Financials

• Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.
• Highlight: Currently five pair trade opportunities across three markets and three sectors persist.
• Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.

• Ahead of the Bank of Japan’s 31 July 2025 policy meeting, markets broadly expect rates to remain on hold at 0.5%.
• The new US–Japan trade deal may influence the tone of the upcoming quarterly outlook—if not the rate decision itself.
• With limited precedent for rate changes but a high rate of surprises when they do occur, this Insight combines historical data with option-implied volatility to help investors assess tail risks.

• Dubai Residential REIT (DUBAIRES UH) went public on the DFM on 28 May. Due to strong demand, the offering size was increased, raising free float from 12% to 15%.
• Inclusion in Global SmallCap is possible at the August 2025 review if the ~$4.6bn market cap is assigned in the SmallCap segment.
• Inclusion in Global All-World is expected at the December 2025 review.

• There are 2 constituent changes each for the IDX30 Index and the LQ45 Index, and 3 constituent changes for IDX80 Index to be implemented at the close on 31 July.
• The largest passive flows are expected in Bank Central Asia, Bank Rakyat Indonesia, PT Adaro Andalan Indonesia, Mitra Adiperkasa, XLSMART Telecom Sejahtera, Indo Tambangraya Megah and Bank Mandiri Persero.
• With only 4 days to implementation, there could be relatively big moves on stocks that have large flow/impact from passive fund trading.

• Context: Index heavyweight HSBC (5 HK) / HSBC (HSBA LN) is set to report Interim Results 2025 on 30 July at 12:00 HKT — during the Hong Kong trading lunch break.
• Expected Move: Historical data reveals HSBC‘s announcement-day moves are significantly larger than average, with options currently pricing in a remarkably aligned ± 2.2% implied move.
• Actionable Strategies: Understand the potential for amplified volatility and explore actionable option strategies leveraging the distinctive term structure around earnings.

• I tally 38 – mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma.
• One new deal was discussed on Smartkarma this week – Pacific Industrial (7250 JP)‘s Tender Offer. Although I’m expecting an Offer for Cromwell Property (CMW AU).
• Key updates/news took place on Insignia Financial (IFL AU), PointsBet Holdings (PBH AU), New World Resources (NWC AU), Shandong Fengxiang (9977 HK), Frasers Hospitality Trust (FHT SP).

• Revenue increased by 40.9% YoY to JPY7.2bn, with operating profit up 67.6% YoY to JPY2.7bn.
• Capital gains reached JPY3.2bn (+29.7% YoY), primarily from listed shares, with an investment multiple of 2.1x.
• Total investment executed was JPY6.8bn, with JPY3.2bn in domestic VC investments, averaging 20.4% equity stakes.

• RHB Bank is now our sole pick in Malaysian banks, topping our proprietary scorecard; it retains strong fundamental value credentials, with an improving cost of risk trend
• We downgrade CIMB shares to a hold from a buy; the valuations are less compelling than RHB and it has further to improve on credit quality and returns
• PB Bank is a name to watch for its sustained premium returns, and for its position as the peer group benchmark in terms of ROE, credit quality and efficiency ratio

• Exchanges like the Chicago Mercantile Exchange serve the crucial function of bringing buyers and sellers together, ensuring transactions are completed smoothly and efficiently.
• Clearinghouses, coordinated by exchanges, play a vital role in finalizing transactions and mitigating risks, acting as a safety net to guarantee trades will settle even if one party defaults.
• CME Group specializes in futures contracts, offering a wide range of products and deep liquidity pools for global benchmark products, making it a leading marketplace for derivatives globally.

