Financials

• When broker Bright Smart Securities (1428 HK) was suspended recently, one possibility was Chairman, Peter Yip Mow-lum, a 50.54% shareholder, cashing out. And that has now unfolded.
• Yip has entered into a SPA with fintech giant Ant Group, the operator of Alipay. The agreement has been struck at HK$3.28/share, a 17.6% premium to undisturbed. 
• Should the SPA complete – the key condition is NDRC approval – an unconditional MGO is triggered, also at HK$3.28. The price is final.

• Sinarmas Land (SML SP) IFA opined that the Widjaja family’s S$0.31 offer is NOT fair but reasonable, as it is below the valuation range of S$0.350 to S$0.361.
• The independent directors have recommended that shareholders accept. Due to a breach of the 10% free float requirement, the shares will be suspended at the close of the offer. 
• There are four possible outcomes with a medium probability that Sinarmas will follow the Great Eastern Holdings (GE SP) and Boustead Projects (BOCJ SP) playbook.

• The offer price of HK$3.28 by Ant Financial is attractive – 2.9x P/B and 8.3x PER, both on 12-month forward basis. It is also appealing relative to peers.
• Bright Smart Securities (1428 HK)‘s massive outperformance against the HSI showed its strong marketing and execution capabilities. Ant Financial will bring many synergies to it.  
• Risk-Averse investors may take this opportunity to cash out, but we are on the long-term bull camp and prefer to hold for further upside. 

• Bright Smart Securities And (1428 HK)‘s Chairman entered a SPA with Ant Holdco to sell his 50.55% stake at HK$3.28, a 7.5% premium to the last close.
• The SPA completion requires approval from both the NDRC and SFC. Unusually, Ant has the option of extending the long-stop date, reflecting a possibility of extra scrutiny by the regulators.
• Under Rule 26.1 of the Code, upon completion, Ant will be required to make an unconditional mandatory cash offer at HK$3.28. The MGO price is final and a knockout offer.  

• Marsh McLennan had a solid start to 2025, reporting a 9% increase in revenue for the first quarter, driven by a 4% growth in underlying revenue and contributions from acquisitions made in 2024.
• The company saw growth across all four of its businesses: Marsh, Guy Carpenter, Mercer, and Oliver Wyman.
• Adjusted operating income rose by 8%, although the adjusted operating margin slightly declined by 20 basis points, reflecting some seasonality at McGriff.

• Moody’s Corporation (Moody’s) reported strong financial performance in the first quarter of 2025, reflecting the resilience of its business model amidst market volatility and economic uncertainties.
• The company achieved a record revenue of $1.9 billion, which represents an 8% year-over-year increase.
• Both its Moody’s Investors Service (MIS) and Moody’s Analytics (MA) segments experienced 8% revenue growth.

• In a rare move, Jardine Matheson (JM SP)-controlled Hongkong Land (HKL SP) has sold nine floors (147,025 square feet) of One Exchange Square to HKEX (388 HK) for HK$6.3bn (US$810mn).
• HKL plans to use the proceeds to provide enhancements to the property sold,  the reduction of net debt; and for a share buyback. Shares are up 9% as I type. 
• HKL is focussed on divesting US$4bn to US$6bn of its balance sheet assets in the next three years. HKL’s CEO Michael Smith: “Recycling capital is our top priority right now“.

• Kyoto Financial’s president has hinted at increasing disposals in strategic equity holdings; the prior target was a JPY100bn reduction in holdings by March 2029, now there is talk of JPY200-300bn
• We estimate Kyoto Financial’s equity holdings relative to market cap at 140%+, well above its peer banks; yet, until very recently, the president had been against meaningfully reducing equity holdings
• The president’s change of view leads us to upgrade Kyoto Financial to a buy; the change in outlook means that there is real potential to extract value for shareholders

• Hong Kong Exchanges and Clearing Limited (HKEX) is purchasing 9 floors at Exchange Square in Hong Kong for $810 million, marking the top deal of the year.
• The California Public Employees’ Retirement System (CalPERS) fund has acquired an office tower near Shanghai Xintiandi for $316 million.
• Mitsubishi Estate has started construction on a $1.7 billion office project in London, further solidifying its presence in the city’s real estate market.

