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Smartkarma Daily Briefs

Jan 29
0

Daily Brief Thematic (Sector/Industry): DeepSeek R1. Ahem and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • DeepSeek R1. Ahem, This Is Awkward..
  • Ohayo Japan | AI Anxiety Fades (For Now)
  • Japan Morning Connection: US Tech and Semi Rebound Feel’s like a Dead Cat Bounce
  • Semiconductor’s Over-Dependency on AI
  • Singapore Banks: Singapore’s Financial Powerhouses Capitalizing on the City’s Continued Rise
  • India’s Inflation Eases to 5.22%: What Does It Mean for the Economy?
  • Japan Consumer Markets: What’s Next?
  • # India Insight 92: Adani Faces Deal Revocation, Reliance Buys SIL, Premium Products Thrive
  • Singapore Market Roundup (28-Jan-2025): Suntec REIT’s FY2024 uncertain, lower estimates for FY2025-FY2026.
  • Thematic Report: How Indian Hotel Sector Is Bucking the Trend of Slowdown?

DeepSeek R1. Ahem, This Is Awkward..

By William Keating

  • DeepSeek’s R1 is a game changer that’s taken the world by storm. It’s a fantastic accomplishment by a Chinese team and a huge endorsement of the open source approach
  • US competitors have egg on their faces now, but they will adapt. Competition is always a good thing & the future of AI just got a whole lot brighter
  • Last night’s selloff was a Chinese New Year gift. Just accept it. Happy CNY to all!

Ohayo Japan | AI Anxiety Fades (For Now)

By Mark Chadwick

  • The Nasdaq jumped over 2% – Nvidia surged nearly 9%, leading the rally after shedding $589 billion in market value the previous session. 
  • The U.S. Federal Reserve’s FOMC decision and Chair Jerome Powell’s press conference will be closely watched. Earnings from Tesla, Meta Platforms, and Microsoft are also in focus
  • Sumitomo Heavy has acquired French semiconductor equipment manufacturer LASSE, bolstering its European presence and global semiconductor business

Japan Morning Connection: US Tech and Semi Rebound Feel’s like a Dead Cat Bounce

By Andrew Jackson

  • Limited breadth of winners, even in the SOX, with numerous DeepSeek and capex questions outstanding.
  • Regardless expect JP SPE to be higher to start; watch Advantest into numbers today after its -19% 2-day drop.
  • IT/SaaS companies are worth a look here with AI R&D costs now potentially much lower including Fujitsu and NEC.

Semiconductor’s Over-Dependency on AI

By Jim Handy

  • A new AI platform named DeepSeek threatens today’s Large Language Model status quo
  • Certain chip companies have become over-dependent on AI, including Nvidia, Samsung, SK hynix, and Micron, and their stock has tumbled
  • It’s too early to tell what will occur over the long term

Singapore Banks: Singapore’s Financial Powerhouses Capitalizing on the City’s Continued Rise

By Kilde

  • Singapore banks are earning record profits, driven by elevated net interest margins and rising fee income.
  • Assets under management (AUM) grew significantly in 2024 for Singapore’s banks. DBS leads with S$401bn of AUM as of 3Q24 (+13.6% YoY), while OCBC reported S$284bn of AUM (+5.2% YoY), and UOB reached S$186bn.
  • Total non-interest income for DBS, OCBC, and UOB in 3Q24 rose 29% YoY to over S$5bn combined.

India’s Inflation Eases to 5.22%: What Does It Mean for the Economy?

By Nimish Maheshwari

  • India’s retail inflation dipped to a four-month low of 5.22% in December 2024, aided by moderating food prices and stable core inflation below 4%.
  • Although food inflation subsided, especially in vegetables, prices remain elevated, keeping inflation above the 4% RBI target and impacting monetary policy decisions and household spending.
  • With structural shifts in CPI weightage and strong agricultural prospects, inflation looks more manageable, suggesting cautious optimism but underscoring the RBI’s readiness to adjust rates if pressures resurface.

Japan Consumer Markets: What’s Next?

By Michael Causton

  • On the surface, Japan is burdened with an ageing, declining population and a consumer economy where inflation is the only important topic of conversation. 
  • But this belies the fact that the shops are full and retailers are, on the whole, more profitable than ever.
  • Households remain wealthy with growing stocks of savings and 2025 will be all about unlocking this money.

