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Smartkarma Daily Briefs

Mar 12
0

Daily Brief Financials: ESR Group , Korea Stock Exchange Kospi Index, Indusind Bank, SK Inc, Bank Of Baroda, Tejon Ranch , Yuexiu Property and more

By | Daily Briefs, Financials

In today’s briefing:

  • ESR (1821 HK) Chips Away At Pre-Cons
  • Properly Interpreting Korea’s Stock Borrow Data for Short Selling
  • IndusInd Bank (IIB IN): Stock Crashes on Derivatives Losses; Index Selling Next
  • Asia Real Estate Tracker (11-Mar-2025): Singapore buying Sydney office for $70M.
  • IndusInd Bank: Derivative Discrepancy Surfaces, Raising Governance Concerns
  • Bank of Baroda QIP Early Look – Well Flagged but Last Deal Did Not Do Well
  • TRC: Potential Upcoming Catalysts Include Opening of First Terra Vista Units
  • Lucror Analytics – Morning Views Asia

ESR (1821 HK) Chips Away At Pre-Cons

By David Blennerhassett

  • When the Starwood/Warburg Pincus Consortium announced a firm offer on the 4th December, it was pre-conditional on a raft of regulatory approvals from no less than eight countries/jurisdictions. 
  • We’re half way there, with four approvals now squared away, leaving Australia, China, Hong Kong and New Zealand still to give the go ahead. 
  • Irrevocables comprising 34.26% of the register (and 57.01% of disinterested shares) are now in the bag. This is a done deal. It’s just a question of timing.

Properly Interpreting Korea’s Stock Borrow Data for Short Selling

By Sanghyun Park

  • Local instos borrow from brokers or peers, KSD collects and cleans the data, then KOFIA reports stock borrow balances daily with a two-day lag.
  • Offshore borrows via EquiLend or PB deals don’t show up—KSD reporting only covers local institution-to-institution stock loans.
  • Assume 60% of reported borrow balance is real shortable ammo—adjusting for this helps filter out noise in short positioning.

IndusInd Bank (IIB IN): Stock Crashes on Derivatives Losses; Index Selling Next

By Brian Freitas

  • The Indusind Bank (IIB IN) stock was down 27% yesterday following the announcement of Derivatives Portfolio losses that have wiped out 2.35% of equity.
  • Foreign investors were big sellers in the last 3 months of 2024. That led to increased foreign room, leading to an index upweight in February and index inclusion in March.
  • The drop in market cap and free float market cap will see Indusind Bank (IIB IN) deleted from the S&P BSE SENSEX Index in June and the NIFTY Index in September.

Asia Real Estate Tracker (11-Mar-2025): Singapore buying Sydney office for $70M.

By Asia Real Estate Tracker

  • Cambridge, a Singapore-based firm, purchases a Sydney office block for $70M from a former Tysan boss, expanding its real estate portfolio
  • Hong Kong Land reports a significant increase in losses, totaling $1.4B, attributed to challenges within its Central Portfolio
  • M&G Real Estate invests $62M in student housing in Melbourne, Australia, highlighting their focus on the Australian real estate market. Warburg Pincus forms a partnership with SK Group to develop Korean senior living facilities, tapping into the growing demand for elderly care in South Korea.

IndusInd Bank: Derivative Discrepancy Surfaces, Raising Governance Concerns

By Nimish Maheshwari

  • IndusInd Bank recently disclosed a significant accounting discrepancy in its derivatives portfolio, estimated to impact its net worth by INR 1,580 crore (~2.35%). 
  • The issue pertains to internal trades executed over the past 7–8 years, now identified through a detailed internal review initiated following regulatory changes.
  • This development, when viewed alongside the abrupt CFO exit, regulatory pushback on CEO tenure, and existing operational challenges, raises concerns around internal controls, risk governance, and management credibility.

Bank of Baroda QIP Early Look – Well Flagged but Last Deal Did Not Do Well

By Akshat Shah

  • Bank Of Baroda (BOB IN) is looking to raise about INR 85bn (US$980m) in its upcoming qualified institutional placement (QIP).
  • In an announcement released on Feb 13, 2025, BOB mentioned its board’s approval to raise upto INR85bn via various modes including a QIP. Since then, the shares have corrected 1.2%.
  • The deal would be a relatively large one to digest at 39 days of three month ADV. The company’s last fundraise did not do well.

TRC: Potential Upcoming Catalysts Include Opening of First Terra Vista Units

By Zacks Small Cap Research

  • The convenience and affordability of Terra Vista housing, as well as proximity to LA, are expected to drive demand from TRCC employees and others.
  • The development of the nearby Hard Rock Hotel & Casino Tejon is another likely driver of demand for affordable housing from its employees.
  • Upon completion, Terra Vista at Tejon is expected to be the largest rental community in Kern County.

