Smartkarma Daily Briefs

Extending bookbuilding period to seven days (and test-the-waters) is unlikely to make any real difference. Leaving the financial capacity check to underwriters will likely cause sharp confusion in the market.
The purpose of penalizing so-called hot money, like flippers and non-pricing institutions, is understandable. However, whether FSC has fully considered the side effects caused by uniformly applying this is questionable.
Expanding the allowable price range on a listing day is the most crucial point we should pay attention to, and we must design a post-IPO trading strategy accordingly.

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Dec 19

Daily Brief Event-Driven: Yuanta/P-Shares Taiwan Dividend Plus ETF: Day 1 Flows & Performance and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Yuanta/P-Shares Taiwan Dividend Plus ETF: Day 1 Flows & Performance
MSCI Korea: An Early Assessment of February Index Review
Merger Arb Mondays (19 Dec) – Toyo, Genesis/St Barbara, Norwest, Nitro, Tyro, Elmo, Yashili, O2Micro
KOSPI Size Index: Early Preview at One Fourth into Screening Period
Weekly Deals Digest (18 Dec) – Acotec, Yashili, Toshiba, Toyo, Genesis, Norwest, O2Micro, VinFast

Yuanta/P-Shares Taiwan Dividend Plus ETF: Day 1 Flows & Performance

The Yuanta/P-shares Dividend Plus ETF (0056 TT) started to rebalance its holdings on Friday and will continue to do so for the next 4 trading days.
Stocks with buy flows dropped 1.82% on average on Friday while the stocks with sell flows rose 1.03%. On a flow weighted basis, the numbers were -2.01% vs +1.09%.
Given the large volumes at auction and the large moves on stocks, we cannot rule out the possibility that a lot of pre-positions were unwound at the close on Friday.

MSCI Korea: An Early Assessment of February Index Review

MSCI’s quarterly comprehensive index review begins with the February review. QIR disappears, and all quarters are subject to the SAIR rules.
Currently, no constituents face deletion risk. On the other hand, we have three potential additions: Hanwha Aerospace (012450 KS), Meritz Financial Group (138040 KS), and Kakao Pay (377300 KS).
Meritz Financial will likely take Meritz Fire’s place through a Continuation. Kakao’s chances have increased significantly due to the recent price rise and the comprehensive index review.

Merger Arb Mondays (19 Dec) – Toyo, Genesis/St Barbara, Norwest, Nitro, Tyro, Elmo, Yashili, O2Micro

We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads – 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), Genex Power Ltd (GNX AU), Golden Energy & Resources (GER SP), Origin Energy (ORG AU).
Lowest spreads Warrego Energy (WGO AU), Nitro Software Ltd (NTO AU), Chip Eng Seng Corp (CHIP SP), Uzabase Inc (3966 JP), Norwest Energy Nl (NWE AU), Elmo Software (ELO AU).

KOSPI Size Index: Early Preview at One Fourth into Screening Period

To MID migrants: Amorepacific Group (002790 KS), E Mart (139480 KS), Iljin Materials (020150 KS), Hanjin KAL (180640 KS), OCI (010060 KS), LX Semicon (108320 KS), and SOCAR (403550 KS)
To LARGE migrants: Hyundai Rotem (064350 KS), Hotel Shilla (008770 KS), GS Retail (007070 KS), CS Wind (112610 KS), and Posco International (047050 KS)
This time, the degree of predictability is high as the MC gap widened from an early point. So, we should consider building our position in phases from early next month.

Weekly Deals Digest (18 Dec) – Acotec, Yashili, Toshiba, Toyo, Genesis, Norwest, O2Micro, VinFast

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments – VinFast (1905332D VN) pre-markets a US$1bn IPO and Weilong Delicious Global (9985 HK) has a poor debut.
Event-Driven developments – Genesis Minerals (GMD AU)/St Barbara Ltd (SBM AU), Norwest Energy Nl (NWE AU), Acotec Scientific Holdings (6669 HK), Toshiba Corp (6502 JP), Toyo Construction (1890 JP), O2Micro.

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Dec 19

Daily Brief Credit: Elon Sold More Falling Tesla Stock. Margin Calls? Twitter Failing? Bank Demands? Likely All Three. and more

By Smartkarma Daily Briefs | Credit, Daily Briefs

In today’s briefing:

Elon Sold More Falling Tesla Stock. Margin Calls? Twitter Failing? Bank Demands? Likely All Three.
Morning Views Asia: Central China Securities

Elon Sold More Falling Tesla Stock. Margin Calls? Twitter Failing? Bank Demands? Likely All Three.

By Vicki Bryan

Elon Musk sold billions more of Tesla near 2-yr lows, signaling he & Twitter need serious cash NOW.
His banks know why—they hold Elon’s margin loans and they get Twitter’s financial info every month.
And the banks want Elon to buy back from them Twitter’s riskiest LBO debt, which they can’t sell because of how fast he is destroying Twitter’s business and prospects.

Morning Views Asia: Central China Securities

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.