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

• We believe that the Japanese-US trade deal helps to decrease uncertainty on monetary policy, with a potential rate rise in the near term improving the outlook for Japanese banks
• We remove our short on Rakuten Bank, as it is one of the beneficiaries of a near term potential rise in benchmark rates going forward
• In terms of PBV ratio, Seven Bank still trades at a 70%+ discount to Rakuten Bank’s PBV but the latter is impacted by the near-term interest rate outlook change

Halyk Bank is a leading financial services group in Kazakhstan and Central Asia, as well as the largest local bank by assets, and has been successfully rolling out its B2C and B2B digital offering in recent years. Halyk has consistently delivered a return on equity (ROE) of 30%+, with 34.7% in Q125. High profitability, coupled with a sound capital base (a CET-1 ratio of 19.3% at end-March 2025), allows Halyk to distribute an attractive dividend, with its last 12-month payment implying a c 13% yield at the current share price. Halyk also offers the prospect of continued double-digit loan book expansion assisting further medium-term EPS growth, despite an expected net interest margin decline from the strong c 7.5% in Q125.

Record reported steady progress in its Q126 trading update. Assets under management (AUM) grew by $7bn in the quarter to $107.9bn, primarily driven by fx movements of $7.6bn, offset by a modest asset loss of $0.6bn. Crystallised Q1 performance fees of £0.4m were down year-on-year but in line with our end-FY26 estimate of £3m. The bulk of the AUM fx growth was caused by the weakness of the dollar versus the swiss franc over the quarter. Given that Record’s revenues are primarily in pounds sterling, this movement will not have had a material impact on numbers. Therefore, we are not changing our estimates at this stage.

• The Frasers Hospitality Trust (FHT SP) IFA opines that Frasers Property Ltd (FPL SP)’s scheme offer of S$0.71 cash and permitted distributions (estimated at S$0.0098) is fair and reasonable.
• While the current offer is arguably light compared to the failed 2022 offer, the lack of vocal opposition and limited retail displeasure reduces the vote risk.
• On balance, the scheme vote should pass. For a 30 September payment, the gross/annualised spread of the total offer (S$0.7198) is 2.8%/15.6%.  

• If the CGT threshold drops from ₩5B to ₩1B, year-end retail selling could surge—net sales were ₩14T in Nov–Dec 2023 versus just ₩2.5T in the same period of 2024.
• Retail may react strongly this year due to higher unrealized gains and the ₩1B CGT threshold return; about 65% of KOSPI stocks still use year-end dividend record dates.
• Odds are high for a classic year-end CGT-driven retail sell-off and a sharp KOSPI cash-futures basis move, fueled by dividend uncertainty we can capitalize on.

• BC Technology Group (863 HK) is looking to raise around US$157m from a primary placement.
• The deal is a large one to digest, representing 20.2 days of the stock’s three month ADV, and 11.3% of total shares outstanding.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Back on the 14th May 2025, S-REIT Frasers Hospitality Trust (FHT SP) entered into a Scheme with its current sponsor, Frasers Property Limited, @ S$0.71/share.
• The Scheme Consideration is 1.11x the latest adjusted NAV estimate of S$0.63904/unit; and S$0.01/unit above Frasers/TCC’s S$0.70/unit failed Offer back in September 2022.
• The Scheme Doc is now out, with a shareholder vote on the 13th August. The IFA says fair and reasonable. 

• The AI trade took the S&P500 and Nasdaq to new highs (again) with markets in Japan and Europe rallying also.
• The Australian market stumbled on Governor Bullock’s hawish tone yesterday.
• ASX200 futures are pointing to another day of net weakness.

• Accelerant Holdings (ARX US)  priced 34.46mm shares (upsized from 28.95mm) at $21.00($1 Above the $18-$20 range) and opened at $28.50 for a gain of 35.7% at first trade.
• This was the fifth insurance related IPO to debut in 2025 and all have been winners.
• We see this company having potential staying power in the short term. Several insurance related IPOs have traded higher for longer than many short term investors would have anticipated.