Lucror Analytics – Morning Views Asia

By Leonard Law, CFA

  • In today’s Morning Views publication we comment on developments of the following high yield issuers: Yuexiu Property, Adani Energy Solutions
  • In the US, treasuries climbed on safe-haven demand and increased expectations of Fed rate cuts, amid growing concerns over the US economy. The UST curve bull-steepened, with the yield on the 2Y UST declining 12 bps to 3.89%, while the yield on the 10Y UST fell 9 bps to 4.22%. Fed-dated OIS were pricing in 81 bps of rate cuts this year, with the first decrease expected in June.
  • Equities sank on rising economic uncertainty, given rising trade tensions and after US President Donald Trump’s comments that the economy is facing a “period of transition” this year. The S&P 500 fell 2.7% to 5,615, while the Nasdaq slid 4.0% to 17,468.

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Mar 11
0

Daily Brief ECM: Pre-IPO Huge Dental Limited – The Business and the Concerns Behind and more

By | Daily Briefs, ECM

In today’s briefing:

  • Pre-IPO Huge Dental Limited – The Business and the Concerns Behind
  • Anjoy Foods Group A/H Listing – A Leader in a Fragmented Industry

Pre-IPO Huge Dental Limited – The Business and the Concerns Behind

By Xinyao (Criss) Wang

  • Since HUGE ranks in the first tier among domestic brands, the import substitution would be the main logic to continue driving the performance growth based on its strong cost effectiveness.
  • If HUGE wants to achieve success in non-advantageous areas in the future, reducing price to compete for more market share could be an essential means. VBP is also a challenge.
  • Comparable companies include Sinocera Functional Material, Yantai Zhenghai Bio-Tech, Angelalign, Modern Dental Group, Topchoice Medical. We think valuation of HUGE could be higher than peers due to higher profitability.

Anjoy Foods Group A/H Listing – A Leader in a Fragmented Industry

By Sumeet Singh

  • Anjoy Foods Group (603345 CH), a quick-frozen food company in China, aims to raise around US$300m in its H-share listing.
  • AFG was the largest quick-frozen food company in China in terms of revenue in 2023, with a market share of 6.2%, according to the Frost & Sullivan report. 
  • In this note, we look at its past performance and other deal dynamics that might impact the listing.

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Mar 11
0

Daily Brief Thematic (Sector/Industry): Chartered Insights: Which Asian Economies Face the Greatest Threat from US Reciprocal Tariffs? and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Chartered Insights: Which Asian Economies Face the Greatest Threat from US Reciprocal Tariffs?
  • Ohayo Japan | Wall Street Rout Deepens
  • Who Is Crazy Enough to Buy a Chinese Bank?
  • Japan Morning Connection: Bloodbath for Tech and Continued Pivot from Growth to Value
  • Can India Achieve Advanced Economy Status by 2047? – IMF Report
  • What Ultratech’s Foray into Wires & Cables Means for Industry Dynamics, Competition, and Growth
  • Biopharma Week in Review – March 10, 2025

Chartered Insights: Which Asian Economies Face the Greatest Threat from US Reciprocal Tariffs?

By Sudarshan Bhandari

  • Trump’s tariffs are set to impact Asia, especially economies like Vietnam who stand out with a substantial 25.1% of its GDP exposed to the US market in 2024.
  • India and Thailand face reciprocal tariff risks, while sectors like food and textiles may bear the brunt.
  • Beyond direct tariffs, non-tariff barriers in China and India and potential inflation in the US add complexity.

Ohayo Japan | Wall Street Rout Deepens

By Mark Chadwick

  • Stocks plunged Monday as recession fears mounted, with the S&P 500 dropping 2.7% to 5,614 and the Nasdaq sinking 4%
  • The “Magnificent Seven” led losses, with Tesla (TSLA) plummeting 15%, Nvidia (NVDA) down 5%, and Alphabet (GOOGL) and Meta (META) losing over 4%
  • Seven &i Holdings responds to shareholder Artisan Partners’ opposition to the appointment of Stephen Hayes Dacus as president

Who Is Crazy Enough to Buy a Chinese Bank?

By Rikki Malik

  • A stealth bull market is underway in Chinese bank shares 
  • Banks are well positioned to benefit as the economy grows and interest rates rise
  • Value remains in the sector despite the  move up in share prices

Japan Morning Connection: Bloodbath for Tech and Continued Pivot from Growth to Value

By Andrew Jackson

  • Japan’s SPE rebound yesterday led by Lasertec -10% may be short lived.
  • However, NVDA’s week-long developers conference from Monday may act as dip buying catalyst.
  • Still room for EU related plays to gain with many related names inherently defensive.