Central China Securities

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Dec 19

Daily Brief Macro: Emerging Markets Could Outperform in 2023? and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

Emerging Markets Could Outperform in 2023?
Potential Economic and Financial Market Downside Risks in 2023
Wall Street Is Fighting the Fed, Should You Join In?
Singapore Mulls Dumping 20% Stake in CK Hutchison’s Port Business

Emerging Markets Could Outperform in 2023?

By Michael J. Howell

EM Liquidity remains low but again pushed higher in November and looks set to rebound strongly in 2023, helped easier Chinese monetary conditions
World economy skidding badly and probably already in recession. EM investor positioning data already discounts much of this drop. Capital outflows becoming far less negative.
Weaker US dollar likely to add support to EM, gold and commodities in 2023. Many commodity-rich EMs look attractive.

Potential Economic and Financial Market Downside Risks in 2023

By Said Desaque

Chair Powell is not expecting a rapid decline in broad-based core inflationary pressures in 2023, thereby making it impossible to contemplate cutting the policy rate next year.
The bulk of risks for 2023 are skewed to the downside due to potentially more deeply-entrenched inflationary pressures and continued geopolitical fallout impacting energy prices.
Asia Pacific countries reliant on external demand will be impacted by downside outcomes in the US and Europe, while net importers of food and energy will face domestic demand pressures.

Wall Street Is Fighting the Fed, Should You Join In?

By Cam Hui

Despite evidence of a hawkish Fed outlook, the market has chosen to fight the Fed by loosening financial conditions. Should investors join in to fight the Fed?
In the face of a hawkish Fed, it pays to be more cautious and maintain a balanced view of risk and return.
Investors seeking exposure to U.S. equities will find better value in mid- and small-cap stocks.

Singapore Mulls Dumping 20% Stake in CK Hutchison’s Port Business

By Caixin Global

Singapore state-controlled port operator PSA International is considering selling its 20% stake in the port business of Hong Kong conglomerate CK Hutchison Holdings Ltd., according to people close to PSA’s controlling shareholder Temasek Holdings.
PSA is reviewing its portfolio against the backdrop of geopolitical change and declining global trade demand, the sources said.
The port operator bought its 20% CK Hutchison stake in 2006 for $4.4 billion.

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Dec 19

Most Read: DMCI Holdings, Haidilao, Toshiba Corp, Highwealth Construction, Alibaba (ADR), Kanzhun, Kakao Pay, Toyo Construction, E Mart Inc and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

PCOMP Index Rebalance Preview Feb 23: Higher Free Float Means Fewer Changes
Index Rebalance & ETF Flow Recap: S&P/ASX, HSCEI, HSTECH, Haidilao/Super Hi, CSI REIT
Last Week in Event SPACE: NTT Data, Origin Energy, Toyo Construction, Haidilao, Toshiba
Yuanta/P-Shares Taiwan Dividend Plus ETF: Day 1 Flows & Performance
ECM Weekly (18th Dec 2022) – China ADRs, Skymark, Daiei, Weilong, KFintech, Sula, Endeavour, Adani
Good Morning Japan |Argentina and Messi Triumph! Recession Fears Persist – No Break for Equities
Kanzhun (BZ US/ 2076 HK): Dual Primary Listing & Potential HSTECH Inclusion
MSCI Korea: An Early Assessment of February Index Review
Merger Arb Mondays (19 Dec) – Toyo, Genesis/St Barbara, Norwest, Nitro, Tyro, Elmo, Yashili, O2Micro
KOSPI Size Index: Early Preview at One Fourth into Screening Period

PCOMP Index Rebalance Preview Feb 23: Higher Free Float Means Fewer Changes

From December 2022, the minimum free float requirement to be a part of the Philippines Stock Exchange PSEi Index (PCOMP INDEX) increases from 15% to 20%.
We see a high probability of DMCI Holdings (DMC PM) replacing Emperador (EMP PM) in the index at the upcoming rebalance.
There are a few other potential changes to the index and the passive flow on the stocks will be material.

Index Rebalance & ETF Flow Recap: S&P/ASX, HSCEI, HSTECH, Haidilao/Super Hi, CSI REIT

It was a busy Friday with the implementation of the December rebalance for multiple indices. The Yuanta/P-shares Taiwan Dividend Plus ETF will continue to rebalance over the next 4 days.
The coming week should be relatively quiet with the announcement of the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) changes expected.
There were large inflows to ETFs focused on China, Korea, Japan, Taiwan. There were inflows to Hang Seng H Share Index ETF and outflows from Tracker Fund of Hong Kong.

Last Week in Event SPACE: NTT Data, Origin Energy, Toyo Construction, Haidilao, Toshiba

By David Blennerhassett

Stay long NTT Data Corp (9613 JP) through mid-January. Then sell.
Origin Energy (ORG AU) may drift lower as the street crunches numbers, in tandem with a vacuum of news as Brookfield undertakes its due diligence.
Toyo Construction (1890 JP) is now upset that YFO has decided to release the reason why Toyo management didn’t.