• Alkemy Capital Investments 163.75p £16.1m (ALK.L) The investment company announces that its wholly owned subsidiary Tees Valley Lithium, has now concluded a long-term binding feedstock agreement with Touchstone’s Chilean lithium project, one of the world’s highest-grade lithium brine deposits.
• The agreement results in up to 100,000 tonnes of lithium carbonate equivalent secured over an initial 5-year term, with an option to extend for an additional 50,000 tonnes per annum over a further 2 years.
• First commercial deliveries are expected in 2027.

• Kasumigaseki Hotel REIT (401A JP)  is looking to raise up to US$195m in its upcoming Japan IPO.
• It is a REIT with hotel assets  sponsored by affiliated developer, Kasumigaseki Capital (3498 JP).
• In this note, we examine the IPO dynamics, and undertake a peer comparison.

• On 22 July, Insignia Financial (IFL AU) entered a scheme implementation deed with CC Capital at A$4.80, a 4.0% discount to its previous non-binding offer of A$5.00.
• The key conditions are regulatory (APRA, FIRB, ACCC, FCA) and shareholder approvals. Shareholders should be supportive as the offer resulted from an auction. 
• The offer is reasonable in comparison to historical trading ranges, peer multiples and precedent transaction multiples. The timing of regulatory approvals is the key risk.

• The Hang Seng Index (HSI INDEX) has reached new highs (25538). Our quantitative model says the index has reached a 75% probability of reversal.
• Let’s break down the model’s info: PRICE MODEL 75%, TIME MODEL 75%, combined prob. of reversal is 75%. The fact that both model’s factors are overbought is “bearish”.
• Can the index climb higher? Our detailed analysis is in the insight below, together with screenshots from the model.

• The is an institutionally focused global digital asset platform that provides market infrastructure and information services.
• Reflecting their strong market presence, the Bullish Exchange’s total trading volume since launch has exceeded $1.25 trillion as of March 31, 2025.
• The digital assets space, especially crypto-exchanges, is one that has the strong tailwind from legislation passed by lawmakers which is anticipated to increase adoption from a more institutional investor base.

• UniCredit ends pursuit of BPM: Facing firm resistance from BPM and Rome, UniCredit formally withdraws its bid — closing the door on a deal the market never priced as likely.
• Persistent negative spread undermined credibility: The gross spread remained negative from day one, reflecting deep investor skepticism around deal viability, regulatory clearance, and BPM’s willingness to engage.
• Strategic implications for both sides: BPM reverts to standalone trajectory amid sector consolidation chatter; UniCredit’s retreat highlights constraints on its inorganic strategy — both political and market-driven.

• Marsh & McLennan Companies reported a solid second quarter with a 12% increase in revenue, a 14% rise in adjusted operating income, and an 11% growth in adjusted EPS, aligning well with their expectations, despite challenging macroeconomic conditions.
• Underlying revenue increased by 4%, with contributions from various business segments including Marsh, Guy Carpenter, Mercer, and Oliver Wyman.
• The company continues to navigate a complex operating environment affected by geopolitical instability, trade wars, extreme weather, and emerging AI opportunities.

• DLF Ltd (DLFU IN) re-entered Mumbai after a decade with ‘The Westpark’, a luxury project in Andheri West, featuring 416 apartments and INR 800-900 crore investment
• Company launched a Mumbai luxury project targeting INR 2,000-2,300 crore revenue from phase one, with broader market expansion and new launch plans
• This signals a strategic shift for debt-free DLF towards high-margin luxury developments, leveraging Mumbai’s booming market and demand for premium homes

• The PBV and PE valuations for TMB Thanachart, which are close to those of SCBx, seem stretched; TMB Thanachart’s return trends are well below those of SCBx
• On the weighted metrics applied to our proprietary scorecard, TMB Thanachart is the new bottom marker in the scorecard among its Thai bank peers
• Krung Thai was our core buy-rated Thai bank; we downgrade it to a hold, as its valuation discounts to its own history and its peer SCBx are no longer compelling

• ZKsync Prividium delivers a turnkey, production-ready blockchain solution tailored for institutional adoption.
• By fusing private execution, robust access controls, and Ethereum’s security guarantees, Prividium eliminates the complexity of custom chain development.
• Pioneered by Deutsche Bank and Memento, its compliant, permissioned architecture unlocks new design space for tokenization, cross-border payments, and confidential finance.