# India Insight 92: Adani Faces Deal Revocation, Reliance Buys SIL, Premium Products Thrive

By Sudarshan Bhandari

  • Sri Lanka revokes a power purchase agreement with Adani Group amidst corruption allegations. While the group denies the accusations, the new government is reevaluating the project.
  • Reliance Consumer Products acquires SIL Food India, a packaged foods brand, to strengthen its FMCG portfolio and to compete with giants Hindustan Unilever (HUVR IN)  and Tata Consumer Products (TATACONS IN).
  • Despite inflation, demand for premium products like groceries, spirits, clothing, and shoes remains strong, especially in cities. 

Singapore Market Roundup (28-Jan-2025): Suntec REIT’s FY2024 uncertain, lower estimates for FY2025-FY2026.

By Singapore Market Roundup

  • Suntec REIT’s future outlook uncertain, with analysts predicting lower estimates for FY2025-FY2026.
  • OUE REIT’s performance post FY2024 results continues to divide opinions amongst analysts.
  • DBS maintains ‘buy’ rating and $3 target price for Seatrium, while reporting weak overseas assets for MPACT in 3QFY2025.

Thematic Report: How Indian Hotel Sector Is Bucking the Trend of Slowdown?

By Nimish Maheshwari

  • India’s economy is facing a temporary slowdown but there is one sector which ditched the slowdown trend 
  • The leader of sector just said their upcoming quarter Q4FY25 will be similar to Q3FY25.
  • The hotel sector is slowly turning into a non-cyclical sector from a cyclical sector.

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Jan 29
0

Daily Brief Technical Analysis: S&P 500 Testing Prior Breakout Level; Market Dynamics Remain Healthy Despite AI-Linked Weakness and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • S&P 500 Testing Prior Breakout Level; Market Dynamics Remain Healthy Despite AI-Linked Weakness

S&P 500 Testing Prior Breakout Level; Market Dynamics Remain Healthy Despite AI-Linked Weakness

By Joe Jasper

  • DeepSeek appears to have turned the chatbot market upside-down, putting pressure on AI-linked stocks. The dust has yet to settle, but the selloff has been largely contained to AI-linked stocks.
  • The rest of the market did not seem to care; the equal-weighted S&P 500 was roughly flat yesterday.
  • Additionally, market dynamics remain healthy. Bottom line: as long as the S&P 500 remains above 5600-5670, our long-term outlook remains bullish.

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Jan 29
0

Daily Brief Credit: Lucror Analytics – Morning Views Asia and more

By | Credit, Daily Briefs

In today’s briefing:

  • Lucror Analytics – Morning Views Asia

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: Adani Energy Solutions, China Water Affairs, Anton Oilfield, Tata Steel, China Vanke
  • In the US, December 2024 new-home sales rose 3.6% m-o-m (1.7% e / 9.6% revised p) to an annualised 698 k units. Full-year newhome sales were up 2.5% y-o-y at 683 k units, with the median sale price rising 2.1% to USD 427 k.
  • Treasuries rallied on haven demand amid a sell-off in equities, as well as on the back of a strong 5Y notes auction. The yield on the 2Y UST declined 7 bps to 4.20%, while the yield on the 10Y UST fell 9 bps to 4.54%.

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Jan 29
0

Daily Brief ECM: Dr Agarwal’s Healthcare IPO – RHP Updates & Quick Thoughts on Peer Comp and Valuation and more

By | Daily Briefs, ECM

In today’s briefing:

  • Dr Agarwal’s Healthcare IPO – RHP Updates & Quick Thoughts on Peer Comp and Valuation
  • Smithfield Foods Inc (SFD): IPO Opens with Heavy Selling Pressure, Closes Below Issue
  • Ather Energy Pre-IPO – The Positives – One of the E2W Pioneers
  • Titan America (TTAM): Cement Producer Seeking IPO Valuation North of $3bn, Set for February Debut
  • Beta Bionic Inc (BBNX): Bullish IPO Roadshow Moves Underwriters to Amend Offering Size and Range
  • Goertek Microelectronics Pre-IPO Tearsheet
  • Seoul Guarantee Insurance Pre-IPO Updated Thoughts on Valuation – Weaker Performance than Expected

Dr Agarwal’s Healthcare IPO – RHP Updates & Quick Thoughts on Peer Comp and Valuation

By Akshat Shah

  • Dr Agarwal’s Health Care Ltd (8140044Z IN) is looking to raise about US$350m in its India IPO. The deal is downsized from an earlier reported size of around US$480m.
  • Dr Agarwal’s Health Care is a healthcare/hospital chain in India providing eyecare services, including surgeries; consultations, diagnoses, non-surgical treatments; and sells opticals, contact lens, accessories and eyecare related pharmaceutical products.
  • Previously, we have looked at the company’s past performance. In this note, we provide a summary of its RHP updates and share our quick thoughts on peer comparison and valuation.