Can India Achieve Advanced Economy Status by 2047? – IMF Report

By Nimish Maheshwari

  • The IMF projects India as the fastest-growing major economy, with a 6.5% GDP growth rate, but can it achieve advanced economy status by 2047?.
  • Balancing fiscal prudence with investments in infrastructure, while leveraging AI for productivity, is critical for India’s transformation.  
  • Structural reforms, increased private investment, and managing global risks will determine if India realizes its vision by 2047.

What Ultratech’s Foray into Wires & Cables Means for Industry Dynamics, Competition, and Growth

By Sudarshan Bhandari

  • UltraTech Cement is entering the Wires & Cables industry with a INR 1,800 crore investment and a plant in Gujarat, aiming for INR 9,000 crore in revenue by 2030. 
  • With strong backward integration and an extensive distribution network, the move could disrupt a fragmented market. 
  • However, incumbents believe scaling and regulatory approvals will be key hurdles, much like Grasim’s entry into paints.

Biopharma Week in Review – March 10, 2025

By Water Tower Research

  • Market uncertainty and further disruptions at health agencies led to continued divergence between SMID-cap and large biopharma, as investors sought shelter in lower- risk, higher-quality names.
  • Trump nominees, Martin Makary for the FDA and Jay Bhattacharya for the NIH, appeared on course for Senate confirmations after relatively uncontentious hearings, but both provided little confidence that they would stop or reverse the draconian changes at these agencies.
  • NIH grant funding has not resumed despite a judge ruling against the cuts. RFK Jr. changed his stance on the measles outbreak, from not unusual to deeply concerned, as the second death occurred in an unvaccinated adult.

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Mar 11
0

Daily Brief Event-Driven: 7&I (3382) – Artisan Writes (Again) And 7&I Updates (Again) – More Positive Outlook Now and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • 7&I (3382) – Artisan Writes (Again) And 7&I Updates (Again) – More Positive Outlook Now
  • Seven & I Holdings (3382 JP): Reading Between the Lines of the Public Letter
  • Makino Milling Machine (6135 JP): A White Knight Bidder Is Emerging
  • Young Poong: Announces Cancellation of Entire Treasury Shares and 10:1 Stock Split
  • Insignia Financial (IFL AU): Bain and CC Capital Bumps to A$5.00, While Brookfield Drops Out
  • Sun Pharmaceutical (SUNP IN): Checkpoint Acquisition Does Not Check All the Boxes
  • Sell Kenvue + What I’m Buying

7&I (3382) – Artisan Writes (Again) And 7&I Updates (Again) – More Positive Outlook Now

By Travis Lundy

  • On Thursday 6 March we got a Nikkei article then a company announcement for Seven & I Holdings (3382 JP)‘s proposed management measures and update on ACT Bid Process.  
  • It involved Isaka-san stepping down, Stephen Dacus stepping up, selling York to Bain for ¥814.7bn, IPOing 7-Eleven US, a ¥2trln share buyback over 5yrs, and ACT process update. 
  • It was OK. Good, bad, and ugly. But Artisan wrote a letter over the weekend and 7&i responded and suddenly, their concerns are mostly addressed and the outlook is different.

Seven & I Holdings (3382 JP): Reading Between the Lines of the Public Letter

By Arun George

  • The Seven & I Holdings (3382 JP) Board has released a public letter to address Artisan Partners’ letter and provide more details on the Alimentation Couche-Tard (ATD CN) constructive engagement. 
  • The letter effectively addresses most of Artisan’s concerns. The Board is engaging with Couche-Tard, particularly by agreeing on a strategy to find a solution to secure antitrust approvals. 
  • However, the statement suggests that the Board retains deep scepticism that the Couche-Tard is viable and is manoeuvring to shift the blame on a failed bid on a flawed proposal. 

Makino Milling Machine (6135 JP): A White Knight Bidder Is Emerging

By Arun George

  • Makino Milling Machine Co (6135 JP) has disclosed that it has received initial letters of intent from multiple third parties, reportedly private equity funds, to launch a competing tender offer.
  • My analysis suggests that a white knight bid could be as high as JPY13,284, 20.8% higher than Nidec’s JPY11,000 offer and 10.2% higher than the last close price of JPY12,050.
  • Nidec Corp (6594 JP) will take a wait-and-see approach. However, regardless of whether a white knight bidder emerges, Nidec will eventually have to bump.

Young Poong: Announces Cancellation of Entire Treasury Shares and 10:1 Stock Split

By Douglas Kim

  • On 10 March, Young Poong (000670 KS) announced that it plans to cancel all of its treasury shares and conduct a 10-to-1 stock split.
  • Driven by the treasury shares cancellation and stock split, Young Poong’s share price rose 8.9% to 489,000 won today (10 March 2025). 
  • Our updated NAV of Young Poong suggests NAV per share of 834,064 per share, representing a 71% upside from current levels.