• Jio Financial Services (JIOFIN IN) reported a substantial increase in its Assets Under Management (AUM) to 10,053 crore, marking a 139% QoQ growth.
• The company’s digital-first approach through the JioFinance app and the rapid growth in Jio Payments Bank’s customer base demonstrate its expanding market footprint and customer engagement.
• The strategic investments in technology, robust growth in core segments, and improved customer acquisition processes provide strong momentum for FY26 and beyond, reinforcing confidence in JFSL’s growth trajectory.

• There is 1 constituent change for the IDX30 Index and 2 changes for the IDX80 Index to be implemented at the close on 30 April.
• The largest passive flows are expected in Bank Rakyat Indonesia, Bank Jago Tbk PT, Bank Mandiri Persero, Bank Tabungan Negara Persero, Adaro Energy and Bukalapak.com PT Tbk.
• There are only 4 days to implementation, so there could be relatively big moves on the changes to the IDX30 Index.

• Gunma Bank (8334 JP) and Daishi Hokuetsu Financial Group (7327 JP)/DHFG have announced an MoU to establish one of the largest regional banks in Japan by 1 April 2027.
• The transaction involves delisting Gunma through a share exchange with DHFG. A definitive agreement is expected around March 2026. 
• The plan is long-dated. The lack of a controlling shareholder necessitates a “fair” exchange ratio. My estimated Gunma/DHFG exchange ratio range is 0.38-0.39x.

• Wanda Hotel Development (169 HK), 65.05% held by Wang Jianlin, is selling its hotel property arm to Tencent (700 HK) and Trip.com (9961 HK)-backed Tongcheng Travel Holdings (780 HK).
• Wang Jianlin’s cash-strapped Dalian Wanda Group has been offloading assets such as the $8.3bn sale of its mall management business to a PAG-led consortium in March last year.
• Wanda Hotel proposes distributing all or part of the proceeds from the sale. Given Wang’s controlling shareholding, I’d tilt towards the former.

• SAMHI Hotels (SAMHI IN) has entered into a strategic partnership with GIC, a global institutional investor, to establish a joint venture platform for upscale and higher hotel assets in India.
• This transaction will significantly reduce SAMHI’s debt, enhance its financial flexibility, and provide access to up to $300 million in future capital for further expansion in high-demand upscale hotel sector.
• The partnership with GIC strengthens SAMHI’s growth outlook, boosts profitability through debt reduction, and positions the company to capitalize on the rapidly expanding upscale hospitality market in India.

• HSBC has rallied 19.8% from the April low and is up > 13% year-to-date. Against this backdrop we analyze implied vol, implied jump and post-earning price patterns. 
• Q1 is typically HSBC’s least volatile earnings quarter, with most moves falling short of current jump expectations.
• We suggest a short-vega hedge structure that benefits from elevated implied vol.

• Revenue increased by 21.4% YoY to JPY29.7bn, with operating profit rising 53.1% YoY to JPY12.5bn.
• Capital gains reached JPY12.7bn, a 60.0% YoY increase, driven by IPO-related share sales and unlisted shares.
• Total assets under management stood at JPY458.4bn, with JPY198.5bn subject to management fees as of end-March 2025.

• What you need to know: • Kobo announced the commencement of its 2025 diamond drill program at its 100% owned Kossou Gold Project in Côte d’Ivoire.
• • The 2025 program will consist of between 20,000-30,000m of diamond drilling, the largest program on the project since initial discovery.
• • Kobo is a gold exploration company with a focus in Côte d’Ivoire, a country getting increasing attention from the mid-tier and major firms.

Utilico Emerging Markets Trusts (UEM) now has two portfolio managers: Charles Jillings (since launch) and Jacqueline Broers (former deputy manager) following her promotion at the beginning of 2025. They are both highly impressed with the quality of the trust’s portfolio companies and their management teams. However, the managers consider it wise to take a cautiously optimistic shorter-term view given the risks to global growth from US President Trump’s trade policies. In an uncertain macroeconomic environment, UEM looks relatively well positioned given its focus on high-quality, cash-generative utility and infrastructure assets. The favourable prospects for emerging markets remain intact with above-average growth potential and equity valuations that are at a substantial discount to those in developed markets. UEM has a long-term record of outperformance versus the MSCI Emerging Markets Index, which is used as a reference and, since inception in 2005 until the end of March 2025, the trust’s NAV total return has compounded at 8.8% per year.

