Smartkarma Daily Briefs, Author at Smartkarma

Mar 19

Daily Brief Industrials: Halcyon Agri, Toshiba Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Halcyon Agri (HACL SP): Hainan Rubber’s Offer Is Declared Unconditional
Halcyon Agri’s Offer Is Now Unconditional
Last Week in Event SPACE: Japan Post Bank, S.M Entertainment, Toshiba, Link REIT

Halcyon Agri (HACL SP): Hainan Rubber’s Offer Is Declared Unconditional

By Arun George

Halcyon Agri (HACL SP)’s S$0.413 per share MGO from China Hainan Rubber Industry (601118 CH) has met the 50%+ minimum acceptance condition.
The closing date is extended from 24 March to 10 April. The payment settlement is within seven business days of receipt of a valid acceptance.
The offeror currently represents 50.003% of outstanding shares. At the last close, the gross and annualised spread for a 10 April payment is 2.0% and 41.8%, respectively.

Halcyon Agri’s Offer Is Now Unconditional

By David Blennerhassett

China Hainan Rubber Industry (601118 CH)‘s Offer for Halcyon Agri (HACL SP) is now unconditional in all respects.
The closing date has accordingly been extended to the 10 April. It can be further extended.
This transaction is done. And will trade tight to terms.

Last Week in Event SPACE: Japan Post Bank, S.M Entertainment, Toshiba, Link REIT

By David Blennerhassett

Medium-Term, Japan Post Bank (7182 JP) is not in great shape fundamentally compared to others We still know nothing about TOPIX. And we may just not hear.
Kakao Corp (035720 KS) to take control of S.M.Entertainment Co (041510 KS) after HYBE (352820 KS) throws in the towel.
The world is quite volatile now, and funding is probably more precious today than yesterday. But a bid for Toshiba Corp (6502 JP) is too.

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Mar 19

Daily Brief Thematic (Sector/Industry): AMD. Latest Market Share Growth & Outlook and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

AMD. Latest Market Share Growth & Outlook
GEM Weekly (17 Mar 2023): Chinese Macro Data; CATL, ByteDance, Samsung Electronics, Baidu
China Healthcare Weekly (Mar.17) – VBP on ICL/Sports Medicine, New Payment System, Time to Long CXO?
Short Note: LONG China on Monetary Easing Cycle

AMD. Latest Market Share Growth & Outlook

By William Keating

AMD’s overall x86 market share has doubled in the last three years
AMD’s desktop market share rebounded from 13.9% in Q3 2022 to 18.6% in Q4 2022
AMD will likely prioritise server versus client market share in 2023 & 2024, pressing home their clear leadership advantage over Intel in this segment during this timeframe

GEM Weekly (17 Mar 2023): Chinese Macro Data; CATL, ByteDance, Samsung Electronics, Baidu

By Wium Malan, CFA

The Global Emerging Markets weekly provides a summary of the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.
Macro data points: Chinese industrial production, retail sales, and fixed asset investment.
Companies mentioned: CATL (A) (300750 CH), ByteDance (1439927D CH), Samsung Electronics (005930 KS), Baidu (9888 HK)

China Healthcare Weekly (Mar.17) – VBP on ICL/Sports Medicine, New Payment System, Time to Long CXO?

By Xinyao (Criss) Wang

National centralized procurement on ophthalmology and orthopedics would be carried out soon, including ICL and sports medicine. Products in neuro-intervention/neurosurgery/peripheral intervention/IVD reagents would be included in 2023 VBP as well.
After NRDL negotiation/VBP/DRGs policies are fully mature, it is expected to see the emergence of some high-price-oriented payment system for innovative products. Only then will the industry beta really emerge.
If long-term money doesn’t have enough understanding of the trend of long-term interest rates, the expected return and valuation model of healthcare companies can’t be adjusted in time (e.g. CXO).

Short Note: LONG China on Monetary Easing Cycle

By Jacob Cheng

PBoC just announced a RRR cut of 25bps, which is a surprise to market
The cut will lower average RRR from 7.8% to 7.6%, and is expected to release c. 500bn of liquidity. China’s low inflation allows more room for further RRR cuts
Government’s press release addresses key market concerns. We need to monitor recovery in property market. LONG China on easing cycle. China property names are trading at distressed valuation

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Mar 19

Daily Brief Macro: Fed’s Inflation Fight: Upended by Banking System Concerns? and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

Fed’s Inflation Fight: Upended by Banking System Concerns?

Fed’s Inflation Fight: Upended by Banking System Concerns?

By Said Desaque

Potential fragility in the US banking system raises the ante on the Fed to pause increasing its policy rate. Easy money impaired banks’ ability to endure higher funding costs.
Newly available access to the Fed’s balance sheet incurs consequences, including moral hazard, less competition and potentially easier financial conditions when inflation remains elevated.
Markets are discounting that the Fed will ease policy settings to counter banking system events. The Fed faces difficult challenges in trying to quell inflation and preserve financial stability.

