Australia

• In this insight, we take a look at the potential index changes for ASX 300, 200, 100, 50, and 20 in the run-up to the March 2025 index rebal event.
• We expect two changes for ASX 50, one change for ASX 100, and seven changes for ASX 200. Separately we see 10 ADDs and 8 DELs for ASX 300.
• Sigma Healthcare (SIG AU) is likely to experience major index inflows in March 2025 if the merger completes as planned.

• Up to six Aussie stocks could be deleted from global passive portfolios in February. The final list of deletions depends on stock performance over the next 2-3 weeks.
• If deleted, passive trackers will need to sell between A$370m-A$500m in the stocks. Impact is high at between 7-24 days of ADV.
• The potential deletions have underperformed the S&P/ASX 200 (AS51 INDEX) over every time period from 1 week to 3 months. Positioning is still low in a few stocks.

• On 28 November, Avjennings Ltd (AVJ AU) disclosed a non-binding indicative proposal from AVID at A$0.67 per share, a 103.0% premium to the undisturbed price. 
• On 27 December, Queensgate Investments became a substantial shareholder, representing 5.39% of outstanding shares. Ho Bee Land Ltd (HOBEE SP), a Singaporean real-estate developer, owns Queensgate.
• Ho Bee Land is a strategic investor and is likely contemplating a competing offer, mainly because AVID’s offer is below NTA and AVJennings’s controlling shareholder’s ties to Singapore. 

• Pro Medicus Ltd (PME AU) reported strong performance in FY24, with revenue increasing 29% YoY to A$162M. Net profit grew at a faster pace of 37% YoY to A$83M.
• At the end of FY24, full contracted revenue increased to A$624M over the next five years from A$468M in FY23, laying the foundation for continued growth in FY25 and beyond.
• In November, PME signed a A$330M, 10-year contract with Trinity Health. The contract is the largest ever for Pro Medicus and Trinity is the first customer with a national footprint.

• RaaS has published a flash comment on NT-focused gas explorer/producer Empire Energy Group (ASX:EEG) following the recently released findings of the Independent Expert Scientific Committee (IESC) on unconventional gas in the Beetaloo which has assessed the potential environmental impact and risk on water resources to be ‘minor’ if appropriate mitigation strategies are implemented.
• The article published on the NT News website, also references comments from the Federal Department of Climate Change, Energy, Environment and Water (DCEEW) which concluded that exploration work (to date) did not meet the legal threshold of being a matter of national environmental significance to be assessed under national environmental law.
• In our view, these findings from both assessments are positive for operators with respect to current gas development plans and potential future phases of gas expansion.

• RaaS interviewed Ricegrowers Group CFO Dimitri Courtelis following the company’s H1 FY25 results.
• This is a full transcript of the interview.

• RaaS has published an update on and interview with FMCG agri-group Ricegrowers which trades as SunRice (ASX:SGLLV) following the release of its interim report last week in which it delivered RaaS-adjusted EBITDA of $67.9m (+10%) in line with our forecasts and NPAT of $31.2m (+4%), below our forecasts due to a higher than expected tax rate (28% vs our 22%).Branded sales represent ~70% of total SGLLV sales, with the benefits of new brands, brand extensions and increased ranging evident in the H1 FY25 result.
• Across Rice Food, Riviana and CopRice EBITDA growth far outpaced revenue growth, with EBITDA margins for Rice Food +400bps, +330bps for CopRice and +140bps for Riviana.
• SGLLV added SavourLife and Simply Delish to the portfolio over the half and can be expected to add and extend further brands in pursuit of its 2030 revenue target of $3.0b.

• RaaS has published a flash comment on advanced materials manufacturing group Amaero International (ASX:3DA) following the company’s recent announcements that it has ordered its third EIGA and that it has secured Aerospace Quality Management System AS9100D accreditation for the Tennessee facility for the manufacturing and testing of metal powder and PM-HIP production, both important milestones on the path to commercialisation.
• We have already incorporated the company’s capex guidance in our forecasts so do not anticipate any change to our estimates from these announcements.
• Our base-case DCF valuation is $1.16/share, fully diluted, which represents potential capital upside of 346%.

• RaaS has published an update on vertically-integrated aviation designer and manufacturer Structural Monitoring Systems (ASX:SMN) following the company’s update on its guidance which suggests that 80% or $24m of the $30m low-end FY25 revenue guidance is now contracted.
• SMN has provided an update to FY25 guidance announced on November 1, where revenue was guided to $30m-$34m, +14% at the midpoint on FY24, and for EBITDA of between $7.6m and $9.1m, +300% at the midpoint on FY24.
• The update suggests 80% or $24m of the $30m low-end revenue guidance is now contracted following a successful year-end sales campaign for the new Forest Radio product.

• After Tanarra Capital categorically refuted an Australian article alleging Tanarra was supportive of Bain’s Offer, Insignia Financial (IFL AU)‘s board’s response was all-but rubber stamped. 
• Insignia reckons Bain’s Offer does not represent fair value, and in the “context of a change of control transaction“. 
• What now – does Bain bump? Tough call in a space where one, possible two deals, may lapse in short succession. 

