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Smartkarma Daily Briefs

Jul 26
0

Daily Brief Energy/Materials: Gem Co Ltd A, Grupa Lotos SA, Scotts Miracle-Gro Co Cl A, Honghua Group and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • GEM Co., Ltd. GDR Listing – Better Discount than Last Two and Ming Yang Has Held Up
  • PKN Orlen/Lotos: Attractive Spread
  • Short Names on Our “Workbench”: Scotts Miracle-Gro, Corsair Gaming, CF Indus, Gap Inc, Hub Group.
  • Morning Views Asia: Honghua Group, Tata Steel Thailand

GEM Co., Ltd. GDR Listing – Better Discount than Last Two and Ming Yang Has Held Up

By Clarence Chu

  • Gem Co Ltd A (002340 CH) is looking to raise around US$245m in its Swiss GDR listing.
  • Proceeds will be used mainly for overseas expansion, such as the development of the Indonesian Nickel Resource Base and development of its production base and recycling center in Europe.
  • In terms of discount, relative to the most recent two deals, Keda Industrial and Ningbo Shanshan, GEM’s GDRs are offered at a more enticing 11.7-14.2% discount to its A-shares,

PKN Orlen/Lotos: Attractive Spread

By Jesus Rodriguez Aguilar

  • Shareholders of Polish refiner PKN Orlen approved the proposed takeover of smaller rival Grupa Lotos, bringing Poland closer to creating a national champion better able to compete against global players.
  • This takeover has been planned for a long time and could not proceed until the EU gave the green light with a long list of remedies.
  • Gross spread (as of 22 July) is 5.63%. Shares of Lotos will cease trading next week. Long 1 LTS PW/short 1.075 PKN PW.

Short Names on Our “Workbench”: Scotts Miracle-Gro, Corsair Gaming, CF Indus, Gap Inc, Hub Group.

By Eric Fernandez, CFA

  • The following names are “on the workbench”, ie., names we are working on that look interesting from the short side. They are discussed, with charts, in the PDF attached below.
  • We like to be as transparent as possible in our short idea generation process.  
  • Today, we are flagging: Scotts Miracle-Gro, Corsair Gaming, CF Indus, Gap Inc, Hub Group.

Morning Views Asia: Honghua Group, Tata Steel Thailand

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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Jul 26
0

Daily Brief Event-Driven: Large Potential S-REIT Flows in the Next Two Weeks and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Large Potential S-REIT Flows in the Next Two Weeks
  • Alibaba (9988 HK): Dual Primary Listing Implications
  • IDX30/​LQ45 Index Rebalance: Big Inflows on ARTO, BBRI, BBCA; Outflows on GOTO, TLKM, BMRI
  • Genex: Atlassian’s Farquhar Makes An Offer
  • Thai Life Insurance (TLI): Borderline SET50 Fast Entry
  • Genex’s Offer of A$0.23 from Skip Capital Likely Won’t Cut It
  • Hwa Hong Confirms No Competing Offers
  • PKN Orlen/Lotos: Attractive Spread
  • STOXX Europe Quiddity Leaderboard Sep 2022 (2.0): Ultra Electronics, Bavarian Nordic, Uniper, & More

Large Potential S-REIT Flows in the Next Two Weeks

By Travis Lundy

  • Given recent corporate events in S-REIT land, there could be some considerable money to be allocated to the sector near-term
  • These flows come at a time when prices are down off highs and liquidity is low.
  • There could be some price impact on certain types of S-REITs near-term.

Alibaba (9988 HK): Dual Primary Listing Implications

By Brian Freitas

  • Alibaba Group (9988 HK) currently has a Secondary Listing in Hong Kong and is looking to become dual primary listed in Hong Kong and the U.S.
  • The main change will be inclusion in the Southbound Stock Connect program where mainland investors will be able to buy the stock.
  • Alibaba Group (9988 HK) is capped at 8% in the HSCEI INDEX and is close to 8% of the HSI INDEX, there will be negligible impact on the dividend futures.