Smithfield Foods Inc (SFD): IPO Opens with Heavy Selling Pressure, Closes Below Issue

By IPO Boutique

  • The company  priced a downsized transaction of 26.08mm shares (down from 34.8mm) at $20.00 (original range $23-$27) and opened at $21.05 for a gain of 5.3% at first trade.
  • A broken IPO usually hurts the psyche of the IPO market in the short term.
  • The healthcare space will be looking to give IPOs a boost during the second half of the week with much stronger deals set to debut.

Ather Energy Pre-IPO – The Positives – One of the E2W Pioneers

By Sumeet Singh

  • Ather Energy is looking to raise about US$536m in its upcoming India IPO. 
  • Ather is a pure play electric vehicle company in India designing and developing E2Ws, battery packs, charging infrastructure, associated software and accessories, also manufacturing battery packs and assembling E2Ws in-house.
  • In this note, we talk about the positive aspects of the deal.

Titan America (TTAM): Cement Producer Seeking IPO Valuation North of $3bn, Set for February Debut

By IPO Boutique

  • Titan America is a leading vertically integrated, multi-regional manufacturer and supplier of heavy building materials and services sets terms for its IPO. 
  • Citigroup and Goldman Sachs are leading the IPO that could raise north of $400m. 
  • The IPO is scheduled to debut on February 7th with the parent, Titan Cement, offering 62.5% of the shares in this offering. 

Beta Bionic Inc (BBNX): Bullish IPO Roadshow Moves Underwriters to Amend Offering Size and Range

By IPO Boutique

  • The underwriters amended the terms of this offering with a S-1/A on Tuesday morning.
  • With the updated terms, the company could raise as much as $170 million at the high-end of the new range. 
  • We have updated our first day forecast given the bullish momentum during the roadshow. 

Goertek Microelectronics Pre-IPO Tearsheet

By Nicholas Tan

  • Goertek Inc A (002241 CH) is looking to raise up to US$400m in its upcoming Hong Kong IPO. The deal will be run by CICC, CSI, CMB and UBS.
  • It is a world-leading provider of smart sensing interaction solutions.
  • Anchored by its robust one-stop smart sensing interaction platform, the firm is dedicated to driving the transformation of next-generation smart sensing interactions in collaboration with global ecosystem partners.

Seoul Guarantee Insurance Pre-IPO Updated Thoughts on Valuation – Weaker Performance than Expected

By Clarence Chu

  • Seoul Guarantee Insurance (031210 KS) is looking to raise around US$155m in its Korean IPO. 
  • Seoul Guarantee Insurance (SGI) is a guarantee insurance firm operating predominantly in Korea.
  • In this note, we discuss its recent financials, and share our updated thoughts on valuation.

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Jan 29
0

Daily Brief Event-Driven: 3D Launches Partial Tender Offer on NTT UD REIT (8956) and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • 3D Launches Partial Tender Offer on NTT UD REIT (8956)
  • NTT UD REIT (8956 JP): 3D’s Unsolicited Partial Tender Offer
  • Solactive Global Uranium & Nuclear Components Index Rebalance: DeepSeek Led Selloff & 1 Delete
  • Fast Retailing (9983 JP): Double Capping & The Reverse Funding Trade
  • Japfa (JAP SP): The Santosa Family (Finally) Makes A Move
  • SLB Dev (SLB SP): Ong Family Offer By Way Of A Scheme.
  • Shandong Hi-Speed New Energy (1250 HK)’s Unconditional MGO Now Open
  • Venture Global (VG US): Excluded from Global & US Indices Despite $50B Market Cap
  • Red Hawk (RHK AU): Fortescue’s Off-Market Offer
  • Dada Nexus (DADA US): JD.Com’s US$2/ADS Non-Binding Offer

3D Launches Partial Tender Offer on NTT UD REIT (8956)