Insignia Financial (IFL AU): Bain and CC Capital Bumps to A$5.00, While Brookfield Drops Out

By Arun George

  • On 7 March, Insignia Financial (IFL AU) disclosed a revised non-binding privatisation offer from Bain and CC Capital at A$5.00, an 8.7% premium to their previous A$4.60 offer.
  • The exclusive due diligence period ends on 17 April (six weeks from signing the exclusivity deed). The Board will recommend a binding offer of at least A$5.00. 
  • The offer is attractive compared to historical trading ranges, peer multiples and precedent transactions. Therefore, a binding offer would gain shareholder support.

Sun Pharmaceutical (SUNP IN): Checkpoint Acquisition Does Not Check All the Boxes

By Tina Banerjee

  • Sun Pharmaceutical Industries (SUNP IN) (SPIL) announced the plan to acquire Checkpoint Therapeutics (CKPT US), a commercial stage immunotherapy and targeted oncology company, for ~$200M.
  • In December, Checkpoint has received FDA approval for its maiden drug, Unloxcyt (cosibelimab), for the treatment of certain type of skin cancer. Unloxcyt has peak sales estimate of $1.6B.
  • SPIL’s offer for Checkpoint seems compelling and provides superior risk-adjusted value. However, the acquisition will not be near-term value generator for SPIL, which doesn’t have good track record for acquisition.

Sell Kenvue + What I’m Buying

By Richard Howe

  • I’m closing out my Kenvue (KVUE) recommendation and will be selling my shares.

  • Following the spin-off from Johnson & Johnson (JNJ), KVUE shares performed poorly for a variety of reasons (lockluster growth, Tylenol related litigation, etc.) that I thought were overblown.

  • At the time, Kenvue was trading at a sharp discount to its consumer health care peers. Today, Kenvue trades at a slight discount to peers (21 P/E vs. 23.3x for the group).

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Mar 11
0

Daily Brief Credit: Bharti Airtel – ESG Report – Lucror Analytics and more

By | Credit, Daily Briefs

In today’s briefing:

  • Bharti Airtel – ESG Report – Lucror Analytics
  • Lucror Analytics – Morning Views Asia

Bharti Airtel – ESG Report – Lucror Analytics

By Trung Nguyen

Bharti Airtel is the second-largest telecom player in India, with a c. 30% market share. It also has significant operations in Africa, and to a smaller extent Bangladesh and Sri Lanka. The largest shareholders are Bharti Enterprises (42%) and Singtel (14%). Bharti Enterprises was founded/owned by Sunil Bharti Mittal. It is one of India’s first conglomerates, with interests in telecommunications, space, insurance, real estate, hospitality and food.

We view Bharti Airtel as “Low Risk” on the LARA scale, mainly given its strong market position as the second-largest player in India’s telecom industry. The company owns robust network infrastructure across the country, with a broad customer base. We also note positively the improving industry outlook, with rationalising competition and industry consolidation benefiting Bharti Airtel, along with improving regulatory conditions. The company is committed to prudent balance-sheet management and stable leverage. However, capex requirements will likely remain substantial given Bharti Airtel’s 5G rollout, with a risk that capex will be higher than projected.

Lucror Analytics – Morning Views Asia

By Leonard Law, CFA

  • In today’s Morning Views publication we comment on developments of the following high yield issuers: Longfor Group, Melco Resorts, Sands China, Tata Motors

  • In the US, February nonfarm payrolls increased to 151 k (160 k e / 125 k revised p), albeit the figure came in slightly below estimates. Moreover, the January number was revised downwards to 125 k (143 k p), with the two-month revision at negative 2 k (+100 k p). The unemployment rate edged up to 4.1% (4.0% e / 4.0% p). The average hourly earnings rose 0.3% m-o-m (0.3% e / 0.4% revised p) and 4.0% y-o-y (4.1% e / 3.9% revised p).

  • Fed Chairman Jerome Powell has reiterated that the US central bank is in no rush to reduce rates. He said: “Despite elevated levels of uncertainty, the US economy continues to be in a good place”, adding that “sentiment readings have not been a good predictor of consumption growth in recent years”.

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Mar 11
0

Daily Brief Equity Bottom-Up: Xiaomi (1810 HK): 4Q24 Preview and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Xiaomi (1810 HK): 4Q24 Preview, All Businesses Healthy, But Vehicle Overvalued
  • Alibaba Group’s AI Power Move—Can It Outpace DeepSeek and OpenAI?
  • Sea Ltd (SE US) – Shifting into Overdrive
  • Southern Company: Is The Growth in Southern Power’s Asset Portfolio Sustainable?
  • Seeking Value and Safety in HK/China: SHKP 16 HK
  • Coal India (COAL IN) Value Trap
  • SITC International (1308 HK): Another Strong Year, with Excellent Yield
  • Tech Supply Chain Tracker (11-Mar-2025): Global smartphones in 4Q 2024
  • Cisarua Mountain Dairy (CMRY IJ) – New Variants and Channels
  • China Bans Illumina’s Gene Sequencers Amid Escalating Trade Sanctions

Xiaomi (1810 HK): 4Q24 Preview, All Businesses Healthy, But Vehicle Overvalued

By Ming Lu

  • We believe all business, including smartphone and vehicle, will grow strongly in 4Q24 and 2025.
  • We expect EPS will increase by 15% YoY in 4Q24 and 41% in 2025.
  • However, we believe the market overvalues the newly launched vehicle business.