IDX30/​LQ45 Index Rebalance: Big Inflows on ARTO, BBRI, BBCA; Outflows on GOTO, TLKM, BMRI

By Brian Freitas

  • There are 3 changes each for the IDX30 Index and LQ45 Index and 11 changes for the IDX80 Index at the upcoming rebalance to be implemented on 29 July.
  • There is passive inflow on Bank Jago Tbk PT (ARTO) due to index inclusion, and on Bank Rakyat Indonesia (BBRI) and Bank Central Asia (BBCA) due to capping changes.
  • With only 4 days to implementation, there will be relatively big moves on stocks that have large flow/impact from passive fund trading.

Genex: Atlassian’s Farquhar Makes An Offer

By David Blennerhassett

  • Renewable energy play Genex Power Ltd (GNX AU) has announced a non-binding indicative proposal from Atlassian’s Scott Farquhar and Stonepeak, by way of a Scheme, at A$0.23/share. 
  • That’s around a 64% premium. Farquhar holds a 19.9% stake. 
  • Farquhar, along with Atlassian co-founder Mike Cannon-Brookes, backed Genex capital raising in March last year.

Thai Life Insurance (TLI): Borderline SET50 Fast Entry

By Brian Freitas

Genex’s Offer of A$0.23 from Skip Capital Likely Won’t Cut It

By Arun George

  • Genex Power Ltd (GNX AU) shares rose 44% on the back of an A$0.23 per share offer from Skip Capital and Stonepeak. Skip also increased its stake to 19.99%.
  • At first glance, the offer looks generous in comparison to peer multiples and recent share prices. However, the offer is opportunistic partly due to Genex’s 500MW pipeline of projects. 
  • Benchmarking the precedent transaction multiples suggests that Genex’s existing portfolio is worth at least A$0.27 per share. The Board should engage for a higher price. 

Hwa Hong Confirms No Competing Offers

By Arun George

  • The Ong directors tried every trick in the book to derail the Hwa Hong Corp (HWAH SP) offer. The trump card was hiring Evercore to attract competing offers by 25 July.
  • The Board confirmed today that there are no competing offers. This is a catalyst for shareholders sitting on the fence to accept the S$0.40 per share offer.
  • The offer closes on 1 August. While meeting the 50%+ minimum acceptance condition will be a close-run, we think it will be met. The gross spread is 5.3%.     

PKN Orlen/Lotos: Attractive Spread

By Jesus Rodriguez Aguilar

  • Shareholders of Polish refiner PKN Orlen approved the proposed takeover of smaller rival Grupa Lotos, bringing Poland closer to creating a national champion better able to compete against global players.
  • This takeover has been planned for a long time and could not proceed until the EU gave the green light with a long list of remedies.
  • Gross spread (as of 22 July) is 5.63%. Shares of Lotos will cease trading next week. Long 1 LTS PW/short 1.075 PKN PW.

STOXX Europe Quiddity Leaderboard Sep 2022 (2.0): Ultra Electronics, Bavarian Nordic, Uniper, & More

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the names leading the race to become ADDs/DELs for the STOXX Europe 600 and EURO STOXX Indices for the September 2022 Rebalance.
  • Based on current rankings, there could be around 8 ADDs/DELs in the September 2022 Rebalance.
  • Furthermore, Ultra Electronics Holdings (ULE LN) could get deleted at the end of this week triggering an intra-review addition to the STOXX Europe 600 Index.

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Jul 26
0

Daily Brief Utilities: Genex Power Ltd and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • Genex: Atlassian’s Farquhar Makes An Offer
  • Genex’s Offer of A$0.23 from Skip Capital Likely Won’t Cut It

Genex: Atlassian’s Farquhar Makes An Offer

By David Blennerhassett

  • Renewable energy play Genex Power Ltd (GNX AU) has announced a non-binding indicative proposal from Atlassian’s Scott Farquhar and Stonepeak, by way of a Scheme, at A$0.23/share. 
  • That’s around a 64% premium. Farquhar holds a 19.9% stake. 
  • Farquhar, along with Atlassian co-founder Mike Cannon-Brookes, backed Genex capital raising in March last year.