By Travis Lundy

  • Seemingly out of the blue, Singapore-based activist investment fund 3D Investment Partners has launched a partial tender offer at a small premium on NTT UD REIT Investment Corporation (8956 JP). 
  • 3DIP currently owns 2.2% and at maximum, will own 15.00% of the REIT units outstanding less treasury units. It intends to own the units for “pure investment purposes.”
  • “Shareholder” structure is different for J-REITs vs companies. And this J-REIT has an interesting future possibility. But…

NTT UD REIT (8956 JP): 3D’s Unsolicited Partial Tender Offer

By Arun George

  • 3D has announced an unsolicited partial tender offer for NTT UD REIT Investment Corporation (8956 JP) at JPY131,890 per unit, a 10.0% premium to the undisturbed price.  
  • The minimum number of units to be purchased is 115,279 (7.80% ownership ratio), and the maximum number of units to be purchased is 189,128 (12.80% ownership ratio).
  • The modest premium and an implied P/NAV <1x suggest a lightish offer. 3D will have to rethink terms as shares are trading through terms. 

Solactive Global Uranium & Nuclear Components Index Rebalance: DeepSeek Led Selloff & 1 Delete

By Brian Freitas

  • Solactive has announced the constituent changes for the Global Uranium & Nuclear Components Index. There is only 1 delete with implementation at the close on 31 January.
  • As expected, GoviEx Uranium (GXU CN) will be deleted from the index and there will be a bunch of capping changes, especially for non-pure play stocks.
  • Estimated one-way turnover is 5.8% resulting in a round-trip trade of US$386m. There are many stocks with multiple days of ADV to trade.

Fast Retailing (9983 JP): Double Capping & The Reverse Funding Trade

By Brian Freitas

Japfa (JAP SP): The Santosa Family (Finally) Makes A Move

By David Blennerhassett

  • Back in March of last year, Bloomberg reported,that Renaldo Santosa and his family, who collectively controlled ~75.5% of agri-play Japfa Ltd (JAP SP), were considering taking Japfa private.
  • This was discussed in Japfa (JAP SP): Impressive Gain. But No Firm Offer. Then crickets. 
  • The family has now pitched an Offer of S$0.62/share, by way of  a Scheme, a 34.8% premium to undisturbed. That’s probably enough to get this over the line. 

SLB Dev (SLB SP): Ong Family Offer By Way Of A Scheme.

By David Blennerhassett

Shandong Hi-Speed New Energy (1250 HK)’s Unconditional MGO Now Open

By David Blennerhassett

Venture Global (VG US): Excluded from Global & US Indices Despite $50B Market Cap

By Dimitris Ioannidis

  • Venture Global (VG US) is forecasted to fail fast-entry to S&P TMI due to insufficient fcap but is expected to be added at the March 2025 review.
  • Venture Global (VG US) is expected to be excluded from Global & US indices due to low fcap and public voting rights mainly caused by the company’s unlisted shares. 
  • The probability of inclusion in Global & US indices increases exponentially with the selling of Class B shares by Venture Global Partners.

Red Hawk (RHK AU): Fortescue’s Off-Market Offer

By David Blennerhassett

  • Via an off-market offer, Fortescue Metals (FMG AU)is aiming to purchase all shares of iron-ore play Red Hawk Mining (RHK AU) at A$1.05/share, a 28% premium to last close.
  • If Fortescue secures at least 75% of Red Hawk’s shares within seven days, the Offer Price increases to A$1.20/share, a 46% premium to last close
  • Fortescue’s focus is on Red Hawk’s Blacksmith iron ore project, located ~30 kilometers west of Fortescue’s own Solomon project.

Dada Nexus (DADA US): JD.Com’s US$2/ADS Non-Binding Offer

By David Blennerhassett

  • On the 27th January, Dada Nexus (DADA US), a Chinese on-demand retail and delivery platform, announced a preliminary non-binding proposal from JD.com (9618 HK).
  • JD.com, a 63.2% shareholder, is offering US$0.50/share (US$2.00/ADS), a 42% premium to last close. Should a definitive agreement be inked, this is done. 
  • DADA has formed a committee to evaluate the proposal. The risk to the trade, as with many US-listed China plays, is one of timing. Trading at a 11.1% gross spread.