Alibaba Group’s AI Power Move—Can It Outpace DeepSeek and OpenAI?

By Baptista Research

  • Alibaba Group Holding has made a significant move in the AI space with the release of its latest artificial intelligence model, QwQ-32B, as it seeks to establish itself as China’s leading AI developer, challenging DeepSeek.
  • The model, which excels in mathematical reasoning, coding, and problem-solving, demonstrates capabilities comparable to both DeepSeek’s R1 and OpenAI’s latest technology.
  • However, a key differentiator is its size, as QwQ-32B operates with only 32 billion parameters compared to DeepSeek R1’s 671 billion.

Sea Ltd (SE US) – Shifting into Overdrive

By Angus Mackintosh

  • Sea Ltd booked a blowout set of results, with strong growth and profitability across all three divisions, surpassing previous guidance and bringing about the second profitable year for the company. 
  • E-Commerce was the key feature, with GMV surpassing US$100bn with increasing take rates, with core marketplace GAAP Revenues booking nearly +50% YoY growth in 4Q2024, confirming Shopee’s lead position. 
  • Digital Financial Services and Digital Entertainment also booked strong growth, with management highlighting a positive outlook for all three segments in 2025. Sea Ltd remains a core holding. 

Southern Company: Is The Growth in Southern Power’s Asset Portfolio Sustainable?

By Baptista Research

  • Southern Company reported strong performance for the fourth quarter of 2024, with adjusted earnings per share (EPS) reaching $4.05, marking an 11% growth from the previous year and positioning itself at the top of the 2024 guidance range.
  • This success is attributed to steady investments in state-regulated utilities and the successful management of weather-related impacts.
  • Positives from the earnings report include the addition of 57,000 new residential electric customers and 26,000 new customers in natural gas distribution businesses, reflecting robust growth, particularly in the Southeast.

Seeking Value and Safety in HK/China: SHKP 16 HK

By Jacob Cheng

  • MSCI China has rallied 19% YTD, outperforming DM and EM by 18% and 14% respectively.  We think it makes sense to look at China and Hong Kong again
  • Part of the rally is driven by AI optimism.  In terms of fund flow, we are seeing increasing south-bound fund flow to HK equity market at a fast pace
  • We think Sun Hung Kai Properties, which is a proxy for Hong Kong, may benefit and play the catch up game on the back of very attractive valuation

Coal India (COAL IN) Value Trap

By Rahul Jain

  • COAL’s production growth during Apr-Feb 25 has slowed to 1.5% yoy due to a high base effect and is unlikely to grow significantly in the near future
  • Regulated pricing mechanism means low correlation to international price movements. E-auction (10-12% of volumes) prices crash -25% yoy in line with international trends, impacting profitability
  • Single digit PE is in line with historic multiples. Wage renegotiations due in June 2026, rising coal production from captive producers, surge in renewable capacities are headwinds

SITC International (1308 HK): Another Strong Year, with Excellent Yield

By Osbert Tang, CFA

  • SITC International (1308 HK)‘s 93.5% profit growth in FY24 is at the top-end of the positive profit alert. A final DPS of HK$1.4 put it on a 7.3% dividend yield. 
  • The FY25 long-term contract rate is expected to rise 10%, with volume growing at least 5% and lower costs. The consensus forecast of a 23.1% earnings decline is too conservative. 
  • Having an ROE of 32% for FY25F, its 12-month forward P/B of 2.46x (vs. average of 2.59x) with net cash equals 5.4% of market capitalisation are inexpensive. 

Tech Supply Chain Tracker (11-Mar-2025): Global smartphones in 4Q 2024

By Tech Supply Chain Tracker

  • Global smartphone market expected to see substantial growth in 4th quarter of 2024, indicating a positive trend for the industry.
  • TSMC experiences a drop in revenue in Q1, as AI sector continues to expand and company addresses discrimination allegations.
  • AMD CEO recognizes value of open-source technology in DeepSeek, while HP announces plans to reduce workforce by cutting 2,000 jobs, reflecting industry challenges.