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Mar 19

Daily Brief Event-Driven: EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades
Halcyon Agri (HACL SP): Hainan Rubber’s Offer Is Declared Unconditional
Index Rebalance & ETF Flow Recap: STAR50, HSCEI, CSI300, KOSDAQ150, Japan Post Bank
Halcyon Agri’s Offer Is Now Unconditional
Last Week in Event SPACE: Japan Post Bank, S.M Entertainment, Toshiba, Link REIT
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Oishi, AAG, Pushpay, GK Goh, Halcyon Agri, S.M.Entertainment

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades

By Simon Harris

Weekly summary of vol changes and moves across Global Markets
Analysing ATM volatility and skew changes over the last 5 days
We suggest a few trades to take advantage of the implied vol surfaces

Halcyon Agri (HACL SP): Hainan Rubber’s Offer Is Declared Unconditional

By Arun George

Halcyon Agri (HACL SP)’s S$0.413 per share MGO from China Hainan Rubber Industry (601118 CH) has met the 50%+ minimum acceptance condition.
The closing date is extended from 24 March to 10 April. The payment settlement is within seven business days of receipt of a valid acceptance.
The offeror currently represents 50.003% of outstanding shares. At the last close, the gross and annualised spread for a 10 April payment is 2.0% and 41.8%, respectively.

Index Rebalance & ETF Flow Recap: STAR50, HSCEI, CSI300, KOSDAQ150, Japan Post Bank

By Brian Freitas

There were a bunch of rebalances on Friday across Asia resulting in big flows across multiple stocks and countries.
The coming week is quieter with no scheduled rebalances – though the KOSDAQ 150 Index rebalance could take place dependent on Kuk Il Paper Mfg (078130 KS)‘s trading resumption.
Inflows to China and Taiwan ETFs while Korean ETFs had outflows. Market volatility resulted in redemptions from iShares MSCI Emerging Markets (EEM) and IShares MSCI Min Vol Emerging Markets (EEMV).

Halcyon Agri’s Offer Is Now Unconditional

By David Blennerhassett

China Hainan Rubber Industry (601118 CH)‘s Offer for Halcyon Agri (HACL SP) is now unconditional in all respects.
The closing date has accordingly been extended to the 10 April. It can be further extended.
This transaction is done. And will trade tight to terms.

Last Week in Event SPACE: Japan Post Bank, S.M Entertainment, Toshiba, Link REIT

By David Blennerhassett

Medium-Term, Japan Post Bank (7182 JP) is not in great shape fundamentally compared to others We still know nothing about TOPIX. And we may just not hear.
Kakao Corp (035720 KS) to take control of S.M.Entertainment Co (041510 KS) after HYBE (352820 KS) throws in the towel.
The world is quite volatile now, and funding is probably more precious today than yesterday. But a bid for Toshiba Corp (6502 JP) is too.

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Oishi, AAG, Pushpay, GK Goh, Halcyon Agri, S.M.Entertainment

By David Blennerhassett

There are 42 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
One new deal was discussed on Smartkarma this past week: Thai Beverage (THBEV SP)‘s delisting Offer for Oishi Group PCL (OISHI TB).
Key updates took place for AAG Energy Holdings (2686 HK), Pushpay Holdings (PPH NZ), GK Goh Holdings (GKG SP), Halcyon Agri (HACL SP), and S.M.Entertainment Co (041510 KS).

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Mar 19

Daily Brief Equity Bottom-Up: Xpeng – Bold Intentions on Costs and Sales System Provide Some Silver Linings and more

By Smartkarma Daily Briefs | Daily Briefs, Equity Bottom-Up

In today’s briefing:

Xpeng – Bold Intentions on Costs and Sales System Provide Some Silver Linings

Xpeng – Bold Intentions on Costs and Sales System Provide Some Silver Linings

By Victoria Li

25% reduction on hardware cost of car production in one year would be remarkable if achieved
Integrating two sales systems into one is a positive move, but not good enough in our view.
Mr. He taking direct resposibility of styling design division is a sign that the company acknowledges that it is a key improvement area for estabilishing brand image

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Mar 19

Most Read: China Shenhua Energy Co H, Douzone Bizon, Harvey Norman Holdings, Harmony Gold Mining Co Ltd, Sayona Mining, HomeCo Daily Needs REIT, Kuk Il Paper Mfg, China Merchants Energy A, 3P Learning, Hong Kong Hang Seng Index and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

