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Smartkarma Daily Briefs

Daily Brief Macro: The Great Game: What to Make of the Iran-Saudi Deal and Ukraine Holding on to Bakhmut and more

By | Daily Briefs, Macro

In today’s briefing:

  • The Great Game: What to Make of the Iran-Saudi Deal and Ukraine Holding on to Bakhmut
  • CX Daily: Regulators Tighten Grip on China’s $2.9 Trillion Private Fund Industry
  • Weekly Market Monitor (10) – Central Banks Intervene to Fight Contagion Risks
  • EA: HICP Resilience Confirmed in Feb-23
  • TPW Advisory Friday Musings: March – In Like A Lion, Out Like A Lamb?

The Great Game: What to Make of the Iran-Saudi Deal and Ukraine Holding on to Bakhmut

By Mikkel Rosenvold

  • Iran and Saudi Arabia are buddying up with the help of China
  • Ukrainian is incredibly holding out while Bakhmut is being surrounded
  • What to make of all this? Read your weekly geopolitical overview

CX Daily: Regulators Tighten Grip on China’s $2.9 Trillion Private Fund Industry

By Caixin Global

  • Funds / Regulators tighten grip on China’s $2.9 trillion private fund industry

  • Fugitive / Fugitive billionaire Guo Wengui arrested in New York

  • Yuan / HKEX applies to launch yuan counter for Hong Kong-listed shares


Weekly Market Monitor (10) – Central Banks Intervene to Fight Contagion Risks

By Jeroen Blokland

  • A concise overview of the latest developments in the unfolding banking crisis and the surprise central bank intervention following them.
  • Three key reasons equities markets did not collapse: 1) LIQUIDITY, 2) ECB, 3) The Outlier Narrative.
  • Other Macro data not to be overlooked and our Fear & Frenzy Sentiment Index moved away(!) from Fear this week.

EA: HICP Resilience Confirmed in Feb-23

By Phil Rush

  • The final EA HICP inflation print confirmed a slight slowing to 8.5% in Feb-23. The ex-tobacco rate hit 8.61%, only 2bps above our forecast amid marginal news in the details.
  • Resilience was also confirmed in the core measures, which do not appear to be converging towards target-consistent rates. Excesses haven’t broken yet.
  • March may undershoot the consensus amid less seasonal space to rebound from January, but we see inflation trending above the ECB’s forecast, encouraging more rate hikes.

TPW Advisory Friday Musings: March – In Like A Lion, Out Like A Lamb?

By TPW Advisory

  • Recent market action is just like the weather outside, which brings to mind the old proverb in the title.
  • Research indicates the origin of the proverb goes back to astronomy and how Leo, the Lion constellation, rises in the East early this month while Aries, the Lamb constellation, sets in the West towards the end of the month. 
  • It was adapted for agricultural purposes to describe March’s transitional weather back in the 1700s with the first noted reference in 1732, almost 300 years ago.

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Daily Brief Energy/Materials: Vedanta Resources, ABM Investama, Glencore PLC, Pan African Resources and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • Weekly Wrap – 17 Mar 2023
  • Asia HY Trade Book – March 2023 – Lucror Analytics
  • African Rainbow Minerals: Maintaining Our Outlook
  • Pan African Resources – Innovative funding avoids dilution

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:

  1. China Jinmao Holdings
  2. Lifestyle International Holdings
  3. Geely Auto
  4. First Pacific Co
  5. Tata Motors Ltd

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.


African Rainbow Minerals: Maintaining Our Outlook

By Pearl Gray Equity and Research

  • African Rainbow Minerals Limited’s near 30% year-to-date drawdown has presented a value gap.
  • The company’s security’s undervalued status, coupled with a dividend yield of above 15%, present us with optimism.
  • We assign a strong buy rating to African Rainbow minerals Limited with an indefinite horizon.