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Jan 29
0

Daily Brief Equity Bottom-Up: Rise of DeepSeek – Impact on SK Hynix and Other Major Korean Stocks and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Rise of DeepSeek – Impact on SK Hynix and Other Major Korean Stocks
  • Memory Monitor: Is DeepSeek a Problem for SK Hynix & Micron’s HBM DRAM Growth?
  • Taiwan Dual-Listings Monitor: Dramatic Spreads Open Up After DeepSeek Rout & Taiwan Market Closure
  • Bund Center Investment (BTE SP): A Dominant Real Estate Play on the Bund
  • The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (January 25)
  • TSMC Forced Underweight, Alibaba Value Trap?
  • Azeus Systems (AZEUS SP): Defensive B2B SaaS Developer with Accelerating Growth
  • The Beat Ideas: Frontier Springs, A Proxy Play to Capitalizing on Indian Railway Capex Boom
  • NVIDIA & The DeepSeek Effect: A Historic $600B Crash But Is This Here To Stay?
  • Hyphens Pharma (HYP SP): ASEAN’S Leading Specialty Pharma Company

Rise of DeepSeek – Impact on SK Hynix and Other Major Korean Stocks

By Douglas Kim

  • DeepSeek has been the biggest story in the global markets in the past couple of weeks.
  • In this insight, we discuss how the rise of DeepSeek could impact the share prices of the major AI related companies in Korea including SK Hynix (000660 KS). 
  • The top five Korean companies that could be negatively impacted by the rise of DeepSeek include SK Hynix, Hanmi Semiconductor, SK Square, HD Hyundai Electric, and LS Electric. 

Memory Monitor: Is DeepSeek a Problem for SK Hynix & Micron’s HBM DRAM Growth?

By Vincent Fernando, CFA

  • SK Hynix Expects 100% HBM Revenue Growth in 2025E After a Massive 2024 — Which Means Traditional DRAM Doesn’t Matter as Much Anymore
  • DeepSeek Market Fears — A Problem for HBM & Enterprise SSD Memory?
  • AI Industry Opportunities Are Not a Fixed Size Pie — Will DeepSeek Impact HBM DRAM TAM? Why We Don’t Think So

Taiwan Dual-Listings Monitor: Dramatic Spreads Open Up After DeepSeek Rout & Taiwan Market Closure

By Vincent Fernando, CFA

  • TSMC: 10.8% Premium; Taiwanese Investors Likely to Be Less Shocked by DeepSeek News?
  • UMC: -7.3% Discount; The Latest Extreme Discount Cannot Be Sustained
  • ASE: -10.2% Discount; This Extreme Discount Also Cannot Be Sustained

Bund Center Investment (BTE SP): A Dominant Real Estate Play on the Bund

By Kilde

  • Bund Center Investment (BCI) is a diversified investment vehicle with two commercial real estate assets: the landmark Westin Bund Center Hotel, and its premium office space, Bund Center Office Tower in Shanghai.
  • BCI operates under two business segments: Hotel Operations and Property Leasing.
  • Despite short-term hurdles, long-term economic growth in China provides a supportive backdrop.

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (January 25)

By David Mudd

  • The HSTECH index is trading higher on higher breadth and momentum in January, up 6% so far.  Analysts project an upside of 23% over 12 months.
  • China’s semiconductor sector is advancing this year from AI enthusiasm and accelerated localization in the chip industry.  Semiconductor Manufacturing International Corp (SMIC) (981 HK) shares have benefited from this trend.
  • Sunny Optical Technology Group (2382 HK) benefits from China’s announcement that it will subsidize more consumer products, including smartphones and new vehicles.

TSMC Forced Underweight, Alibaba Value Trap?

By Steven Holden

  • TSMC hit a record high average fund allocation of 9.07% at the end of last year, yet EM funds switched to a sizeable underweight of -1.47% throughout the year.
  • Active UCITS funds become forced sellers as weights hit 10%, with non-UCITS selling in to strength as weights rise on strong performance.
  • EM Value funds maintain an overweight in Alibaba, the only Style group to do so. Alibaba is now the most widely held stock for Value funds alongside TSMC and Samsung.

