its recent announcement of Ampere’s listing cancellation once again raises the possibility of a further selldown of Nissan’s stake by Renault.
  • In this note, we talk about the updates since our previous note and the impact of the Ampere listing delay.

KLA & LaserTec, AMD, Hyperscaler Capex, SK Hynix, SWKS and QRVO, WOLF, MCHP

By Douglas O’Laughlin

  • KLA had a rare miss. The guidance was a bit light for the inspection execution machine.
  • KLA rarely misses and is by far the best financially managed of the large-cap semicap companies.
  • KLA reports Q2 EPS $6.16 ex-items vs FactSet $5.91

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Feb 07
0

Daily Brief Quantitative Analysis: KRX Short Interest Weekly (Feb 2nd): Korea Zinc and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • KRX Short Interest Weekly (Feb 2nd): Korea Zinc

KRX Short Interest Weekly (Feb 2nd): Korea Zinc

By Ke Yan, CFA, FRM

  • We analyzed the changes in short interest of KRX Stocks as of Feb 2nd which has an aggregated short interest worth USD7.9bn.
  • We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases & decreases in short value, short as multiple of ADT.
  • We have highlighted short interest weekly changes in Korea Zinc.

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Feb 07
0

Daily Brief Technical Analysis: Monitoring Rising Treasury Yields & U.S. Dollar (DXY); What Would Lead Us to Get Cautious? and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • Monitoring Rising Treasury Yields & U.S. Dollar (DXY); What Would Lead Us to Get Cautious?

Monitoring Rising Treasury Yields & U.S. Dollar (DXY); What Would Lead Us to Get Cautious?

By Joe Jasper

  • More restrictive Fed policy than expected is disproportionately hitting small/mid-caps which are more sensitive to higher interest rates. This suggests we could see further consolidation for small- and mid-caps.
  • Large-Caps (SPX, Nasdaq 100, DJI) remain bullish on continued strength from mega-caps (AMZN, META, NVDA,MSFT). Our bullish outlook remains appropriate, but we discuss what would lead us to get cautious.
  • 1-, 2-, and 10-year Treasury yields testing resistance today and failing. U.S. dollar (DXY) also testing key resistance at $104.60. We also push back on the bad breadth argument (again).

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Feb 07
0

Daily Brief ECM: Kayou Pre-IPO Tearsheet and more

By | Daily Briefs, ECM

In today’s briefing:

  • Kayou Pre-IPO Tearsheet
  • Samhyun IPO Valuation Analysis
  • Pre-IPO Xiaocaiyuan International Holding – A “Dark Horse” In Mass Chinese Cuisine Market

Kayou Pre-IPO Tearsheet

By Ethan Aw

  • Kayou (000KAYOU CH) is looking to raise up to US$500m in its upcoming HK IPO. The deal will be run by CICC, Morgan Stanley and JP Morgan.
  • Kayou is a Chinese pan-entertainment product retailer of toys, with trading cards in particular as its core product. 
  • As of 9M23 (30th Sep 23), it had an IP matrix of 44 IPs through licensing from IP partners and the development of proprietary IPs. 

Samhyun IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation of Samhyun is target price of 28,106 won, which is 25% higher than the mid-point of the IPO price range (22,500 won).
  • Given the moderate upside, we have a Positive view of Samhyun IPO. Our base case valuation is based on P/E of 34.6x net profit of 8.6 billion won in 2023.
  • Samhyun developed one of the world’s first CVVD (Continuously Variable Valve Duration) technology for automobile engines, which improves fuel efficiency by controlling the engine’s valve opening time.

Pre-IPO Xiaocaiyuan International Holding – A “Dark Horse” In Mass Chinese Cuisine Market

By Xinyao (Criss) Wang

  • Based on effective strategic positioning, Xiaocaiyuan is able to seize the market’s demand for cost-effective catering during consumption downgrade and the trend of increasing restaurant chain rate in China.
  • The key for Xiaocaiyuan to generate increasing profits at low spending-per-consumer is due to its strong supply chain, which will be favored by capital especially when Xiaocaiyuan enters community catering.
  • Xiaocaiyuan International Holding (XCY HK) is better than peers. However, due to poor sentiment in HKEX, it’s not sure if Xiaocaiyuan’s valuation/share price performance could outperform peers as well.