• As the second largest population in the world, India real estate is on a transformational path,  driven by economic growth and domestic demand
• In particular, we think the rapid urbanization, rising disposable income, infrastructure demand as well as capital inflow from NRI provided further boost to the sector
• We like DLF, which is one of the largest real estate developers in the country, on the back of its product positioning and strong fundamentals

• As it executes its strategy to continue to expand its reach and distribution, HIT has added many new distribution partnerships, including with large players such as leading pharmacy benefit manager (PBM) MedImpact subsidiary, Verdegard Administrators, and Hilb Group, which ranks among the top 25 U.S. insurance brokers, among others.
• Moreover, HIT is preparing to launch AI-powered solutions for mid-sized and larger businesses later in 2025 and is optimistic about the prospects, based on interest it has generated to-date.
• Concurrently, HIT continues to serve and expand its offerings for the small- to medium enterprise (SME) market.

• As outlined by Brian Freitas , the NIFTY Index ‘s September rebalance ends July 31st, the announcement of the changes will take place end August and implemented on September 29th.
• The index has been pulling back for 3 weeks, it’s oversold according to our model, 75% probability of reversing up this week.
• Lower support limit would be 24319, while a rally could take the index to 25642 across a couple of weeks. The rally won’t last more than 2 weeks probably.

• Context: The Indian Overseas Bank (IOB IN) vs. UCO Bank (UCO IN) Price-Ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
• Highlights: Statistical mean reversion suggests short-term outperformance of UCO Bank (UCO IN), also supported by more attractive valuations.
• Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Road King Infrastructure, Continuum Green, Softbank Group
• UST yields declined for a second straight day yesterday. There were no major macro catalysts, albeit the move was in line with gains across most European government bonds.
• The UST curve bull flattened, with the yield on the 2Y UST falling 1 bp to 3.86%, while that on the 10Y UST was down 4 bps at 4.38%. Equities climbed to fresh record highs, with the S&P 500 advancing 0.1% to 6,306 and the Nasdaq up 0.4% at 20,974.

• Sidekick is a Web3-native livestreaming platform that blends TikTok-style content flow, Huya-style monetization, and on-chain execution into a single experience. Within livestreams, users can tip, and participate in airdrops directly, effectively transforming content creators into real-time asset distributors.
• As crypto attention markets grow increasingly saturated, promotional methods like shill tweets and leaderboard campaigns are showing diminishing impact. Livestreaming presents a more trusted, higher-conversion format that aligns with how both meme tokens and VC backed projects now build visibility and credibility.
• The platform has gained strong early traction in Asia, onboarding over 1000 livestream focused KOLs. Sidekick now aims to broaden its content verticals and encourage deeper community engagement. 

• Veritas Finance Ltd (1392490D IN) is looking to raise up to US$323m in its upcoming Indian IPO.
• It was established in 2015, and is a non-deposit taking non-banking financial company (NBFC) registered with the Reserve Bank of India (RBI), classified as an ‘NBFC-Middle Layer’.
• In this note, we look at the firm’s past performance.

• On Friday after the close, Lifenet Insurance Company (7157 JP) announced that it would move to TSE Prime on 25 July 2025. 
• That means it will go into TOPIX on 29 August 2025 at the close. There is a lot to buy. Under the old Quiddity TOPIX Inclusion matrix, it’s super green.
• It also has a very interesting shareholder structure which is worth looking at in detail.