Genex’s Offer of A$0.23 from Skip Capital Likely Won’t Cut It

By Arun George

  • Genex Power Ltd (GNX AU) shares rose 44% on the back of an A$0.23 per share offer from Skip Capital and Stonepeak. Skip also increased its stake to 19.99%.
  • At first glance, the offer looks generous in comparison to peer multiples and recent share prices. However, the offer is opportunistic partly due to Genex’s 500MW pipeline of projects. 
  • Benchmarking the precedent transaction multiples suggests that Genex’s existing portfolio is worth at least A$0.27 per share. The Board should engage for a higher price. 

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  • ✓ Events & Webinars
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Jul 26
0

Daily Brief Equity Bottom-Up: Pop Mart: Aggressive Overseas Expansion to Hurt Profitability and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Pop Mart: Aggressive Overseas Expansion to Hurt Profitability
  • Duolingo: Now, Available In China. Plenty of Positives and Strong Operating Metrics
  • Pharmaron Beijing Co Ltd (3759.HK/300759.CH) – The Story May Have Changed
  • Alibaba (9988 HK) Pre-Earnings: Lowest Growth, Will Recover in December Quarter, Buy
  • Korean Defense Companies:  Potential Contracts Worth 28 Trillion Won from Poland, UK, & Norway
  • Short Names on Our “Workbench”: Scotts Miracle-Gro, Corsair Gaming, CF Indus, Gap Inc, Hub Group.
  • IPAR: Growth Despite Forex Headwind

Pop Mart: Aggressive Overseas Expansion to Hurt Profitability

By Shifara Samsudeen, ACMA, CGMA

  • Pop Mart’s share price has lost more than 50% YTD as resurgence of Covid in China has severely impacted the company’s operations including closure of physical stores and robo shops.
  • The company also issued a profit warning last week for 1H2022 that was severely impacted by the spread of Covid-19 as well as business expansion related costs.
  • We expect the company’s aggressive overseas expansion strategy to continue to impact the company’s profitability and there is further downside.

Duolingo: Now, Available In China. Plenty of Positives and Strong Operating Metrics

By Andrei Zakharov

  • Duolingo (DUOL US)  will announce its 2Q22 quarterly results on August 4, 2022. The leading U.S. EdTech unicorn raised FY22 guidance and reported strong operating metrics in 1Q22.
  • Duolingo app is back in Apple App Store and Android stores in China after the app was removed from some app stores 1 year ago due to Beijing’s EdTech crackdown. 
  • Durable Capital Partners acquired ~$158M worth of Duolingo (DUOL US)  shares this year. General Atlantic and Durable Capital Partners led the most recent Series H private round in November 2020. 

Pharmaron Beijing Co Ltd (3759.HK/300759.CH) – The Story May Have Changed

By Xinyao (Criss) Wang

  • Pharmaron’s share price plunged after the release of the estimate for 2022 interim results, even dragging down the entire CXO sector, which reflected the attitude of Mr Market.
  • One important reason for low net profit growth is related to the development strategy – Even if Pharmaron achieves  “integration”, its advantage/profit margin could largely shrink due to overcapacity/fierce competition.  
  • Pharmaron can only achieve V-shaped rebound by making breakthroughs in CGT CXO to boost valuations and expectations on outlook rather than pursue the strategy of “integration” as in the past.

Alibaba (9988 HK) Pre-Earnings: Lowest Growth, Will Recover in December Quarter, Buy

By Ming Lu

  • We believe Alibaba’s revenue growth rate will reach historical low in 1Q23, but it will recover two quarters later.
  • Alibaba’s stock price fell from HK$300 in October 2020 to HK$100 today.
  • We believe Alibaba has at least an upside of 43%.

Korean Defense Companies:  Potential Contracts Worth 28 Trillion Won from Poland, UK, & Norway

By Douglas Kim

  • There have been more news flow about several major Korean defense companies that could receive as much as 28 trillion won in new orders from three major European countries.
  • The Poland government could purchase jets, tanks, and howitzers from major Korean defense companies such as Hyundai Rotem (K2 tanks), KAI (FA50 fighter jets), and Hanwha Defense (K9 howitzers).
  • There is a good probability that the Korean defense contractors may be able to secure a large percentage of the 28 trillion won in new arms exports contracts.

Short Names on Our “Workbench”: Scotts Miracle-Gro, Corsair Gaming, CF Indus, Gap Inc, Hub Group.