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Feb 07
0

Daily Brief Thematic (Sector/Industry): [Blue Lotus Daily – TMT Update]:BABA/CPNG/PDD/700 HK/NTES/3690 HK and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • [Blue Lotus Daily – TMT Update]:BABA/CPNG/PDD/700 HK/NTES/3690 HK
  • [Blue Lotus Daily]:LKNCY/XPEV/LI/NIO/1211 HK/300750 CH
  • Picking a Benchmark
  • Weekly Sustainable Investing Surveyor – Week Ended February 2, 2024

[Blue Lotus Daily – TMT Update]:BABA/CPNG/PDD/700 HK/NTES/3690 HK

By Ying Pan

  • BABA/CPNG/PDD: AliExpress offering 0% commission to sellers of Korean brand products (+/-/-)
  • 700 HK/NTES:NPPA has released the latest approvals for imported games, and Tencent’s highly anticipated <DNF Mobile> has received approval(+)
  • 3690 HK: Meituan changed organizational structure by consolidating In-store and food delivery business(+)

[Blue Lotus Daily]:LKNCY/XPEV/LI/NIO/1211 HK/300750 CH

By Eric Wen

  • LKNCY: Luckin Coffee further raised subsidy to franchisees in winter season(-)
  • XPEV/LI/NIO/1211 HK:Deliveries of new energy vehicles generally continued to pick up in the last three days of January, except for NIO(+/+/-/+)
  • 300750 CH: EVE’s large cylindrical battery in production, increasing the threat to CATL a little bit(-)

Picking a Benchmark

By Investment Talk

  • As I reflected on my performance in 2023, I was reminded that benchmarking can be a brutal process.
  • But it keeps you humble. I don’t spend a lot of time thinking about my chosen benchmark, the S&P 500.
  • I occasionally think as an international investor I should change it.

Weekly Sustainable Investing Surveyor – Week Ended February 2, 2024

By Water Tower Research

  • The WTR Sustainable Index was up by 1.0% W/W versus the S&P 500 Index (up 1.4%), the Russell 2000 Index (down 0.8%), and the Nasdaq Index (up 1.3%).
  • Energy Technology (13.9% of the index) was up by 5.1%, while Industrial Climate and Ag Technology (54.5% of the index) was up 1.1%, ClimateTech Mining was down 5.4%, and Advanced Transportation Solutions was up 0.1%.
  • Top 10 Performers: EVTV, PLUG, JEV, NXT, VIEW, PGTK, LCID, NAAS, ANRG, ELBM

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Feb 07
0

Daily Brief Event-Driven: The Next Step in Lawson’s Big Boots Adventure – KDDI and MitCorp to Take It Private and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • The Next Step in Lawson’s Big Boots Adventure – KDDI and MitCorp to Take It Private
  • Lawson (2651 JP): KDDI Corp (9433 JP) Pre-Conditional Tender Offer at JPY10,360
  • Oriental Land: A Storm Brewing from Activist Coalition
  • L’Occitane (973 HK): Blackstone Pondering an Offer
  • Red 5/Silver Lake: US$1.5bn Aussie Gold Merger
  • NIFTY NEXT50 Index Rebalance Preview: Potential Adds Continue to Run
  • NIFTY100 Low Volatility 30 Index Rebalance Preview: One Change in March
  • L’Occitane (973 HK): Here We Go Again
  • Lawson & KDDI: Not Just Because Japanese E-Commerce Is an Omnichannel Model
  • Novartis Strikes for Possible Myelofibrosis Blockbuster

The Next Step in Lawson’s Big Boots Adventure – KDDI and MitCorp to Take It Private

By Travis Lundy

  • Today, just before the close, the Nikkei sprung a headline saying KDDI Corp (9433 JP) would take over Lawson Inc (2651 JP). The stock immediately headed to limit up. 
  • Post-Close, details emerged. KDDI will buy the 50% that MitCorp does not own, this will become a 50/50 JV. TOB launch at ¥10,360 will be in April. Squeezeout in September.
  • This appears to be the Next Step in Lawson’s Big Boots Adventure. The premium is too light. The price is too low. And that is not counting the synergies.

Lawson (2651 JP): KDDI Corp (9433 JP) Pre-Conditional Tender Offer at JPY10,360

By Arun George

  • Lawson Inc (2651 JP) has recommended a pre-conditional tender offer from KDDI Corp (9433 JP) at JPY10,360 per share, an 18.8% premium to the undisturbed (5 February). 
  • The pre-conditions relate to regulatory approvals in Japan, China, South Korea, and the EU. The offer is expected to start in April, suggesting no significant issues, particularly with SAMR approval.
  • Based on the irrevocables, the minimum acceptance condition requires a 30.2% minority acceptance rate, achievable as the offer represents an all-time high. 

