Financials

• Swire Pacific (A) (19 HK) is coming up “rich” on my monitor vs. Cathay Pacific Airways (293 HK); and Cathay “cheap” to Air China Ltd (H) (753 HK).
• Preceding my comments on Swire and Cathay are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• LHN Group intends to list Coliwoo Co-Living on SGX, expanding their presence in the real estate market.
• C&W reports a significant 42% drop in office rents in Hong Kong, reflecting the changing landscape post-Q1 2019.
• PGIM Real Estate promotes David Fassbender to Deputy Head of APAC, indicating a shift in leadership within the company.

• SAMHI Hotels (SAMHI IN) witnessing a 9-10% top-line growth attributed to same-store Average Room Rate (ARR) growth and robust occupancy trend across all the segments.     
• Company is set to generate a top line of INR 3.2-3.5bn pa post stabilization in 2 years with an increase of 532 keys across three hotels.
• Company is expecting 35% revenue growth in next 3-4 years by repositioning the ACIC portfolio under the Marriott Tribute & Courtyard brands and opening new hotels like W& Westin Tribute. 

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Seazen Group
• In the US, the import price index slipped to negative 0.1% m-o-m (0.0% e / 0.2% revised p) in March. The index excludes tariff duties paid by importers to US Customs and Border Protection.
• Long-end treasury yields fell for a second day, supported by Deputy Treasury Secretary Michael Faulkender’s statements that officials are discussing easing the supplementary lending requirements to lower the costs of trading treasuries for banks.

• Last week, I had the pleasure of meeting the senior management team of Kina Securities (KSL AU — US$193 million) — a Papua New Guinea- (“PNG”) based commercial bank listed on the ASX.

• Participants included Kina Securities’ CEO Ivan Vidovich and CFO Johnson Kalo.

• The bank trades at a modest P/E ratio of 8.2x with a dividend yield of 9.2%. While the share price has risen recently, it remains well below its all-time high in 2019.

• HDFC Bank (HDFCB IN) is one of those few stocks that were nearly unaffected by the recent market turmoil (-5.7% pullback, peak to bottom and now at new highs).
• Our insight in January 14th 2025 signaled a strong buy opportunity, the stock rallied +13% from there.
• Now the stock has reached its previous all time highs, and may become overbought. Long-term outlook remains positive, but a short-term pullback is possible in the next 2 weeks.

• Strategic merger between LondonMetric and Urban Logistics offers scale, diversification, and internal management benefits, with a modest premium to pre-announcement price and meaningful potential for operational synergies and cost savings.
• Scheme of arrangement could complete by July 2025 if approved; long-term investors may benefit from enhanced dividend yield, greater liquidity, and sustained growth in logistics-focused real estate under unified management.
• Long SHED at 138.6p to capture 8.1% gross spread; attractive upside with manageable downside risk and strong board support; reassess on firm offer announcement by 9 May 2025.

• Hong Kong office floor in Admiralty sells at a 17-year low, reflecting challenging market conditions in the region.
• Brookfield strengthens APAC logistics presence with $588M NZ joint venture, highlighting growth opportunities in the sector.
• Manulife IM acquires Sydney Logistics Park from KKR and Centennial for $35M, expanding their real estate portfolio in Australia.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Country Garden
• In the US, the 1-year New York Fed inflation expectations edged up to 3.58% (3.26% e / 3.13% p).
• Treasuries rallied yesterday, unwinding part of last week’s decline, after the Trump administration granted a temporary tariff reprieve on smartphones and consumer electronics.

• Revenue for Q1 FY11/25 was JPY8.3bn, flat YoY, with operating profit at JPY798mn, down 41.5% YoY.
• The number of sales representatives increased to 2,546, while policy transfer agreements decreased to 4,981, down 27,362 YoY.
• New policies totaled 56,931, down 1.1% YoY, with new customers at 35,339, up 0.7% YoY.

• To broaden its TAM, HIT began beta testing a large-group 3rd-party AI-powered underwriting platform in 4Q24 & is optimistic about its prospects, based on interest generated to-date.
• In 1Q25, the company delivered solutions to large employers, including one with 1k+ employees.
• HIT believes the infrastructure it has established position it for strong growth, as it broadens its TAM and expands its offerings, often via collaborations such as one formed recently with DialCare to integrate DialCare’s virtual primary care, therapy, and psychiatry services into Health In Tech’s self-funded health plan offerings.

• 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.
• KRI’s flagship asset is ~7km from Perseus’ Yaouré gold mine (~250Koz Au produced in 2024) which will need new ore supply by 2030.
• Kobo has a massive land package totalling 1,441km2 (590km2 permitted and the remaining pending) making it an attractive takeout target.

• The FSS is banning arb trades under the MM book, requiring separate books for any arb positions to keep them distinct from MM flow.
• Most local shops lack the resources to set up a separate arb desk. Splitting teams, creating new workflows, and hiring extra staff isn’t feasible given their tight P&L.
• Building a tracker for MM dropouts could spot dislocations, as the crackdown creates short-term inefficiencies—if we’re dialed in, there’s alpha to be made.

• TKP Corporation (3479 JP) is a fascinating little company. It rents space. From people. To people. Then adds on services. Meeting, recruiting, training, seminar, banquet, party, etc rooms.
• Last year they bought control of two small businesses to add features. Revenues are up. The new FY suggests revenue growth, OP growth, and now a buyback.
• The buyback is the interesting bit. They did one last FY with interesting parameters, and Quiddity has a new tool we are trying out, so we showcase an example here.