HSCEI Index Rebalance Preview: China Shenhua (1088) Could Replace Country Garden (2007); Div Impact
Index Rebalance & ETF Flow Recap: MSCI China, S&P/ASX, KOSDAQ150, KOSPI, CPSE/Bharat22, YES, OZL
MVIS Australia Equal Weight Index Rebalance: One Deletion & Other Changes
MVIS Global Junior Gold Miners Index Rebalance: Three Deletions & Float Changes
MVIS Global Rare Earth/Strategic Metals Index Rebalance: Float & Capping Changes on Friday
MVIS Australia A-REITs Index Rebalance: Float/Capping Changes
KOSDAQ150 Ad Hoc Index Rebalance: Lake Materials (281740) To Replace Kuk Il Paper (078130)
CSI300 Index Rebalance Preview: Narrowing the Gap
3P Learning (3PL): Rare Listed EdTech, Offering Exposure to the Growth in Digital Instruction
EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades

HSCEI Index Rebalance Preview: China Shenhua (1088) Could Replace Country Garden (2007); Div Impact

By Brian Freitas

China Shenhua Energy Co H (1088 HK) could replace Country Garden Holdings Co (2007 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the June rebalance.
Short interest on China Shenhua Energy Co H (1088 HK) is pretty small while the short interest on Country Garden Holdings Co (2007 HK) is large and possibly getting bigger.
The change could result in a big increase in the fair value for the HSCEI 2023 dividend futures. Currently, we estimate an increase of up to 9 DIPS.

Index Rebalance & ETF Flow Recap: MSCI China, S&P/ASX, KOSDAQ150, KOSPI, CPSE/Bharat22, YES, OZL

By Brian Freitas

Some KOSPI indices rebalanced at the close on Thursday while the Hang Seng family of indices and the SSE STAR50 (STAR50 INDEX) rebalanced at the close on Friday.
The S&P/ASX family, MVIS family and a bunch of other indices will rebalance at the close on coming Friday.
After seeing big inflows over the last couple of years, outflows from Samsung KODEX Secondary Battery ETF (305720) and Mirae Asset TIGER Secondary Cell ETF (305540) have started to pick up.

MVIS Australia Equal Weight Index Rebalance: One Deletion & Other Changes

By Brian Freitas

Harvey Norman Holdings (HVN AU) will be deleted from the MVIS Australia Equal Weight Index at the close of trading on 17 March.
One way turnover is 3.9% resulting in a one-way trade of A$68m. Only Harvey Norman Holdings (HVN AU) has more than 1 day of ADV to sell from passive trackers.
Harvey Norman Holdings (HVN AU) has underperformed Myer Holdings (MYR AU) significantly over the recent past and the index deletion could provide an entry point into a trade.

MVIS Global Junior Gold Miners Index Rebalance: Three Deletions & Float Changes

By Brian Freitas

Dacian Gold Ltd (DCN AU), Gold Resource (GORO US) and Wallbridge Mining Co (WM CN) will be deleted from the index at the close on 17 March.
One way turnover is estimated at 2.8% resulting in a one-way trade of US$96m. There is over 1 day of ADV to trade on 22 stocks.
The largest inflows are on Triple Flag Precious Metals (TFPM US), Osisko Gold Royalties, Zhaojin Mining Industry, New Found Gold (NFG CN), Yamana Gold, IAMGOLD and First Majestic Silver.

MVIS Global Rare Earth/Strategic Metals Index Rebalance: Float & Capping Changes on Friday

By Brian Freitas

There are no constituent changes for the MVIS Global Rare Earth/Strategic Metals Index at the March rebalance. There are free float and capping changes though.
One way turnover is estimated at 3.1% and will result in a one-way trade of US$19m. Flows are relatively small with no impact over 1x ADV on any stock.
The June rebalance should have constituent changes with an increase in the number of stocks in the index universe.

MVIS Australia A-REITs Index Rebalance: Float/Capping Changes

By Brian Freitas

The upcoming rebalance of the MVIS Australia A-REIT Index will be implemented at the close on 17 March. There are no constituent changes, but there are float and capping changes.
Estimated one-way turnover at the rebalance is 1.8% resulting in a one-way trade of A$11.1m. There is limited impact on the index constituents.
The largest inflows are on Stockland, HomeCo Daily Needs REIT, Gpt Group and Charter Hall, while the largest outflows are on Goodman Group, Vicinity Centres, Dexus Property and Scentre Group.

KOSDAQ150 Ad Hoc Index Rebalance: Lake Materials (281740) To Replace Kuk Il Paper (078130)

By Brian Freitas

Following Kuk Il Paper Mfg (078130 KS)‘s designation as an Administrative Issue, the stock will be deleted from the KOSDAQ 150 Index and replaced with Lake Materials (281740 KS).
The timing of the index change is currently uncertain but will be implemented latest by the close of trading on 6 April.
Lake Materials (281740 KS) was up today and is nearing its highs. There could be another leg higher on the inclusion but we’d be wary of chasing the stock higher.