• Lone Star acquires Yokohama apartment block from Mapletree for hotel project, expanding their investment portfolio in the real estate sector.
• Former executives from BlackRock and CapitaLand, including Simon Treacy, are taking on leadership roles in the energy startup PolarBlue.
• It is important to stay positive and keep moving forward in the face of challenges, as success is attainable with perseverance and determination.

• At noon today, Jafco Co Ltd (8595 JP) announced full year (to March 2025) results. Revenues were up 21.4% this year, OP +49.7%, and Net Income +27.8%.
• The company announced a ¥5bn buyback, and also announced a new dividend policy of 6% DOE or 50% payout ratio. As it is a markets business, there is no guidance. 
• The stock popped significantly in the PM session, but the market zeitgeist is a tailwind. And there is supportive new news.

• Jafco divests overseas operations to focus on domestic capital markets
• The company continues to focus on shareholder returns in a meaningful way
• Domestic venture capital returns exceed overseas returns historically and the future looks bright

• Bright Smart Securities And (1428 HK) is in a trading halt “pursuant to the Hong Kong Code on Takeovers and Mergers, which constitutes inside information of the Company.”
• It is likely that Mr Lum, the founder and chairman, has entered a sale and purchase agreement to sell his controlling stake, which would trigger a mandatory general offer (MGO).   
• The shares are at an all-time high and have a P/B multiple that is a material premium to peers. The MGO price is likely to be lower than last close.

• Among the various industries, the banking sector could be negatively impacted if Lee Jae-Myung becomes the next President of Korea.
• Lee Jae-Myung has pledged providing a “basic loan” of 10 million won per citizen which is likely to negatively impact the Korean banks since it lacks rigorous credit checks. 
• There is an increasing likelihood that Lee Jae-Myung could raise the pressure on local banks to share the responsibility of social policies by contributing more money to support them.

• 360 ONE WAM acquires UBS AG’s onshore wealth management business in India for INR 307 crore, adding INR 26,000 crore AUM and expanding its product and client base.
• This acquisition strengthens 360 ONE’s domestic position and offers UBS’s global expertise, creating a powerful, dual-access wealth management platform for global Indians, enhancing growth opportunities.
• The deal signifies a strategic collaboration, not just an exit, with UBS retaining a stake& expanding its Indian operations through 360 ONE, enhancing the value proposition for both firms’ clients.

• An in-depth look at price patterns, implied vol, and the earnings implied jump compared to historical outcomes.
• Based on ICBC’s historical post-earnings behavior and current implied vol levels, we recommend a hedge into the event.
• We explore post-earnings moves that show a potentially exploitable pattern.

• Robert Ng, a significant figure at Sino, is implicated in Singapore’s foreign political interference law due to his involvement with children.
• Cuscaden Peak secures approval for the $2.1B privatization deal of Singapore’s Paragon REIT, marking a significant milestone in the real estate industry.
• PAG DCU appoints Sanjay Goel, formerly of American Tower, as their new CEO, signaling a strategic move in their leadership team.

• Mid-Trading yesterday, broker Bright Smart Securities And (1428 HK) was suspended pursuant to the Takeovers Code. Shares closed up 9.3% before suspension.
• Bright Smart’s ops are tonking along nicely. It recently announced a (preliminary) 10% increase in FY25 profit (Mar Y/E). The share price is up 97% yoy.
• Bright Smart’s Chairman, Yip Peter Mow Lun, holds 50.54%. Unusual timing to take the company private. Alternatively Yip, at 73-years of age, may be cashing in his chips. 

Foxtons Group’s Q125 trading update revealed revenue growth of 24%, driven predominantly by growth in the Sales division, which in turn benefited from a pull forward in transactions due to Stamp Duty changes. However, in the longer term, we believe the company’s strategic direction remains positive, and we expect an update on its strategy to be revealed at the 4 June capital markets day. This may see an upgrade to the medium-term adjusted operating profit target of £28–33m, which is now coming into focus. We maintain our revenue and operating profit estimates and our 134p/share valuation, although risks appear to be skewed to the upside if market momentum continues.