Azeus Systems (AZEUS SP): Defensive B2B SaaS Developer with Accelerating Growth

By Kilde

  • Azeus Systems Holdings Ltd. (SGX: AZEUS SP) is a leading global IT solutions provider with over 30 years of experience, specializing in board governance and digital transformation solutions. The company’s flagship product, Convene, serves boardrooms and executive teams across more than 100 countries, with additional offerings like Convene AGM, Convene Records, and Convene ESG, tailored to meet specific enterprise needs.
  • Two Business Segments: Azeus Products and IT Services. These segments cater to a diverse clientele with tailored solutions that address specific operational and strategic needs of Azeus’s clients. Azeus Products account for the lion’s share of revenue, at 81% as shown below.
  • Convene Flagship Product: Convene is a leading board governance solution for boardrooms and executives, offering secure document sharing, real-time collaboration, voting tools, analytics, and workflow automation to streamline decision-making. Its user-friendly interface and mobile compatibility make it popular among enterprises and governments. Azeus also offers additional Convene-branded products for specific use cases.

The Beat Ideas: Frontier Springs, A Proxy Play to Capitalizing on Indian Railway Capex Boom

By Sudarshan Bhandari

  • Frontier Springs (FS IN) is poised for growth, driven by India’s robust railway sector expansion and increased demand for LHB coaches which is reflected in their expanding margins and profitability.  
  • Company is aiming for 250Cr by FY25 and 500Cr by FY27 with sustainable margins for 18-20%.
  • Company is completely booked for next 6-8 months and air spring division is booked completely for next year. Also looking for acquisition in the segment. 

NVIDIA & The DeepSeek Effect: A Historic $600B Crash But Is This Here To Stay?

By Baptista Research

  • NVIDIA, the global leader in AI hardware, has recently faced unprecedented turbulence in the market, shedding nearly $600 billion in market capitalization in a single day—an event that has sent shockwaves through the tech and investment communities.
  • The catalyst for this dramatic drop?
  • DeepSeek, a relatively new Chinese AI startup that has stunned the industry by developing a highly efficient and cost-effective AI model, DeepSeek R1.

Hyphens Pharma (HYP SP): ASEAN’S Leading Specialty Pharma Company

By Kilde

  • Hyphens Pharma (HYP SP EQUITY) is Singapore’s leading specialty pharmaceutical and consumer healthcare group, leveraging on its diverse footprints in ASEAN countries. Its core business lies in three segments: Specialty Pharma Principals, Proprietary Brands, and Medical Hypermart and Digital.
  • Based on its scalable business model, direct access to the five countries in the southeast Asia region enabling it to capture health expenditure growth in ASEAN countries, sustainable growth from both in-house product innovation and in-licensing cooperation, as well as realization of DocMed’s potential when rolling out the digital platform to other ASEAN markets, Hyphens Pharma will demonstrate sustainable growth momentum and optimistic investment value in the future.
  • Revenue in 2024 full year is expected to show a strong rebound compared to 2023.

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Jan 29
0

Daily Brief Macro: How Oaktree’s Howard Marks Spots a Market Bubble and more

By | Daily Briefs, Macro

In today’s briefing:

  • How Oaktree’s Howard Marks Spots a Market Bubble
  • AI: Attack Of The Clones
  • [US Nat Gas Options Weekly 2025/04] Henry Hub Rose Due to Robust LNG Exports and Cold Weather
  • Trump Inauguration and Markets
  • [US Crude Oil Options Weekly 2025/04] WTI Slips as Trump Advocates Higher Output, Trade Tariffs
  • GEM Fund Positioning: The Big Rotations in 2024.
  • EM Fund Positioning: GCC a Key Focus for EM Investors in 2025
  • Active GEM Funds: The Small Cap Effect

How Oaktree’s Howard Marks Spots a Market Bubble

By Odd Lots

  • Howard Marks correctly called the dot com bubble in the early 2000s
  • The 1990s were a placid period for credit investors but a hot time for equity investors
  • Being too far ahead of your time in predicting market trends can be painful and indistinguishable from being wrong

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

AI: Attack Of The Clones

By Phil Rush

  • AI investors were shocked by China’s DeepSeek successfully matching the performance of OpenAI’s GP4-o1 at a fraction of the build cost and despite export restrictions.
  • Innovating a more productive use of capital does not negate the potential gains from increasing processing power. Either way benefits the economy with faster AI progress.
  • Foundation model IP needs better protection against the attack of cloning distillation techniques to reap a return on investment while pushing the performance frontier.