• Trading tax gradually dropped from 0.25% in 2020 to 0.15% in 2025, boosting volatility and short-term trades; a hike to 0.25% could cool momentum but widen arbitrage and basis spreads.
• If the major shareholder tax threshold drops to ₩1B, year-end retail dumps and Jan buybacks will return—but with less wild swings and more measured short-term fade and momentum trades.
• If the tax revamp drops end-July, expect a September Assembly push. Usually effective next January, but like 2023’s cap gains hike, changes might apply immediately in 2025.

• As discussed in Cromwell Prop (CMW AU): ESR Exit Post-Privatization?,  after ESR (1821 HK) acquired ARA Asset Management in 2021, it said Cromwell Property (CMW AU) was a non-core holding.
• After ESR announced a privatisation by Warburg/Starwood on the 4th December 2024, I mused whether this would accelerate the sale as part of a wider strategic review. 
• Two months ago, ESR initiated a block trade for part of its 31% stake in Cromwell. Now Brookfield is seeking ESR’s remaining 19.9% stake @A$0.38/share. Subject to FIRB approval.

• Default markets are taking a breather and cleansing weak hands, with global fiscal concerns affecting G10 markets.
• Japan’s upcoming upper house elections could impact fiscal situation and yen value.
• Dollar strength has been driven by mixed US data and policy news, with potential for dollar Bears to get a reprieve.

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

• Insignia Financial (IFL AU), a wealth manager and previously known as IOOF, has entered into a Scheme with CC Capital at $A$4.80/share. 
• That’s 56.9% premium to undisturbed (11th December 2024), 20% above Bain’s initial indicative tilt last year, but 4% below CC Capital (% Bain’s) A$5.00/share indictive Offer on the 7th March.
• Apart from the Scheme vote, CC Capital’s Offer requires a raft a regulatory approvals. The SID indicates 1H26 completion.

• Anup Saha’s sudden resignation as MD of Bajaj Finance Ltd (BAF IN), just three months into the role, raises succession planning concerns.
• The architect of BAF’s growth resumes full control as VC & MD until March 2028, ensuring near-term continuity.
• While operations remain stable, the event sharpens focus on long-term leadership depth in India’s most premium NBFC.

• Since inception on February 27, our equal-weighted Indian Mid-Cap basket has appreciated 29.4%, sharply outperforming the BSE Mid-Cap Index (18.6%). We revisit our basket and apply the relevant screens again. 
• We screen on minimum 10% EPS CAGR over next two years, maximum PEG of 1.3x, consensus rating of buy/overweight and upward revision in consensus EPS estimate over past 6 months.
• 14 stocks come up in our new India Mid-Caps basket – fewer than the 20 that we had earlier. Four stocks are common with the previous basket.

• BPER reopened its offer for Sondrio (21-25 Jul)y, presenting a 2.5% gross spread with settlement due by July 31 — a rare, time-sensitive arbitrage setup for short-term traders.
• With 58.15% already secured, additional tenders could push BPER near the 66.7% threshold required for a merger, bypassing the need for a 95% squeeze-out.
• The accelerated 5-day window signals strategic pressure on hesitant holders, while the offer’s confirmed execution and annualized IRR over 200% provide attractive asymmetry.

• According to our sources, the deal is double-digits oversubscribed with “meaningful mutual fund conversions”.
• Exchange written premiums were $3.1b in 2024 and the company is projecting premiums of $2.0b-$2.1b in the 1H 2025 alone.
• From a valuation standpoint, the company is targeting a near 20x multiple of EV-to-Ebitda and mid-teens multiple based on 2026 Ebitda which is considered aggressive.

• HDFC Bank (HDFCB IN)‘s Q1FY26 PAT up 12% YoY, driven by strong other income; core NII growth remained modest at 5.4%.
• Deposit growth remained robust; CASA revival and CD ratio improvement are key near-term priorities. However, margins under pressure from EBLR resets,but contingent provisions and stable asset quality offer medium-term stability.
• Bank should come back to its pre-merger metric by end of FY26. However, current valuation at 3x P/B leaves little room for error.