• Hu discussed the upcoming launch of Molecular Universe MU-0 and described how the firm is using AI to accelerate battery materials discovery.
• The Molecular Universe platform is the outgrowth of the firm’s work to map out the entire small molecule universe relevant for Li-metal and Li-ion battery chemistries.
• The platform enables R&D teams to search for chemistries that meet specific engineering requirements, tuned to the specifics of different industry use cases, and interrogate the map of the chemical space in natural language, greatly enhancing R&D efficiency.

• Jilin Jiutai Rural Comm Bank (6122 HK), a small bank focusing on rural and small business lending,  is suspended pursuant to the Takeovers Code.
• Jilin Jiutai was initially suspended on the 12th March. Then on the 31st March, it indefinitely postponed its FY24 results. The share price is down 61% in the past year. 
• My guess is that Jilin Province Trust will put Jilin Jiutai out its misery via an Offer by way of a Merger by Absorption.  Pricing? Perhaps HK$0.80/share.

• In our previous insight we highlighted a buy-the-dip opportunity in the HSI INDEX in the HSI Index during the late-March pullback. However, Trump’s tariff announcement dramatically shifted the outlook.
• Following a sharp drop to 19260, the Hang Seng Index staged a fierce rally to 21000—but momentum has since stalled.
• The index has rallied for three straight weeks (including this one), but remains below key resistance levels. Our model signals weakness, and a likely pullback ahead.

• Wanda sells hotel business to Tencent-backed firm for $347M, indicating a strategic shift in their business operations.
• Keppel raises $1.5B for data centre, education funds, and urban renewal, showing a focus on diverse investments.
• Cushman & Wakefield appoints Matthew Bouw as APAC CEO for EMEA, highlighting leadership changes in the real estate industry.

• We interacted with Microfinance BU (Business Unit) managers of Bandhan Bank Ltd (BANDHAN IN) across major states in India. 
• Our objective was to understand the current collection trends and asset quality issues especially in the Microfinance Portfolio. 
• Based on our interactions, we would like to put a case for declining provisions going ahead. 

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Sunac China
• US President Donald Trump has ramped up pressure on Fed Chairman Jerome Powell. In a Truth Social post yesterday, Mr Trump called for “pre-emptive cuts” in interest rates, stating that “there can almost be no inflation, but there can be a slowing of the economy unless Mr Too Late, a major loser, lowers interest rates now”.
• The latest salvo came after White House economic advisor Kevin Hassett said on Friday that the Trump administration was studying whether it could fire Mr Powell. Mr Trump also told reporters on Friday that Mr Powell would resign if the President asked him to.

• Market inefficiencies persist in crypto markets, particularly in cross-exchange arbitrage and futures basis trading
• Traditional factor models can be adapted for cryptocurrency markets with size, momentum, and liquidity factors showing statistical significance
• On-Chain metrics provide unique alpha signals unavailable in traditional markets

IP Group made good progress in crystallising its portfolio values through exits, with proceeds of £183m collected in FY24, most notably from the realisations of Featurespace and Garrison Technology. Meanwhile, its performance continued to be negatively affected by the demanding environment for early-stage businesses, as well as some company-specific setbacks and the de-rating of the share price of Oxford Nanopore (ONT). That said, several portfolio holdings exhibited good business traction and interest from potential buyers, and IP Group’s shares now trade at a wide 59% discount to end-2024 NAV. In this note, we outline important future milestones across IP Group’s portfolio, which we encourage investors to track for indications of positive momentum.

• Mapletree, a real estate firm, has sold Scottish student housing to a Dutch fund manager, expanding its international portfolio.
• Shanghai office rents have decreased for the 12th consecutive quarter, reflecting a downward trend in the local real estate market.
• Central Tokyo office rents have increased due to rising construction costs, impacting rates for new supply and attracting investor interest.

• Nikkei rebounded and volatility eased meaningfully – implied vol giving back much of last week’s spike.
• USD/JPY softened alongside a broader break in DXY, raising questions about the depth of demand for USD assets.
• Option volumes dropped, and Put activity held steady with no clear directional tilt in flow.