CSI300 Index Rebalance Preview: Narrowing the Gap

By Brian Freitas

Over 85% of the way through the review period, we see 14 potential index changes at the June rebalance that will be implemented at the close on 9 June.
We estimate a one-way turnover of 2.28% at the June rebalance leading to a one-way trade of CNY 5.95bn.
The potential adds have outperformed the CSI 300 Index over the last two months but have underperformed the potential deletes. The gap has been narrowing recently.

3P Learning (3PL): Rare Listed EdTech, Offering Exposure to the Growth in Digital Instruction

By Anik Siwach

Addition of Writing Legends to existing maths and literacy apps will create more opportunities to upsell and cross-sell.
Brightpath, the recently acquired assessments technology provider, adds a new horizontal with the potential to reduce school customer churn
Competition is high from groups such as DreamBox, IXL, ABC Mouse, Khan Academy and BYJU’S . 3P Learning remains a significant player with a strong customer base and improving product portfolio.

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades

By Simon Harris

Weekly summary of vol changes and moves across Global Markets
Analysing ATM volatility and skew changes over the last 5 days
We suggest a few trades to take advantage of the implied vol surfaces

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Mar 18

Daily Brief Singapore: Suntec REIT and more

By Smartkarma Daily Briefs | Daily Briefs, Singapore

In today’s briefing:

S-REITs: Investing In An Inflationary Environment

S-REITs: Investing In An Inflationary Environment

By David Blennerhassett

For the better part of two decades, Singaporean real estate investment trusts (REITs) have provided an efficient and popular exposure to quality large-scale commercial properties.
Yet as global central banks hike interest rates to address inflationary pressures, can REITs retain their attractiveness?
SREITs have corrected as Singaporean interest rates have increased. The question is whether higher interest rates are baked in, and which SREITs will hold up; and which ones will not?

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Mar 18

Daily Brief Australia: 3P Learning and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

3P Learning (3PL): Rare Listed EdTech, Offering Exposure to the Growth in Digital Instruction

3P Learning (3PL): Rare Listed EdTech, Offering Exposure to the Growth in Digital Instruction

By Anik Siwach

Addition of Writing Legends to existing maths and literacy apps will create more opportunities to upsell and cross-sell.
Brightpath, the recently acquired assessments technology provider, adds a new horizontal with the potential to reduce school customer churn
Competition is high from groups such as DreamBox, IXL, ABC Mouse, Khan Academy and BYJU’S . 3P Learning remains a significant player with a strong customer base and improving product portfolio.

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Mar 18

Daily Brief Indonesia: Vedanta Resources, ABM Investama and more

By Smartkarma Daily Briefs | Daily Briefs, Indonesia

In today’s briefing:

Weekly Wrap – 17 Mar 2023
Asia HY Trade Book – March 2023 – Lucror Analytics

Weekly Wrap – 17 Mar 2023

By Charles Macgregor

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

and more…

Asia HY Trade Book – March 2023 – Lucror Analytics

By Charles Macgregor

The Asia HY Trade Book for March 2023 includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative-value charts and lists of the bonds across Asia (ex-Japan) HY and crossover credits.

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Mar 18

Daily Brief United States: iShares MSCI ACWI ETF, Realty Income, United Rentals and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Global Pullback Continues; Focus on Defensives: Buys in Staples, Utilities, Precious Metals Miners
Realty Income Corporation: Diminishing Risk-Adjusted Returns
United Rentals: This Capital Intensive Business Deserves Attention

Global Pullback Continues; Focus on Defensives: Buys in Staples, Utilities, Precious Metals Miners

By Joe Jasper

On March 2 we discussed how the pullback in global equities was in full swing as Europe/UK indexes displayed 4.5-month uptrend breaks, joining the pullback in the MSCI ACWI.
At the time, we expected this pullback in the MSCI ACWI (ACWI-US) to move down to $86-87 at minimum, and potentially $84 (December 2022 low) or $75-77 (the 2022 lows).
ACWI-US broke below $86 and is approaching $84. $84 will be an important support level to monitor, but if it breaks, the $75-77 level is still firmly in the cards.

Realty Income Corporation: Diminishing Risk-Adjusted Returns

By Pearl Gray Equity and Research

Realty Income Corporation’s sustainable growth rate has stalled, resulting in an intrinsic value below its traded market price.
Realty Income’s market-based features, including dividend growth and low volatility, are favorable.
However, we think the REITs valuation is a significant risk.

United Rentals: This Capital Intensive Business Deserves Attention

By Vladimir Dimitrov, CFA

The leader in rental equipment industry offers attractive returns, in spite of short-term risk of recession.
United Rentals’ well thought out growth strategy has created an important competitive advantage.
High free cash flow allows the management to increase shareholder distributions, while also reinvesting back into the business, according to the company.

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