Yuanta/P-Shares Taiwan Dividend Plus ETF: Day 1 Flows & Performance

The Yuanta/P-shares Dividend Plus ETF (0056 TT) started to rebalance its holdings on Friday and will continue to do so for the next 4 trading days.
Stocks with buy flows dropped 1.82% on average on Friday while the stocks with sell flows rose 1.03%. On a flow weighted basis, the numbers were -2.01% vs +1.09%.
Given the large volumes at auction and the large moves on stocks, we cannot rule out the possibility that a lot of pre-positions were unwound at the close on Friday.

ECM Weekly (18th Dec 2022) – China ADRs, Skymark, Daiei, Weilong, KFintech, Sula, Endeavour, Adani

By Sumeet Singh

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs
On the IPO front, things are started to cool down in to the year end with some smaller issuers still trying their luck to get listed before the year end.
On placements front, most of the action was in India with Australia seeing a large offering after a while.

Good Morning Japan |Argentina and Messi Triumph! Recession Fears Persist – No Break for Equities

By Mark Chadwick

OVERSEAS: WCUP: Argentina/Messi prevail; SPX -2.1%WoW on recession narrative; SPX option expiry exacerbates moves; Calls for new TESLA CEO; GS to cut 8% of workforce; Covid spreads in China
JAPAN: NKY Futs at -0.9% vs Cash; Defense Bill Approved – no tax hike till 2024; Lawson’s Seijo Ishii IPO postponed; Renesas suspends China ops on Covid; Decarbonization-related investments unabated
DAILY NUGGET: We look a the another attempt of the Japanese government at regional revitalization. Smells of pork barrel spending to us.

Kanzhun (BZ US/ 2076 HK): Dual Primary Listing & Potential HSTECH Inclusion

Kanzhun (BZ US) will Dual Primary list on the HKEX (388 HK) by Way of Introduction and the stock is expected to start trading on 22 December.
Following the changes to the handling of Dual-Primary-listed companies, Kanzhun (BZ US) should be added to the Hang Seng Tech Index (HSTECH INDEX) at the March rebalance.
Kanzhun (BZ US)‘s inclusion will lead to other changes to the Hang Seng Tech Index (HSTECH INDEX) with an extra deletion to keep the number of index constituents at 30.

MSCI Korea: An Early Assessment of February Index Review

MSCI’s quarterly comprehensive index review begins with the February review. QIR disappears, and all quarters are subject to the SAIR rules.
Currently, no constituents face deletion risk. On the other hand, we have three potential additions: Hanwha Aerospace (012450 KS), Meritz Financial Group (138040 KS), and Kakao Pay (377300 KS).
Meritz Financial will likely take Meritz Fire’s place through a Continuation. Kakao’s chances have increased significantly due to the recent price rise and the comprehensive index review.

Merger Arb Mondays (19 Dec) – Toyo, Genesis/St Barbara, Norwest, Nitro, Tyro, Elmo, Yashili, O2Micro

We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads – 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), Genex Power Ltd (GNX AU), Golden Energy & Resources (GER SP), Origin Energy (ORG AU).
Lowest spreads Warrego Energy (WGO AU), Nitro Software Ltd (NTO AU), Chip Eng Seng Corp (CHIP SP), Uzabase Inc (3966 JP), Norwest Energy Nl (NWE AU), Elmo Software (ELO AU).

KOSPI Size Index: Early Preview at One Fourth into Screening Period

To MID migrants: Amorepacific Group (002790 KS), E Mart (139480 KS), Iljin Materials (020150 KS), Hanjin KAL (180640 KS), OCI (010060 KS), LX Semicon (108320 KS), and SOCAR (403550 KS)
To LARGE migrants: Hyundai Rotem (064350 KS), Hotel Shilla (008770 KS), GS Retail (007070 KS), CS Wind (112610 KS), and Posco International (047050 KS)
This time, the degree of predictability is high as the MC gap widened from an early point. So, we should consider building our position in phases from early next month.

Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Dec 19

Daily Brief Industrials: Toyo Construction and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Merger Arb Mondays (19 Dec) – Toyo, Genesis/St Barbara, Norwest, Nitro, Tyro, Elmo, Yashili, O2Micro

Merger Arb Mondays (19 Dec) – Toyo, Genesis/St Barbara, Norwest, Nitro, Tyro, Elmo, Yashili, O2Micro

We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads – 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), Genex Power Ltd (GNX AU), Golden Energy & Resources (GER SP), Origin Energy (ORG AU).
Lowest spreads Warrego Energy (WGO AU), Nitro Software Ltd (NTO AU), Chip Eng Seng Corp (CHIP SP), Uzabase Inc (3966 JP), Norwest Energy Nl (NWE AU), Elmo Software (ELO AU).

Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Dec 19

Daily Brief TMT/Internet: Kurly Inc, Twitter Inc and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Korea FSC’s Official Rule Changes for Local IPOs & Key Takeaways
Elon Sold More Falling Tesla Stock. Margin Calls? Twitter Failing? Bank Demands? Likely All Three.

Korea FSC’s Official Rule Changes for Local IPOs & Key Takeaways