Cisarua Mountain Dairy (CMRY IJ) – New Variants and Channels

By Angus Mackintosh

  • Cisarua Mountain Dairy booked a strong finish to the year in terms of sales growth despite a high base driven by premium consumer foods, but with dairy showing recovery. 
  • The company saw an improvement in gross margins in 4Q2024 driven by the stabilization of raw materials and product mix, but operating margins were impacted by higher promotional spending..
  • Cimory will drive future growth by expanding across channels, especially general trade and with the launch of new products in both dairy and consumer food segments. Valuations remain attractive.

China Bans Illumina’s Gene Sequencers Amid Escalating Trade Sanctions

By Caixin Global

  • China has banned Illumina, the U.S. genomics giant, from exporting gene sequencing machines to the country, escalating sanctions imposed last month when the company was added to Beijing’s Unreliable Entity List.
  • The move is expected to accelerate domestic alternatives in the gene sequencing industry.
  • Illumina, a dominant player in the global gene sequencing industry, has been a major supplier in China since entering the market in 2005. It once held a near-monopoly in the country’s gene sequencing sector before Chinese rival MGI Tech Co. Ltd. emerged in 2015 as a competitor. Since then, the two companies have battled for market share in China while engaging in global patent disputes.

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Mar 11
0

Daily Brief Crypto: End of The “dot-crypto” Era and more

By | Crypto, Daily Briefs

In today’s briefing:

  • End of The “dot-crypto” Era

End of The “dot-crypto” Era

By Etherbridge

  • Our short term view for 2025 was boring or scary.
  • February threw boring out of the window, in less than two months we have seen trade war scares, politicians launching and rug-pulling memecoins, politicians tweeting about crypto strategic reserves, a massive exchange exploit and downside economic surprises.
  • Price action through these events has been scary, at the beginning of February we saw a massive liquidation across cryptoassets, with some remarkable recoveries.

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Mar 11
0

Daily Brief Macro: Asian Equities: Preserving Capital in 2025 – Parallels and Contrasts from 2018 and more

By | Daily Briefs, Macro

In today’s briefing:

  • Asian Equities: Preserving Capital in 2025 – Parallels and Contrasts from 2018
  • The Week Ahead – Tariffs Kick In; Europe Kicks Off With Fiscal Easing
  • Global Commodities: The pain trade
  • US Tariff Uncertainty Will Be Prolonged, but Markets Expect Easier Global Monetary Policy
  • Global FX and EM: Seeking themes with a shelf-life
  • Euro Sentiment Flies Like Icarus
  • Indonesian Rubber Sector Falters As Production, Exports Slide
  • Cocoa Prices Disconnected from Reality? // Breakout Time in Oil and FX
  • 2025 Global Investment Recommendations
  • The Week That Was in ASEAN@Smartkarma – Sea Ltd, Astra International, and Cimory

Asian Equities: Preserving Capital in 2025 – Parallels and Contrasts from 2018

By Manishi Raychaudhuri

  • As the trade war unfolds, more market volatility seems likely. In the 2018 episode China and Korea drove Asian drawdown. But today, China exports far less to America than earlier.
  • The 2025 trade war is more expansive, with larger tariffs being imposed. In 2018, the defensives and non-tradables outperformed. Similar sectors, but not the same markets could do well now.
  • Our Capital Preservation Basket presents eight cheap stocks with domestic revenue exposure and earnings estimate increases over past six months. They are from HK/China (5), Philippines (2) and Korea (1).

The Week Ahead – Tariffs Kick In; Europe Kicks Off With Fiscal Easing

By Nomura – The Week Ahead

  • German fiscal announcement leads to increase in bond yields and euro rally
  • US implements 25% tariffs on Canada and Mexico, additional tariffs on China
  • China retaliates with tariffs on US energy products and adding American firms to unreliable entity list

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Global Commodities: The pain trade

By At Any Rate

  • Brent oil price is currently 7% below fair value with short-term technical indicators in oversold territory
  • Forecast predicts Brent oil to average $73 in 2025, with a surplus in global oil market of 1.3 million barrels per day
  • Market consensus diverges from forecast, with disagreements on oil balances and optimism towards non-OPEC supply growth

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

US Tariff Uncertainty Will Be Prolonged, but Markets Expect Easier Global Monetary Policy

By Said Desaque

  • US equities have struggled to maintain the strong gains from 2024 due to bearish retail sentiment and poor performance of market leaders. Softer US economic data has also undermined sentiment.
  • US tariffs will be disruptive to the global economy.  Their impact on Europe is amplified by geopolitical tensions, while US core inflation trends will impact Fed policy conduct.
  • Foreign central banks will ease their respective policy rates due to the imposition of US tariffs, while the exact magnitude of easing will be determined by their severity and timing.