By Eric Fernandez, CFA

  • The following names are “on the workbench”, ie., names we are working on that look interesting from the short side. They are discussed, with charts, in the PDF attached below.
  • We like to be as transparent as possible in our short idea generation process.  
  • Today, we are flagging: Scotts Miracle-Gro, Corsair Gaming, CF Indus, Gap Inc, Hub Group.

IPAR: Growth Despite Forex Headwind

By Hamed Khorsand

  • IPAR continues to demonstrate the strength of the consumer’s willingness to purchase fragrances the Company develops
  • IPAR announced Q2 sales of $244.7M compared to our forecast of $198.0M. The strength in the quarter was notable in the USA while the European segment had a small lift
  • IPAR taking over the Donna Karan and DKNY brands should lead to greater sales performance in the second half of the year

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Jul 26
0

Daily Brief Macro: Lower Corporate Tax Rate in Korea Could Be an Extra Alpha Kicker and more

By | Daily Briefs, Macro

In today’s briefing:

  • Lower Corporate Tax Rate in Korea Could Be an Extra Alpha Kicker
  • The Week That Was in ASEAN@Smartkarma – Metrodata Electronics, Arwana, and Emperador in Singapore
  • CX Daily: Chinese Carmakers Jostle For An Edge In Autonomous Driving
  • The Commodity Report #61

Lower Corporate Tax Rate in Korea Could Be an Extra Alpha Kicker

By Douglas Kim

  • We believe that there is a relatively high probability that the Korean government will lower the highest corporate tax rate bracket from 25% to 22% starting next year.
  • A 3% change in corporate tax rate should result in about 4% higher net profit for Korean companies.
  • Among the top 30 companies in Korea, we believe the companies with the biggest impact on lowering their tax rates include LG Electronics, Naver, Kakao Corp, SK Innovation, and KT&G. 

The Week That Was in ASEAN@Smartkarma – Metrodata Electronics, Arwana, and Emperador in Singapore

By Angus Mackintosh

CX Daily: Chinese Carmakers Jostle For An Edge In Autonomous Driving

By Caixin Global

  • Chinese carmakers jostle for an edge in autonomous driving
  • Nearly 9,000 people died in work safety incidents this year, ministry says
  • China banking regulator pushes smaller banks to dispose of bad loans

The Commodity Report #61

By The Commodity Report

  • The war premium for energy components disappears
  • High prices combined with slowing economic growth lead indeed to now visible demand destruction (see analysis by Pro Vision Macro below)
  • Lots of speculative positioning is getting washed out of the market 

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Jul 26
0

Daily Brief Health Care: Bavarian Nordic A/S, Pharmaron Beijing Co Ltd-H and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • STOXX Europe Quiddity Leaderboard Sep 2022 (2.0): Ultra Electronics, Bavarian Nordic, Uniper, & More
  • Pharmaron Beijing Co Ltd (3759.HK/300759.CH) – The Story May Have Changed

STOXX Europe Quiddity Leaderboard Sep 2022 (2.0): Ultra Electronics, Bavarian Nordic, Uniper, & More

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the names leading the race to become ADDs/DELs for the STOXX Europe 600 and EURO STOXX Indices for the September 2022 Rebalance.
  • Based on current rankings, there could be around 8 ADDs/DELs in the September 2022 Rebalance.
  • Furthermore, Ultra Electronics Holdings (ULE LN) could get deleted at the end of this week triggering an intra-review addition to the STOXX Europe 600 Index.

Pharmaron Beijing Co Ltd (3759.HK/300759.CH) – The Story May Have Changed

By Xinyao (Criss) Wang

  • Pharmaron’s share price plunged after the release of the estimate for 2022 interim results, even dragging down the entire CXO sector, which reflected the attitude of Mr Market.
  • One important reason for low net profit growth is related to the development strategy – Even if Pharmaron achieves  “integration”, its advantage/profit margin could largely shrink due to overcapacity/fierce competition.  
  • Pharmaron can only achieve V-shaped rebound by making breakthroughs in CGT CXO to boost valuations and expectations on outlook rather than pursue the strategy of “integration” as in the past.