Pan African Resources – Innovative funding avoids dilution

By Edison Investment Research

On 13 March, Pan African Resources (PAF) announced the completion of the final component in its funding package for its Mintails dump retreatment project outside Johannesburg. The funding is in the form of an innovative transaction with Rand Merchant Bank (RMB) in the style of a synthetic forward sale agreement, whereby Pan African will sell 4,846oz of gold per month to RMB for 24 months, commencing in March at a fixed price of ZAR1,025,000/kg (US$1,750/oz at the prevailing forex rate), in return for an upfront premium of ZAR400m (US$22.0m). Including the upfront premium, the effective price at which the group will sell these ounces (representing c 30% of annual group production) will be ZAR1,135,604/kg (US$1,938/oz at prevailing rates) over the full 24-month period.


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Daily Brief Industrials: United Rentals and more

By | Daily Briefs, Industrials

In today’s briefing:

  • United Rentals: This Capital Intensive Business Deserves Attention

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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Daily Brief Industrials: United Rentals and more

By | Daily Briefs, Industrials

In today’s briefing:

  • United Rentals: This Capital Intensive Business Deserves Attention

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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Daily Brief Consumer: Pinduoduo, 3P Learning, Mediaset España Comunicación, S.A., RPSG Ventures Limited, iShares MSCI ACWI ETF, Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Pinduoduo: Trading off Between Top-Line Growth and Bottom-Line Slowdown
  • 3P Learning (3PL): Rare Listed EdTech, Offering Exposure to the Growth in Digital Instruction
  • MFE/​Mediaset España: Merger Approval, Spread and Delisting
  • RPSG Ventures: FMCG Business Continues to Scale Up | Outsourcing Business Is Seeing Weak Demand
  • Global Pullback Continues; Focus on Defensives: Buys in Staples, Utilities, Precious Metals Miners
  • Sustainability Reporting Is Expected to Share Valuable Information, Not PR Magazine Type Information

Pinduoduo: Trading off Between Top-Line Growth and Bottom-Line Slowdown

By Eric Chen

  • PDD stock price has been increasingly driven by TEMU as of late, thanks to TEMU’s fast growth and aggressive geographical expansion.
  • TEMU rollout introduces more variables to upcoming 4Q results , especially with regard to incremental investments that pose downside risks to earnings, which will sharply decelerate in 4Q and beyond.
  • We are turning more constructive on TEMU, but acknowledge the challenges in trading off between topline growth and bottom line deceleration in a potentially prolonged tightening cycle. Stay neutral.

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.

MFE/​Mediaset España: Merger Approval, Spread and Delisting

By Jesus Rodriguez Aguilar

  • TL5 holdouts have exposed themselves to being trapped by MFE, which has already shown in the past that it has no qualms about running its subsidiary for its own interests.
  • The implied exchange values the audiovisual business of TL% at 1.2 EV/22eEBITDA TL5/MFEA spread is +3.02%, I would wait for it to turn negative to open a position.
  • MFE A shares are trading at a 34.7% discount, which seems excessive nevertheless. With more A shares coming in the market (and higher liquidity), I would be long MFEA/short MFEB.

RPSG Ventures: FMCG Business Continues to Scale Up | Outsourcing Business Is Seeing Weak Demand

By Ankit Agrawal, CFA

  • RPSG Ventures Limited (RPSGVENT IN) [“RPSGV”] continues to scale up its FMCG business. Q3FY23 FMCG revenues saw a YoY growth of 23%. QoQ, there was some de-growth due to seasonality.
  • Excluding one-off other income, Firstsource Solutions (FSOL IN) reported weak Q3FY23 earnings led by sluggish growth and weak margins.
  • RPSGV remains a deep-value holding company that is trading at a discount of >85%. As its FMCG and Sports businesses scale up, the stock has potential to re-rate significantly.

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.

Sustainability Reporting Is Expected to Share Valuable Information, Not PR Magazine Type Information

By Aki Matsumoto

  • Japanese companies are keen on obtaining ISO certifications, so it’s relatively easy for companies that have obtained these certifications to ensure the comprehensiveness of sustainability information by disclosing such information.
  • It’s useful to know the degree to which management recognized the challenges and the leadership that management could exercise in solving those challenges, rather than laundry list of self-praise information.
  • For management to recognize issues and implement initiatives at global level, it’s expected to hire a head who is sensitive to global initiatives and work with him/her to resolve issues.