[US Nat Gas Options Weekly 2025/04] Henry Hub Rose Due to Robust LNG Exports and Cold Weather

By Suhas Reddy

  • For the week ending 24/Jan, U.S. natural gas prices gained 2% amid volatility driven by colder weather forecasts and increasing LNG exports.
  • Henry Hub Put/Call volume ratio fell to 1.05 from 1.18 (17/Jan) the previous week as call volumes rose by 7.2% WoW, while put volumes declined by 4.3%. 
  • Henry Hub OI PCR inched up to 0.93 from 0.92 from last week. Call OI grew by 4.4% WoW, while put OI increased by 5.5%.

Trump Inauguration and Markets

By Alex Ng

  • Global markets will be driven by policies and current valuation in 2025, especially new Trump administration policies.  
  • Trump could jawbone markets for a lower value of the USD and lower oil prices, which could have a temporary modest impact (joint US/Japan FX intervention is possible)
  • But the structural drivers are much more important.  Meanwhile, an overvalued U.S. equity market is vulnerable to a 2018 style correction on any major bad news that could then trigger

[US Crude Oil Options Weekly 2025/04] WTI Slips as Trump Advocates Higher Output, Trade Tariffs

By Suhas Reddy

  • WTI futures fell by 3.5% for the week ending 24/Jan on the back of downward pressure from Trump’s hydrocarbon output policies and brewing trade disputes.
  • WTI options Put/Call volume ratio fell to 0.85 from 1.28 (17/Jan) last week, as call volume rose by 8.3% WoW while put volume decreased by 28.4%.  
  • WTI OI PCR rose to 1.01 from 1.00 last week. Call OI rose by 5.7% WoW and put OI increased by 7.3%.

GEM Fund Positioning: The Big Rotations in 2024.

By Steven Holden

  • India Real Estate, South Korea Financials and Turkey Financials see big increases in ownership in 2024.
  • South Korea Materials, China Technology and China Health Care saw investment levels decline.
  • Sk Hynix saw the largest increase in fund ownership, but which stocks saw large decreases, and which look set for a promising 2025?

EM Fund Positioning: GCC a Key Focus for EM Investors in 2025

By Steven Holden

  • Exposure levels and ownership reaches record highs for active GEM funds in GCC countries, yet 30% of funds remain without exposure.
  • Saudi Arabia and the United Arab Emirates dominate the ownership picture, with both at record high investment levels, driven by the Financials and Real Estate sectors
  • Al Rajhi Bank is the most widely held stock, with a top tier including Emaar Properties and Aldar Properties surging to record levels of investment in 2024.

Active GEM Funds: The Small Cap Effect

By Steven Holden

  • Small cap Emerging Market funds have outperformed their large-cap peers over the past 10 years.
  • Yet small and midcap exposure decreased to near record levels last year, in spite of managers maintaining an overweight position versus the benchmark.
  • We screen for well owned and small/midcap stocks that are showing strong momentum among managers.

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Jan 29
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Daily Brief South Korea: SK Hynix, Seoul Guarantee Insurance and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Rise of DeepSeek – Impact on SK Hynix and Other Major Korean Stocks
  • Seoul Guarantee Insurance Pre-IPO Updated Thoughts on Valuation – Weaker Performance than Expected

Rise of DeepSeek – Impact on SK Hynix and Other Major Korean Stocks

By Douglas Kim

  • DeepSeek has been the biggest story in the global markets in the past couple of weeks.
  • In this insight, we discuss how the rise of DeepSeek could impact the share prices of the major AI related companies in Korea including SK Hynix (000660 KS). 
  • The top five Korean companies that could be negatively impacted by the rise of DeepSeek include SK Hynix, Hanmi Semiconductor, SK Square, HD Hyundai Electric, and LS Electric. 

Seoul Guarantee Insurance Pre-IPO Updated Thoughts on Valuation – Weaker Performance than Expected

By Clarence Chu

  • Seoul Guarantee Insurance (031210 KS) is looking to raise around US$155m in its Korean IPO. 
  • Seoul Guarantee Insurance (SGI) is a guarantee insurance firm operating predominantly in Korea.
  • In this note, we discuss its recent financials, and share our updated thoughts on valuation.

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Jan 29
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Daily Brief Australia: Red Hawk Mining , Pureprofile Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • Red Hawk (RHK AU): Fortescue’s Off-Market Offer
  • Pureprofile Ltd – Record revenue and EBITDA in Q2, guidance upgraded
  • Pureprofile RaaS Interview Transcript 29 January 2025

Red Hawk (RHK AU): Fortescue’s Off-Market Offer

By David Blennerhassett

  • Via an off-market offer, Fortescue Metals (FMG AU)is aiming to purchase all shares of iron-ore play Red Hawk Mining (RHK AU) at A$1.05/share, a 28% premium to last close.
  • If Fortescue secures at least 75% of Red Hawk’s shares within seven days, the Offer Price increases to A$1.20/share, a 46% premium to last close
  • Fortescue’s focus is on Red Hawk’s Blacksmith iron ore project, located ~30 kilometers west of Fortescue’s own Solomon project.