• The S&P/ASX 200 (AS51 INDEX) has declined two weeks in a row. Quantitative analysis suggests that a trend reversal could occur soon.
• This Insight provides an option strategy based on the resistance and support levels identified in the quantitative Insight EQD | ASX 200 Presents a High-Probability Buy-The-Dip Opportunity 
• Option liquidity and volatility analysis, including skew, term structure and put/call ratios are provided and used in strategy design.

• Rio doubles down on lithium investment in Rincon, with a US $2.5 billion expansion plan
• BHP and Rio have historically had differing views on commodities, with examples in Potash, aluminium, and mineral sands
• Rincon project aims to expand production to 60,000 tonnes per annum, with heavy reliance on DLE technology for extraction and processing

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

Recce received approval from the Indonesian Drug and Food Regulatory Authority, Badan POM (BPOM), to start its registrational Phase III study in Indonesia of RECCE® 327 topical gel (R327G) in diabetic foot infections (DFIs). This was the final hurdle that needed to be overcome before study enrolment can proceed, which is expected to start before the end of 2024. Top-line data from the 300-patient double-blinded Phase III study (with 200 patients in the R327 arm and 100 on placebo) are anticipated in late 2025. If positive, we expect Recce would be able to launch R327G in South-East Asia in H2 CY26, potentially marking the company’s transition to a commercial stage.

• The S&P/ASX 200 INDEX it’s currently trending up quite well, since October 2023. The current rally picked up some steam from July 2024 and is quite steady. 
• The index started to pull back 2 weeks ago and has closed 2 consecutive weeks down and this week started with a Monday down Close.
• Our models show a clear opportunity to buy this dip and ride the index uptrend back to >3% profit target, roughly a 3-weeks movement according to our forecast.

Canyon Resources, an ASX-listed exploration and development company, is advancing the high-grade, large-scale Minim Martap bauxite project in Cameroon. Minim Martap, a feasibility-stage project, is set to become an important independent source of low-cost bauxite for the fast-growing seaborne market. While we are planning to initiate full coverage of Canyon Resources soon, in this note we focus on the key elements of the company’s investment case – attractive project economics, favourable bauxite market fundamentals and supportive cornerstone shareholder.

• Price Movements: SGX Iron Ore Futures rose $1.95/ton last week, peaking at $107.30/ton but faced increased resistance and waning momentum in the later part of the week. 
• Economic Influence: Expanded Chinese stimulus initially boosted prices, but weak CPI and loan data revealed sustained economic headwinds, dampening a lasting rally.
• Technical Indicators: A flat-top pattern, narrowing MACD, and declining RSI point to bearish potential.

• De Grey Mining (DEG AU), Perseus Mining (PRU AU) and Sandfire Resources Limited (SFR AU) will be added to the Vaneck Vectors Australian Resources ETF (MVR AU) in December.
• Constituent changes, float changes and capping changes result in an estimated one-way turnover of 7.4% and in a round-trip trade of A$63m.
• De Grey Mining will be acquired by Northern Star Resources in the first half of 2025. The passive buying could push De Grey Mining higher in the short-term.

• Telix Pharmaceuticals (TLX AU) is the sole (and somewhat surprising) inclusion for the VanEck Vectors Australian Equal Weight ETF (MVW AU) in December.
• The one inclusion, float changes and capping changes result in a one-way turnover of 5.5% leading to a round-trip trade of A$290m.
• Shorts have increased in Telix Pharmaceuticals (TLX AU) this year but there has been some covering in the stock recently.

• No constituent changes for the VanEck Vectors Junior Gold Miners ETF (GDXJ US) in December. But there are a lot of float and capping changes.
• Estimated one-way turnover is 2.6% resulting in a round-trip trade of US$269m. There are 8 stocks with over 1x ADV to trade from passive trackers.
• Stocks with the largest flows are Evolution Mining, Pan American Silver, Westgold Resources, B2Gold, Alamos Gold, Harmony Gold Mining, Eldorado Gold, K92 Mining, IAMGOLD, Endeavour Silver and Emerald Resources.

• The upcoming rebalance of the MVIS Australia A-REIT Index will be implemented at the close on 20 December. There are no constituent changes, but there are float and capping changes.
• Estimated one-way turnover at the rebalance is 2.9% resulting in a one-way trade of A$17m. There is limited impact on the index constituents.
• The largest inflows are in Charter Hall, Gpt Group, Dexus Property and Region RE while the largest outflows will be from Goodman Group, Scentre Group and Vicinity Centres.

• The MV J-Gold Miners index represents the performance of small-cap and mid-cap gold and silver mining companies listed around the world.
• There will be no index changes for the December 2024 rebal event.
• We expect a one-way flow of US$168mm for December 2024, which translates to a turnover of 3.4%.

• The MV Australia Equal Weight Index represents the performance of large, liquid companies incorporated in Australia and listed on the ASX.
• Telix Pharmaceuticals (TLX AU) is an ADD for the December 2024 review, with no other changes to the index.
• We expect a one-way flow of $US90mm for December 2024, which translates to a turnover of 5.5%.