• Improved risk sentiment & holiday truncated week cause compression of risk premia. Monthly IVs fell over -5.0 vol-points over the 3-day session to close at 14.2%. 
• Vol-Regime continues to stay in “High & Up” vol-state. Stabilization in IVs & RVs required for switch to “High & Down”. Extreme Backwardation of the Vol-curve has now subsided
• Tactical Implications: (1) Negative Gamma strategies have been battered. Avoid allocation to these while “High & Up” vol-state prevails. 

• Profile Group achieved record breaking revenue growth in 2024 with €40.1m, marking a 33% increase driven by an expansion of new deals and company upgrades.
• EBITDA increased by 41% in 2024 reaching €10.3m compared to €7.3m in 2023 due to operational efficiencies and technological improvements.
• Earnings before tax grew 41% to €7.3m, up from €5.1m, while earnings after tax increased by 45% to €5.6m compared to €3.8m in the previous year.

• AH Premia fall small. Spread curve torsion is mild but present, with narrow AH Premia widening, and wide premia narrowing.
• For a month I thought warning signs were flashing and spreads could widen. I think the trend is still to widening but torsion. 
• The Quiddity Portfolio is pretty hunkered down and nearly flat H/A risk. But benefits from wider spreads coming in, narrow spreads widening, and liquidity dropping.

• American Data Centers, after a one-month stint as a joint venture between bush league broker Dominari Holdings (NASDAQ: DOMH) and Eric and Donald Trump Jr., is now becoming a bitcoin miner and hoping for a Nasdaq IPO.
• ADC is doing this in tandem with a public company that already failed at mining. We strongly doubt that either ADC, in its shape shift to miner, or its public sponsor will be a good bet for investors. 
• On March 31, 2025, Eric Trump announced plans for a joint venture bitcoin mining company with Hut 8 Corp (NASDAQ: HUT).

• We are gradually building a high-conviction coverage of ideas for mid and small-cap companies in the Philippines.
• We established metrics focusing on high ROCE, sustainable growth of 10-15% year-over-year, robust balance sheets, and prudent capital allocation, essential elements for identifying potential multi-bagger opportunities.
• We add ICTSI (ICT PM)  and Asian Terminals (ATI PM) to our Philippines high-conviction list, which we will be initiating coverage on shortly. 

• Morgan Stanley purchases 50% stake in $380M Frasers Australian warehouse portfolio, expanding its real estate holdings.
• CapitaLand seeks $380M China Mall REIT listing in Shanghai, showing confidence in China’s retail market.
• China experiences moderate home price growth in March, with some cities showing signs of recovery after recent slowdowns.

• On 18 April, it was reported that Douzone Bizon (012510 KS) will become the second largest shareholder of Jeju Bank (006220 KS).
• Douzone Bizon invested 57 billion won for a 14.99% stake in Jeju Bank. Through this investment, Douzone will aim to enhance the digital business of Jeju Bank.
• This deal is likely to positively impact Jeju Bank’s shares as this capital raise is used to further invest in ERP based banking that could further boost its sales. 

• The CNMC is expected to approve the deal with mild remedies, reducing regulatory uncertainty; however, a potential Phase 3 review by the government could delay timing and introduce political risk.
• Sabadell’s standalone defense is robust, anchored in increased dividends, buybacks, and 14%+ RoTE guidance, which have helped reposition the bank as a viable independent alternative in the market.
• The offer’s gross spread has turned negative, reflecting investor skepticism about deal success or expectations of an improved offer; the lack of a premium currently weakens BBVA’s negotiating leverage.

Effective from 16 April 2025, Franklin Global Trust (FRGT) is the new name for the Martin Currie Global Portfolio Trust. The trust’s manager Zehrid Osmani, who has been in place since October 2018, and his team are transitioning to Franklin Equity Group, which should further enhance its research capabilities. FRGT’s team and investment strategy remain unchanged. At the end of February 2025, Franklin Equity Group had more than $137bn of assets under management. Its focus on high-growth sectors including technology and healthcare should be a good fit for FRGT’s approach of seeking innovative companies with long-term growth potential. The board recently announced a reduction in the trust’s fee structure, which it believes will ensure the ongoing charge remains competitive and will increase shareholder value.