Pureprofile Ltd – Record revenue and EBITDA in Q2, guidance upgraded

By Research as a Service (RaaS)

  • RaaS has published an update on data analytics company Pureprofile (ASX:PPL) following its record Q2 and H1 results and guidance upgrade.
  • Q2 revenue increased 30% to $15.3m, bringing H1 revenue to $29.2m, an increase of 22% on the previous corresponding period (pcp) and ahead of our forecast for $27.6m.
  • Q2 EBITDA was a record $1.7m, up 79% on the pcp and bringing H1 EBITDA to $3.3m, a 38% increase on the pcp.

Pureprofile RaaS Interview Transcript 29 January 2025

By Research as a Service (RaaS)

  • RaaS conducted an interview with PPL CEO Martin Filz and COO/CFO Melinda Sheppard post the release of the company’s record Q2 and H1 results.
  • This is a full transcript of the 14:36min interview.

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Jan 29
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Daily Brief Singapore: Japfa Ltd, SLB Development, Bund Center Investment, Hyphens Pharma International, UOB Kay Hian Holdings and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Japfa (JAP SP): The Santosa Family (Finally) Makes A Move
  • SLB Dev (SLB SP): Ong Family Offer By Way Of A Scheme.
  • Bund Center Investment (BTE SP): A Dominant Real Estate Play on the Bund
  • Hyphens Pharma (HYP SP): ASEAN’S Leading Specialty Pharma Company
  • 10 in 10 with International Cement Group – Tapping growth opportunities in Central Asia

Japfa (JAP SP): The Santosa Family (Finally) Makes A Move

By David Blennerhassett

  • Back in March of last year, Bloomberg reported,that Renaldo Santosa and his family, who collectively controlled ~75.5% of agri-play Japfa Ltd (JAP SP), were considering taking Japfa private.
  • This was discussed in Japfa (JAP SP): Impressive Gain. But No Firm Offer. Then crickets. 
  • The family has now pitched an Offer of S$0.62/share, by way of  a Scheme, a 34.8% premium to undisturbed. That’s probably enough to get this over the line. 

SLB Dev (SLB SP): Ong Family Offer By Way Of A Scheme.

By David Blennerhassett

Bund Center Investment (BTE SP): A Dominant Real Estate Play on the Bund

By Kilde

  • Bund Center Investment (BCI) is a diversified investment vehicle with two commercial real estate assets: the landmark Westin Bund Center Hotel, and its premium office space, Bund Center Office Tower in Shanghai.
  • BCI operates under two business segments: Hotel Operations and Property Leasing.
  • Despite short-term hurdles, long-term economic growth in China provides a supportive backdrop.

Hyphens Pharma (HYP SP): ASEAN’S Leading Specialty Pharma Company

By Kilde

  • Hyphens Pharma (HYP SP EQUITY) is Singapore’s leading specialty pharmaceutical and consumer healthcare group, leveraging on its diverse footprints in ASEAN countries. Its core business lies in three segments: Specialty Pharma Principals, Proprietary Brands, and Medical Hypermart and Digital.
  • Based on its scalable business model, direct access to the five countries in the southeast Asia region enabling it to capture health expenditure growth in ASEAN countries, sustainable growth from both in-house product innovation and in-licensing cooperation, as well as realization of DocMed’s potential when rolling out the digital platform to other ASEAN markets, Hyphens Pharma will demonstrate sustainable growth momentum and optimistic investment value in the future.
  • Revenue in 2024 full year is expected to show a strong rebound compared to 2023.

10 in 10 with International Cement Group – Tapping growth opportunities in Central Asia

By Geoff Howie

  • 10 Questions for International Cement Group What are some of your business segments, and how are they performing? International Cement Group’s principal business is in the production and distribution of cement in two major countries in Central Asia – Kazakhstan and Tajikistan – accounting for more than 95% of revenue.
  • Why is this a focus market for International Cement Group, and how does the Group navigate potential challenges?.

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