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Jul 26
0

Daily Brief TMT/Internet: Duolingo and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Duolingo: Now, Available In China. Plenty of Positives and Strong Operating Metrics

Duolingo: Now, Available In China. Plenty of Positives and Strong Operating Metrics

By Andrei Zakharov

  • Duolingo (DUOL US)  will announce its 2Q22 quarterly results on August 4, 2022. The leading U.S. EdTech unicorn raised FY22 guidance and reported strong operating metrics in 1Q22.
  • Duolingo app is back in Apple App Store and Android stores in China after the app was removed from some app stores 1 year ago due to Beijing’s EdTech crackdown. 
  • Durable Capital Partners acquired ~$158M worth of Duolingo (DUOL US)  shares this year. General Atlantic and Durable Capital Partners led the most recent Series H private round in November 2020. 

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  • ✓ Events & Webinars
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Jul 26
0

Daily Brief Consumer: Alibaba Group, Pop Mart International Group Limited, Shenzhen Pagoda Industrial, Inter Parfums and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Alibaba (9988 HK): Dual Primary Listing Implications
  • Pop Mart: Aggressive Overseas Expansion to Hurt Profitability
  • Shenzhen Pagoda Industrial Pre-IPO – Earnings Recovered but Nothing Really Stands Out
  • Alibaba (9988 HK) Pre-Earnings: Lowest Growth, Will Recover in December Quarter, Buy
  • IPAR: Growth Despite Forex Headwind

Alibaba (9988 HK): Dual Primary Listing Implications

By Brian Freitas

  • Alibaba Group (9988 HK) currently has a Secondary Listing in Hong Kong and is looking to become dual primary listed in Hong Kong and the U.S.
  • The main change will be inclusion in the Southbound Stock Connect program where mainland investors will be able to buy the stock.
  • Alibaba Group (9988 HK) is capped at 8% in the HSCEI INDEX and is close to 8% of the HSI INDEX, there will be negligible impact on the dividend futures.

Pop Mart: Aggressive Overseas Expansion to Hurt Profitability

By Shifara Samsudeen, ACMA, CGMA

  • Pop Mart’s share price has lost more than 50% YTD as resurgence of Covid in China has severely impacted the company’s operations including closure of physical stores and robo shops.
  • The company also issued a profit warning last week for 1H2022 that was severely impacted by the spread of Covid-19 as well as business expansion related costs.
  • We expect the company’s aggressive overseas expansion strategy to continue to impact the company’s profitability and there is further downside.

Shenzhen Pagoda Industrial Pre-IPO – Earnings Recovered but Nothing Really Stands Out

By Ethan Aw

  • Shenzhen Pagoda Industrial (1317437D CH) is looking to raise up to US$500m in its upcoming Hong Kong IPO. 
  • Shenzhen Pagoda Industrial (SPI) is a fruit retail operator in China. According to Frost & Sullivan, it ranked first among all fruit specialty retail operators in China in 2021.
  • However, the firm operates in a highly fragmented industry with low market share of 1.0%, even as the largest player. 

Alibaba (9988 HK) Pre-Earnings: Lowest Growth, Will Recover in December Quarter, Buy

By Ming Lu

  • We believe Alibaba’s revenue growth rate will reach historical low in 1Q23, but it will recover two quarters later.
  • Alibaba’s stock price fell from HK$300 in October 2020 to HK$100 today.
  • We believe Alibaba has at least an upside of 43%.

IPAR: Growth Despite Forex Headwind

By Hamed Khorsand

  • IPAR continues to demonstrate the strength of the consumer’s willingness to purchase fragrances the Company develops
  • IPAR announced Q2 sales of $244.7M compared to our forecast of $198.0M. The strength in the quarter was notable in the USA while the European segment had a small lift
  • IPAR taking over the Donna Karan and DKNY brands should lead to greater sales performance in the second half of the year

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  • ✓ Custom Watchlists
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Jul 26
0

Daily Brief Financials: Mapletree Commercial Trust, Bank Jago Tbk PT, Thai Life Insurance, Hwa Hong Corp, Onewo Space-Tech, NFT and more

By | Daily Briefs, Financials

In today’s briefing:

  • Large Potential S-REIT Flows in the Next Two Weeks
  • IDX30/​LQ45 Index Rebalance: Big Inflows on ARTO, BBRI, BBCA; Outflows on GOTO, TLKM, BMRI
  • Thai Life Insurance (TLI): Borderline SET50 Fast Entry
  • Hwa Hong Confirms No Competing Offers
  • Onewo Space-Tech Pre-IPO – The Positives – One of the Largest and Still Growing Fast
  • Sporting Crypto – July 25th 2022: RTFKT & Nike Push the ‘Phygital’ Boundaries

Large Potential S-REIT Flows in the Next Two Weeks

By Travis Lundy

  • Given recent corporate events in S-REIT land, there could be some considerable money to be allocated to the sector near-term
  • These flows come at a time when prices are down off highs and liquidity is low.
  • There could be some price impact on certain types of S-REITs near-term.

IDX30/​LQ45 Index Rebalance: Big Inflows on ARTO, BBRI, BBCA; Outflows on GOTO, TLKM, BMRI

By Brian Freitas

  • There are 3 changes each for the IDX30 Index and LQ45 Index and 11 changes for the IDX80 Index at the upcoming rebalance to be implemented on 29 July.
  • There is passive inflow on Bank Jago Tbk PT (ARTO) due to index inclusion, and on Bank Rakyat Indonesia (BBRI) and Bank Central Asia (BBCA) due to capping changes.
  • With only 4 days to implementation, there will be relatively big moves on stocks that have large flow/impact from passive fund trading.

Thai Life Insurance (TLI): Borderline SET50 Fast Entry

By Brian Freitas

Hwa Hong Confirms No Competing Offers

By Arun George

  • The Ong directors tried every trick in the book to derail the Hwa Hong Corp (HWAH SP) offer. The trump card was hiring Evercore to attract competing offers by 25 July.
  • The Board confirmed today that there are no competing offers. This is a catalyst for shareholders sitting on the fence to accept the S$0.40 per share offer.
  • The offer closes on 1 August. While meeting the 50%+ minimum acceptance condition will be a close-run, we think it will be met. The gross spread is 5.3%.     

Onewo Space-Tech Pre-IPO – The Positives – One of the Largest and Still Growing Fast

By Sumeet Singh

  • Onewo Space-Tech (OST) aims to raise around US$2bn in its Hong Kong IPO. OST is a property management service provider primarily owned by China Vanke Co Ltd (H) (2202 HK).
  • As per Frost & Sullivan, amongst the residential community service providers in China, OST ranked first. It also ranked first in the commercial space integrated services market in China.
  • In this note, we will talk about the positive aspects of the deal.

Sporting Crypto – July 25th 2022: RTFKT & Nike Push the ‘Phygital’ Boundaries

By Sporting Crypto

  • By now, you’ve probably heard about RTFKT. Especially if you’ve been reading Sporting Crypto for a while.
  • If you haven’t, they’re one of the most successful NFT companies in the world — and that success saw Nike acquire them in late 2021.
  • They pride themselves on being one of the premier creators of high end digital collectables, and more specifically, digital fashion. 

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Jul 26
0

Most Read: Gcl Poly Energy Holdings Limited, Sayona Mining, Tianqi Lithium, Mapletree Commercial Trust, Alibaba Group, Bank Jago Tbk PT, Genex Power Ltd, Thai Life Insurance, Gotion High-Tech Co Ltd, Gem Co Ltd A and more

By | Daily Briefs, Most Read

In today’s briefing:

  • MSCI August 2022 Index Rebalance Preview: The Last QIR!
  • S&P/​​​ASX Index Rebalance Preview: Busy Rebalance With Lots of Changes Expected
  • Index Rebalance & ETF Flow Recap: STAR50, NIFTY50/100, KRX, Tianqi Lithium, Kotak Bank, Emperador
  • Large Potential S-REIT Flows in the Next Two Weeks
  • Alibaba (9988 HK): Dual Primary Listing Implications
  • IDX30/​LQ45 Index Rebalance: Big Inflows on ARTO, BBRI, BBCA; Outflows on GOTO, TLKM, BMRI
  • Genex: Atlassian’s Farquhar Makes An Offer
  • Thai Life Insurance (TLI): Borderline SET50 Fast Entry
  • Gotion High Tech GDR Listing – Recent GDRs Have Seen Narrowing Discounts
  • GEM Co., Ltd. GDR Listing – Better Discount than Last Two and Ming Yang Has Held Up

MSCI August 2022 Index Rebalance Preview: The Last QIR!