• This Kakao Pay EB deal is basically a quick block trade with immediate share exchange and a 90–102% strike price, letting them sell shares quietly with a built-in discount.
• Korea’s seen many EBs, but Kakao Pay’s quick-flip, discount deal is really unique. Watch hedging and roll activity—timing these can capture the sell-off and unwind bounce.
• Goldman’s sell-down triggers initial short covering and price bumps; new buyers then short, causing a second wave. Near exchange, more covering leads to choppy, drawn-out price swings.

• Bright Smart Securities (1428 HK) rallied by 132% since our last Insight, fueled by the euphoria in the brokerage and securities sector on the HK government’s stablecoin initiative.
• At HK$16.44, it is at 100% PER premium to the sector average, ex-Guotai Junan International (1788 HK). The risk-reward payoff now looks less attractive.
• It also implies net profit to grow by 150% by FY31F and priced at 18x PER. This appears stretched in the near term, though long-term prospects stay decent. 

• Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.
• Highlight: Three Aussie pair trade opportunities across three sectors persist.
• Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.

• Context: The Region (RGN AU) vs. Waypoint REIT (WPR AU) Price-Ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
• Highlights: The pair shows strong alignment in both statistical terms and fundamental metrics and factors.
• Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.

• Context: The Netwealth (NWL AU) vs. Hub24 (HUB AU) Price-Ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
• Highlights: The two companies share very similar business models and target markets. While they are closely correlated, their current price momentum is a factor when considering relative value trades.
• Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.

• NSDL has been gearing up for its IPO and is very likely to hit the markets shortly within the SEBI stipulated deadline of 31st July.
• NSDL historically had the upper hand over CDSL as institutional clients led to strong outperformance. But the booming retail investment landscape since 2021 has turned the tables on the leader.
• Given that the trend of retail participation inching is expected to continue, NSDL needs to rejuvenate its approach to plough back market share. Payments banking business cant offset the impact.

• The US-China decoupling is resulting in geo-political risks, causing structural changes to China’s manufacturing and logistics sector.  Companies re-locate their supply chains due to “China Plus One” strategy. 
• Despite E-commerce remains as a long-term strong driver for China logistics, the sector is facing severe over-supply in the near term.  National vacancy is 20.3% at Q1 2025
• We recommend SHORT MapleTree Logistics Trust, due to its significant exposure to China logistics.  DPU, NPI and ROE are on downward trend

• I tally 40 – mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma.
• Two new deals were discussed on Smartkarma this week: DD Group (3073 JP)‘s MBO and the Hanil Cement Co Ltd/New (300720 KS)/Hanil Hyundai Cement (006390 KS) merger.
• Key updates/news took place on PointsBet Holdings (PBH AU), Adriatic Metals PLC (ADT AU), Abacus Storage King (ASK AU), New World Resources (NWC AU), and ZEEKR (ZK US).

• Singapore has emerged as one of the earliest jurisdictions to establish a comprehensive regulatory regime for fiat-referenced stablecoins.
• The Monetary Authority of Singapore (MAS) has adopted the Single-Currency Stablecoin (SCS) Framework.
• The adoption is mainly in institutional trials and crypto-native payment flows, but the potential is immense.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Longfor Group, Adani Ports, Adani Green Energy
• UST yields were broadly stable yesterday. The yield on the 2Y UST rose 1 bp to 3.91%, while the yield on the 10Y UST was unchanged at 4.45%. Equities rallied, following the release of strong retail sales data. The S&P 500 rose 0.5% to a new high of 6,297, while the Nasdaq was up 0.7% at 20,886.
• Several Fed officials spoke yesterday. New York Fed President John Williams said it is “entirely appropriate” to maintain the current modestly restrictive monetary policy stance, as he expects inflation to increase in the coming months. Atlanta Fed President Raphael Bostic also said that he still supports holding interest rates steady, stating that inflation may be at an “inflection point” after several months of soft price increases.