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Daily Brief Financials: Nikkei 225, Suntec REIT, Mirae Asset TIGER Secondary Cell ETF, Nice Information Service Co, Realty Income and more

By | Daily Briefs, Financials

In today’s briefing:

  • Longs on Next Low
  • S-REITs: Investing In An Inflationary Environment
  • Flow Trading Targeting Cap Reversion in TIGER Battery ETF Rebalancing on April 13
  • Four Companies Likely to Switch Their Listing from KOSDAQ to KOSPI in 2023/2024
  • Realty Income Corporation: Diminishing Risk-Adjusted Returns

Longs on Next Low

By Thomas Schroeder

  • SPX and NKY top short picks near term but new low attempts will see the immediate down leg exhaust. Yield decline is exhausting.
  • Increasing oversold readings set the stage for some key low on weakness. Euro bank range is 92 to 108.
  • Taiwan remains our top long in Asia. Trading bounce lows in ASX, Korea and Europe look attractive/viable.

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?

Flow Trading Targeting Cap Reversion in TIGER Battery ETF Rebalancing on April 13

By Sanghyun Park

  • There seems to be no constituent change this time. However, opportunities from cap reversion are likely to lead to noteworthy passive flows.
  • Ecopro BM and Ecopro Co will experience a weight movement of -4.35% and -3.68%p. On the other hand, SK Innovation will enjoy the most pleasant passive impact.
  • At KODEX Battery’s March rebalancing, the Long SK Innovation Short Ecopro BM position setup provided a return of more than 10% with a similar level of impact x ADTV.

Four Companies Likely to Switch Their Listing from KOSDAQ to KOSPI in 2023/2024

By Douglas Kim

  • In this insight, we discuss four companies that are likely to switch their listing from KOSDAQ to KOSPI in 2023/2024.
  • These four companies include Ecopro BM, Ecopro Co, BH Co, and Nice Information Service.
  • BH Co and Nice Information Service have included the agenda of transfer of the listing from KOSDAQ to KOSPI in their upcoming AGMs this month. 

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.

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Daily Brief Health Care: SanBio Co Ltd, EMIS Group PLC and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • SanBio (4592 JP): Better-Than-Expected Operating Loss in FY23; Product Approval Expected in FY24
  • EMIS Group – More work to do to finalise takeover

SanBio (4592 JP): Better-Than-Expected Operating Loss in FY23; Product Approval Expected in FY24

By Tina Banerjee

  • SanBio Co Ltd (4592 JP) recorded operating loss of ¥7.9B for FY23, better than guidance of ¥8.1B. For FY24, the company guided for operating loss of ¥4.6B, in-line with consensus.
  • SanBio’s cash position improved with cash and cash equivalents of ¥6.7B at the end of FY23, up from ¥4.6B at the end of the previous fiscal year.
  • The company aims to obtain approval of its lead candidate SB623 as a treatment for chronic motor deficit from traumatic brain injury during the current fiscal year.

EMIS Group – More work to do to finalise takeover

By Edison Investment Research

The Competition and Markets Authority (CMA) has finished its Phase 1 investigation and has concluded that it has concerns that the UnitedHealth takeover of EMIS could reduce competition in certain areas. It has given both parties five working days to offer legally binding proposals in lieu of a Phase 2 investigation. EMIS expects to be able to provide a further update on or around 31 March, which is the statutory deadline for the CMA to determine whether these undertakings are acceptable in principle.


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Most Read: Japan Post Bank, China Shenhua Energy Co H, Douzone Bizon, China Merchants Energy A, LG Corp, Trial Holdings, Nikkei 225, Suntec REIT, Mirae Asset TIGER Secondary Cell ETF and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Japan Post Bank (7182) – The Flow Calendar
  • 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
  • CSI300 Index Rebalance Preview: Narrowing the Gap
  • An Increasing Probability of LG Corp Preferred Shares Cancellation
  • Trial Holdings IPO: Valuation Insights
  • Longs on Next Low
  • S-REITs: Investing In An Inflationary Environment
  • Good Morning Japan |VICTORY Declared as Bailouts Rule; NUGGET: ORIX-Riding the Zero-Carbon MegaTrend
  • Flow Trading Targeting Cap Reversion in TIGER Battery ETF Rebalancing on April 13

Japan Post Bank (7182) – The Flow Calendar

By Travis Lundy

  • The near-term Supply/Demand Balance is helped or hurt – depending on how well the deal has been placed to retail, by overseas bank turmoil. 
  • Quality of placement to retail is tough to know from outside. We have near-term offsets with both index demand and dividend looming.
  • The biggest near-term differentiator in possible supply/demand outcomes is, of course, in the hands of the TSE Index team. And we just don’t know.