Oriental Land: A Storm Brewing from Activist Coalition

By Oshadhi Kumarasiri

  • Activist investor, Elliott Management has acquired over a 2% stake in Mitsui Fudosan (8801 JP) and is urging it to sell its 6% stake in Oriental Land (4661 JP).
  • Elliott appears to have identified the path of least resistance, as Mitsui Fudosan had already indicated a willingness to sell its Oriental Land shares last year.
  • If Elliott’s campaign proves successful, it will inadvertently benefit Palliser, which is currently challenging Keisei Electric Railway Co (9009 JP) with a similar proposal.

L’Occitane (973 HK): Blackstone Pondering an Offer

By Arun George

  • Bloomberg reports that L’Occitane (973 HK) draws takeover interest from Blackstone (BX US), which is considering partnering with Chairman and largest shareholder Reinold Geiger.
  • Blackstone needs an attractive takeover premium due to the presence of significant disinterested shareholders (Mr. Geiger and Acatis KVG).
  • Shareholders will be wary of the latest rumour due to Mr Geiger’s aborted offer on 4 September 2023. Nevertheless, the valuation is undemanding compared to peer multiples.

Red 5/Silver Lake: US$1.5bn Aussie Gold Merger

By David Blennerhassett

  • Aussie gold miners Red 5 Ltd (RED AU) and Silver Lake Resources (SLR AU) have announced a “merger of equals” via a Scheme of Arrangement.
  • Red is offering 3.434 new shares for every SLR share, and will hold ~51.7% of the merged entity, with SLR shareholders holding the remaining 48.3%.
  • This has the unanimous backing of both boards. Yet SLR appears to be given short shrift on the merger ratio. Plus SLR holds ~11.9% of shares out in Red.

NIFTY NEXT50 Index Rebalance Preview: Potential Adds Continue to Run

By Brian Freitas

  • With the review period for the March rebalance complete, there could be 6 potential changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) using the current index methodology.
  • Estimated one-way turnover is 13.9% resulting in a one-way trade of INR 28.6bn. Four inclusions will have over 1x ADV to buy; five deletions will have 2.5x+ ADV to sell.
  • The potential adds have outperformed the potential deletes by 28.6% over the last month. With positioning from a rebalance perspective mostly done, gradually unwind over the next few weeks.

NIFTY100 Low Volatility 30 Index Rebalance Preview: One Change in March

By Brian Freitas

  • There could be one change for the Nifty100 Low Volatility 30 Index that will be implemented at the close on 28 March.
  • Constituent changes, volatility changes and capping changes will result in one-way turnover of 12.6% and in a one-way trade of INR 3.7bn.
  • While the deletion is fairly certain, there are a few non-constituents around the same level of volatility and price movements over the next few weeks will determine the inclusion.

L’Occitane (973 HK): Here We Go Again

By David Blennerhassett

  • From 2018 onward, French beauty retailer L’Occitane (973 HK) has apparently drawn interest from the likes of Advent International and its controlling shareholder Chairman Reinold Geiger – amongst others. 
  • There is substance to these “Offers” – Geiger confirmed in August 2023 he was contemplating a conditional voluntary general Offer. He holds 72.65% of shares out according to the HKEx. 
  • The latest news, with no definitive source, is that Blackstone is mulling the possibility of teaming up with Geiger on a buyout.

Lawson & KDDI: Not Just Because Japanese E-Commerce Is an Omnichannel Model

By Michael Causton

  • KDDI’s agreement with Lawson and Mitsubishi to make a tender offer for the convenience store chain is a game-changer for what has become a slow growth convenience store sector.
  • There are myriad potential synergies across e-commerce, new store types and also the promising new revenue stream of retail media. Lawson may be worth more than KDDI’s offer suggests.
  • And while Lawson may be behind Seven Eleven and Familymart, on some KPIs, like HQ revenues, it is No. 1 and also matches Seven Eleven on same-store sales.

Novartis Strikes for Possible Myelofibrosis Blockbuster

By Jesus Rodriguez Aguilar

  • Novartis offers an agreed €68/share, 89% premium, for MorphoSys AG (MOR US) in a bet that pelabrisib could become a blockbuster to treat myelofibrosis (possibly reaching peak sales of $1.1-1.5 billion).
  • Considering that the shares of Morphosys were trading in the low teens in November, I believe that shareholders will be happy to part with the shares.
  • Spread (gross/annualised) is 4.65%/18.09% (assuming settlement by 20 May). Novartis believes pelabrisib is definitely worth the risk. Long.

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