By Brian Freitas

S&P/​​​ASX Index Rebalance Preview: Busy Rebalance With Lots of Changes Expected

By Brian Freitas

Index Rebalance & ETF Flow Recap: STAR50, NIFTY50/100, KRX, Tianqi Lithium, Kotak Bank, Emperador

By Brian Freitas

  • We have gone through days 1-5 of the review period for the MSCI September rebalance. There are multiple review cutoffs in the coming week.
  • The announcement of the changes to the LQ45/IDX30/IDX80 indices should be made early in the coming week and implemented at the close on 29 July.
  • China had the largest ETF inflows over the last week, while there were outflows from Korea focused ETFs.

Large Potential S-REIT Flows in the Next Two Weeks

By Travis Lundy

  • Given recent corporate events in S-REIT land, there could be some considerable money to be allocated to the sector near-term
  • These flows come at a time when prices are down off highs and liquidity is low.
  • There could be some price impact on certain types of S-REITs near-term.

Alibaba (9988 HK): Dual Primary Listing Implications

By Brian Freitas

  • Alibaba Group (9988 HK) currently has a Secondary Listing in Hong Kong and is looking to become dual primary listed in Hong Kong and the U.S.
  • The main change will be inclusion in the Southbound Stock Connect program where mainland investors will be able to buy the stock.
  • Alibaba Group (9988 HK) is capped at 8% in the HSCEI INDEX and is close to 8% of the HSI INDEX, there will be negligible impact on the dividend futures.

IDX30/​LQ45 Index Rebalance: Big Inflows on ARTO, BBRI, BBCA; Outflows on GOTO, TLKM, BMRI

By Brian Freitas

  • There are 3 changes each for the IDX30 Index and LQ45 Index and 11 changes for the IDX80 Index at the upcoming rebalance to be implemented on 29 July.
  • There is passive inflow on Bank Jago Tbk PT (ARTO) due to index inclusion, and on Bank Rakyat Indonesia (BBRI) and Bank Central Asia (BBCA) due to capping changes.
  • With only 4 days to implementation, there will be relatively big moves on stocks that have large flow/impact from passive fund trading.

Genex: Atlassian’s Farquhar Makes An Offer

By David Blennerhassett

  • Renewable energy play Genex Power Ltd (GNX AU) has announced a non-binding indicative proposal from Atlassian’s Scott Farquhar and Stonepeak, by way of a Scheme, at A$0.23/share. 
  • That’s around a 64% premium. Farquhar holds a 19.9% stake. 
  • Farquhar, along with Atlassian co-founder Mike Cannon-Brookes, backed Genex capital raising in March last year.

Thai Life Insurance (TLI): Borderline SET50 Fast Entry

By Brian Freitas

Gotion High Tech GDR Listing – Recent GDRs Have Seen Narrowing Discounts

By Clarence Chu

  • Gotion High-Tech Co Ltd (002074 CH) (GHT) is looking to raise US$1bn from its Swiss GDR listing. Bookrunners on the deal are CICC and Haitong International.
  • The shares offered in GHT’s GDR offering ranges between 16.65m – 33.29m GDRs (83.24m – 166.47m A-shares), ranging the deal size between US$499m-US$1bn. 
  • At the top end, in terms of number of GDRs offered, the deal would represent 4.7 days of ADV on the A-share market and 9.6% of current mcap.

GEM Co., Ltd. GDR Listing – Better Discount than Last Two and Ming Yang Has Held Up

By Clarence Chu

  • Gem Co Ltd A (002340 CH) is looking to raise around US$245m in its Swiss GDR listing.
  • Proceeds will be used mainly for overseas expansion, such as the development of the Indonesian Nickel Resource Base and development of its production base and recycling center in Europe.
  • In terms of discount, relative to the most recent two deals, Keda Industrial and Ningbo Shanshan, GEM’s GDRs are offered at a more enticing 11.7-14.2% discount to its A-shares,

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