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

By Brian Freitas


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

By Brian Freitas


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.

An Increasing Probability of LG Corp Preferred Shares Cancellation

By Douglas Kim

  • In this insight, we discuss an increasing probability of the cancellation of LG Corp preferred shares.
  • We provide five major reasons as to why LG Corp should cancel its entire preferred shares and how this could have a positive impact on LG Corp’s share price. 
  • We believe a 5-10% buyback and cancellation of LG Corp’s preferred shares in the next 1-2 years is a higher probability.

Trial Holdings IPO: Valuation Insights

By Arun George


Longs on Next Low

By Thomas Schroeder

  • SPX and NKY top short picks near term but new low attempts will see the immediate down leg exhaust. Yield decline is exhausting.
  • Increasing oversold readings set the stage for some key low on weakness. Euro bank range is 92 to 108.
  • Taiwan remains our top long in Asia. Trading bounce lows in ASX, Korea and Europe look attractive/viable.

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?

Good Morning Japan |VICTORY Declared as Bailouts Rule; NUGGET: ORIX-Riding the Zero-Carbon MegaTrend

By Mark Chadwick

  • OVERSEAS. Crisis Over !Bailouts from US to Europe, Stocks rally as Contagion fears wane; Major Banks rescue First Republic Bank; Swiss Central Bank protects Credit Suisse; ECB raises by 50bps
  • JAPAN. NKY Futs flat vs Cash; USDJPY 133.8; Expect Japan Equities to start the road to recovery with macro fears subsiding;  Japan-Korea move fwd on trade/security.
  • NUGGET. Orix – one of the Biggest Renewables Plays in Japan. Riding the Decarbonization MegaTrend

Flow Trading Targeting Cap Reversion in TIGER Battery ETF Rebalancing on April 13

By Sanghyun Park

  • There seems to be no constituent change this time. However, opportunities from cap reversion are likely to lead to noteworthy passive flows.
  • Ecopro BM and Ecopro Co will experience a weight movement of -4.35% and -3.68%p. On the other hand, SK Innovation will enjoy the most pleasant passive impact.
  • At KODEX Battery’s March rebalancing, the Long SK Innovation Short Ecopro BM position setup provided a return of more than 10% with a similar level of impact x ADTV.

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Daily Brief India: Blue Jet Healthcare Ltd, Vedanta Resources and more

By | Daily Briefs, India

In today’s briefing:

  • Blue Jet Healthcare Pre-IPO – Marquee Clients but Inconsistent Growth and Margins
  • Morning Views Asia: Vedanta Resources

Blue Jet Healthcare Pre-IPO – Marquee Clients but Inconsistent Growth and Margins

By Sumeet Singh

  • Blue Jet Healthcare Ltd (BJHC IN)  is looking to raise about US$300m in its upcoming India IPO.
  • Blue Jet Healthcare (BJH) is a specialty pharmaceutical and healthcare ingredient and intermediate company, offering niche products targeted toward innovator pharmaceutical companies and multinational generic pharmaceutical companies. 
  • In this note, we look at the company’s past performance.

Morning Views Asia: Vedanta Resources

By Charles Macgregor

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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Daily Brief Australia: Kelsian Group and more

By | Australia, Daily Briefs

In today’s briefing:

  • Kelsian Group Placement – Yet Another Acquisition to Add to Its Arsenal

Kelsian Group Placement – Yet Another Acquisition to Add to Its Arsenal

By Ethan Aw

  • Kelsian Group (KLS AU) aims to raise around US$90m (A$135m) via an institutional placement. Together with the placement, the company will also undertake a US$95m (A$143m) non-renounceable entitlement offer. 
  • The issuance of new shares will be a large one for the firm to digest, representing 150.6 days of three month ADV and 20.3% of current mcap. 
  • In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

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