Global FX and EM: Seeking themes with a shelf-life

By At Any Rate

  • Recent news of a fiscal U turn in Germany has been a game changer, with a proposal for a large infrastructure fund and increased defense spending
  • This shift in European fiscal policy has led to a more constructive view on the Euro dollar, with potential for it to reach 112 to 114 area
  • Regional investment focus on cheap high beta candidates within the euro bloc, with potential for the broad dollar to be biased to the downside due to US exceptionalism fading and European growth stepping up

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Euro Sentiment Flies Like Icarus

By Phil Rush

  • Resilient data led to hawkish monetary policy guidance, consistent with our bullish Euro view. Fiscal announcements have super-charged that move, so we dropped our call.
  • European Commission statements are an upper bound on loosening while Germany’s plans are not yet legislated. Extra defence spending on imports will also damp the Euro.
  • Sentiment has flown too high. US trade policy seems set to hit Europe soon, potentially melting sentiment and sending the Euro plummeting back to Earth like Icarus.

Indonesian Rubber Sector Falters As Production, Exports Slide

By Vinod Nedumudy

  • Output hits 2.04 million tons and exports 1.6 million tons in 2024  
  • ANRPC anticipates Indo rubber production to slip by 9.8% in 2025  
  • Chinese tire firms pitching tent in Indo may benefit from trade war

Cocoa Prices Disconnected from Reality? // Breakout Time in Oil and FX

By The Commodity Report

  • Breakout Time in Oil and FX During the last week there occurred many breakout patterns as the volatility in financial markets has risen significantly after president Trump introduced tariffs on Mexico and Canada.
  • The Ukraine-drama also doesn’t really help to calm market participants at the moment either.
  • We just highlight the technical pattern and add a few words about our current framework and how we view these markets at the moment. 

2025 Global Investment Recommendations

By Sharmila Whelan

  • From a business cycle perspective, Trading Post is overweight global equities, and underweight sovereign bonds. Within global equities the bias is towards growth and momentum stocks.
  • In favour are industrials, energy, European & US defence, tech hardware companies and consumer discretionary in the second half of the year, along with export cyclicals.
  • Expect the Fed to cut interest rates once this year and the ECB by 125bp in total and for the BoJ to raise by 75bp. 

The Week That Was in ASEAN@Smartkarma – Sea Ltd, Astra International, and Cimory

By Angus Mackintosh

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Mar 11
0

Most Read: Nikkei 225, Japan Post Bank, Sigma Healthcare, Seven & I Holdings, DoorDash , SK Innovation, TKO Group Holdings , BYD, Makino Milling Machine Co and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Index Rebalance Strategy YTD Performance: Not Many Places to Hide in Asia
  • Japan Post Bank (7182 JP) – Not Cheap Enough Vs Others, or Holdings
  • S&P/​​​​ASX Index Rebalance (Mar 2025): SIG Is the BIG One; Changes Galore Across Indices
  • 7&I (3382) – Artisan Writes (Again) And 7&I Updates (Again) – More Positive Outlook Now
  • S&P500/400/600 Index Rebalance: DASH In as Stability Trumps Volatility
  • Got the BBIG Rebalancing Results: SK Innovation Is the Trade This Week
  • Select Sector Indices and S&P Equal Weight Rebalance: US$16.3bn Trade; Big Impact for EXE, TKO
  • Seven & I Holdings (3382 JP): Reading Between the Lines of the Public Letter
  • ECM Weekly (10th Mar 2025) – BYD, Japan Post, Mixue, Sanhua, Chifeng, Nanshan, Goertek, Travel Food
  • Makino Milling Machine (6135 JP): A White Knight Bidder Is Emerging

Index Rebalance Strategy YTD Performance: Not Many Places to Hide in Asia

By Brian Freitas

  • We look at the performance of the index rebalance strategy over the year using weekly forecasts. In short, it has been a mixed bag for Asia.
  • India and China have been among the worst performing markets in the region while Australia and Korea have been among the better performers.
  • A lot of the outperformance appears to be front loaded, so getting the forecasts right early in the review period is of paramount importance.

Japan Post Bank (7182 JP) – Not Cheap Enough Vs Others, or Holdings

By Travis Lundy

  • The Offering of Japan Post Bank (7182 JP) is not taking place the way “the right pattern” would suggest, but last time was kind of special. This time is different.
  • Last time was a “second IPO” and coincided with a US regional bank crisis. This time the offering is smaller outright, and much smaller as a portion of float. 
  • Pricing is Monday. It hasn’t moved much vs JPH. It needs to move more to be attractive. And there is still a bit of overhang to come.

S&P/​​​​ASX Index Rebalance (Mar 2025): SIG Is the BIG One; Changes Galore Across Indices

By Brian Freitas

  • There are 2 changes for the S&P/ASX50 Index, 2 changes for the S&P/ASX100 Index, 7 changes for the S&P/ASX200 Index and 11 adds/ 7 deletes for the S&P/ASX300 Index.
  • There is a huge increase in the number of index shares for Sigma Healthcare (SIG AU), triggering passive buying of nearly A$1.4bn at the close on 21 March.
  • The adds have outperformed the deletes across all indices. Positioning varies across stocks and there could be some big movers over the next few days.

7&I (3382) – Artisan Writes (Again) And 7&I Updates (Again) – More Positive Outlook Now

By Travis Lundy

  • On Thursday 6 March we got a Nikkei article then a company announcement for Seven & I Holdings (3382 JP)‘s proposed management measures and update on ACT Bid Process.  
  • It involved Isaka-san stepping down, Stephen Dacus stepping up, selling York to Bain for ¥814.7bn, IPOing 7-Eleven US, a ¥2trln share buyback over 5yrs, and ACT process update. 
  • It was OK. Good, bad, and ugly. But Artisan wrote a letter over the weekend and 7&i responded and suddenly, their concerns are mostly addressed and the outlook is different.

S&P500/400/600 Index Rebalance: DASH In as Stability Trumps Volatility

By Brian Freitas

Got the BBIG Rebalancing Results: SK Innovation Is the Trade This Week

By Sanghyun Park

  • Real alpha? Tight basket means outsized passive flows. The play? SK Innovation, no contest.
  • Samsung SDI faces -0.54x ADTV outflows. Other movers: Netmarble 0.68x, Wemade Max 0.54x, NHN -0.46x ADTV.
  • Net-Net? SK Innovation is the trade. Long here, hedge short on Samsung SDI or the broader Battery space.

Select Sector Indices and S&P Equal Weight Rebalance: US$16.3bn Trade; Big Impact for EXE, TKO

By Brian Freitas

  • Constituent changes to the S&P500 INDEX and capping changes will result in a round-trip trade of US$16.3bn across the Select Sector indices and the S&P500 Equal Weight Index.
  • The Select Sector index trackers and S&P500 Equal Weight trackers will need to buy the adds to the S&P500 INDEX and sell the deletes, further increasing flow for the stocks.
  • The flows will change over the next week as stock prices move around, and final capping is done after the close on 14 March.

Seven & I Holdings (3382 JP): Reading Between the Lines of the Public Letter

By Arun George

  • The Seven & I Holdings (3382 JP) Board has released a public letter to address Artisan Partners’ letter and provide more details on the Alimentation Couche-Tard (ATD CN) constructive engagement. 
  • The letter effectively addresses most of Artisan’s concerns. The Board is engaging with Couche-Tard, particularly by agreeing on a strategy to find a solution to secure antitrust approvals. 
  • However, the statement suggests that the Board retains deep scepticism that the Couche-Tard is viable and is manoeuvring to shift the blame on a failed bid on a flawed proposal. 

ECM Weekly (10th Mar 2025) – BYD, Japan Post, Mixue, Sanhua, Chifeng, Nanshan, Goertek, Travel Food

By Sumeet Singh

Makino Milling Machine (6135 JP): A White Knight Bidder Is Emerging

By Arun George

  • Makino Milling Machine Co (6135 JP) has disclosed that it has received initial letters of intent from multiple third parties, reportedly private equity funds, to launch a competing tender offer.
  • My analysis suggests that a white knight bid could be as high as JPY13,284, 20.8% higher than Nidec’s JPY11,000 offer and 10.2% higher than the last close price of JPY12,050.
  • Nidec Corp (6594 JP) will take a wait-and-see approach. However, regardless of whether a white knight bidder emerges, Nidec will eventually have to bump.

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Mar 11
0

Daily Brief Australia: Insignia Financial, S&P/ASX 200 and more

By | Australia, Daily Briefs

In today’s briefing:

  • Insignia Financial (IFL AU): Bain and CC Capital Bumps to A$5.00, While Brookfield Drops Out
  • S&P/ASX 200 Index Outlook Post-Rebalance

Insignia Financial (IFL AU): Bain and CC Capital Bumps to A$5.00, While Brookfield Drops Out

By Arun George

  • On 7 March, Insignia Financial (IFL AU) disclosed a revised non-binding privatisation offer from Bain and CC Capital at A$5.00, an 8.7% premium to their previous A$4.60 offer.
  • The exclusive due diligence period ends on 17 April (six weeks from signing the exclusivity deed). The Board will recommend a binding offer of at least A$5.00. 
  • The offer is attractive compared to historical trading ranges, peer multiples and precedent transactions. Therefore, a binding offer would gain shareholder support.

S&P/ASX 200 Index Outlook Post-Rebalance

By Nico Rosti

  • The S&P/ASX 200 (AS51 INDEX) has suffered a continuous sell-off for the past 3 weeks. The index is deeply oversold, our model predicts an imminent reversal.
  • The reversal could lift the index to the 8091-8208 price area, but the index may start to fall again after that.
  • As posted by Brian Freitas there has been 7 changes for the S&P/ASX 200 (index rebalance), read his insight for further details on this.

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