• Implied vol spiked sharply on Monday, marking one of the largest single-day moves since the pandemic.
• We discuss the move in skew and suggest a course of action for previously recommended hedges.
• The magnitude of the implied vol move is examined in the context of recent price behavior—and whether it holds.

• Emperor Group is consolidating a site in Sai Ying Pun for a 62-home project in Hong Kong, promising a significant development.
• EQT has appointed a former KKR executive to take charge of their real estate operations in Japan, signaling a strategic move.
• A prominent mainland tycoon has sold a condo in The Peak for $66 million, marking a significant transaction in the luxury property market.

JDC Group’s (JDC’s) final FY24 results were in line with the preliminary numbers published on 10 March. FY24 growth was driven by the platform Advisortech division, but Advisory activities were also strong. Management provided FY25 guidance for revenue of €245–265m and EBITDA of €18.5–20.5m, along with mid-term guidance of €450–500m in turnover and EBITDA of €40–50m by 2030, which we see as both realistic and conservative. With an FY25e EV/EBITDA multiple of 13.7x, JDC’s valuation still appears undemanding, particularly compared to platform peers. Our discounted cash flow (DCF) values JDC at €34.56/share (from €34.04/share previously).

• In this edition: • InPost | Royal Mail sets sights on becoming the UK’s biggest parcel locker provider • Triodios Bank | IPO likely to be delayed until June • PostNL / IDS | Conservative leader calling for reassessment of IDS takeover approval • Dutch banking sector | strong lobby for a new national investment bank • E-commerce sector | Temu aims for Europe to become its largest market

• Tata Consultancy Svcs (TCS IN) , Aurionpro Solutions (AUPS IN) , Mazagon Dock Shipbuilders (MAZDOCKS IN)  have shared major updates across demand outlook, sector focus, expansion plans, and strategic pivots. 
• Each company is aligning efforts to navigate macro uncertainties, tap digital or sectoral growth, and optimize capital allocation.
• From TCS’s cautious outlook and margin levers to Apollo’s digital push and Indigo’s hospitality play, these moves reflect a broad spectrum of strategies among market leaders.

• In an announcement after the close Friday 11 April, Aeon Co Ltd (8267 JP) and AEON Mall (8905 JP) announced their merger ratio, and timing. 
• The ratio is 0.65 to 1.0, meaning Aeon Mall shareholders don’t get a lot of credit for their real estate. The timing is short-dated. The AGM is end-May. Merger July1. 
• This may be a tad light, but it is a done deal. Active shareholder base is almost all retail and crossholders+dom passive gets Aeon to 70%. 

• AEON Mall (8905 JP) announced a share exchange offer by Aeon Co Ltd (8267 JP) at 0.65 Aeon shares per Aeon Mall share, a 30.9% premium to the undisturbed price.
• The share exchange ratio is reasonable compared to historical price ratios and IFA valuation ranges. The implied offer multiple is attractive compared to peer multiples.
• Aeon’s 58.16% shareholding ensures that Aeon Mall’s vote on 22 May is low-risk. The share exchange’s effective date is 1 July.

• We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads: ENN Energy (2688 HK), Insignia Financial (IFL AU), Oneconnect Financial Technology (6638 HK), Shandong Fengxiang (9977 HK), Seven & I Holdings (3382 JP), Smart Share Global (EM US). 
• Lowest spreads: Shibaura Electronics (6957 JP), Sinarmas Land (SML SP), Millennium & Copthorne Hotels Nz (MCK NZ), Makino Milling Machine Co (6135 JP), Spartan Resources (SPR AU). 

• Risk premia in Nifty50 Options catches up with Global Markets as IVs spike from sub-12% to 24% – levels last seen during 2024 National Elections. 
• Vol-Regime switches from “Low & Up” state to “High & Up”. Term-structure swings into Backwardation. Front-end risk premiums elevated in spite of truncated upcoming week.  
• Tactical Implications: (1) Use IV-spike to flatten +ve Vega exposure. (2) Avoid -ve Gamma, Vol harvesting structures. (3) Front-end/ Back-end Calendars recommended as extreme curve inversion expected to normalize.

• Price action was volatile this week, marked by two large moves and a notable pickup in vol of vol.
• We examine the material steepening of skew observed over the course of the week.
• USD/KRW broke its recent range, reinforcing signs that USD assets may be losing their traditional flight to quality appeal.

• Both Nikkei and USD/JPY re-tested levels last seen in early August, with Nikkei implied vols surging.
• Beyond tariffs, we explore what may become the dominant driver of market movements in the weeks ahead.
• Skew steepened materially; we examine how open interest at current spot levels could shape the spot-vol relationship going forward.

• We revisit key cross-asset signals as traditional safe havens fail to respond in familiar ways.
• The past 8 days have delivered a combination of asset moves with few, if any,  historical parallels.
• With trust in U.S. safe haven assets under pressure, we explore emerging themes and ramifications.

• Brutal start to the week, with the holiday-shortened calendar and continued global weakness weighing on Monday’s open.
• Implied vol surged early, with skew steepening and tail demand reflected in out-of-the-money Put pricing
• We highlight significant activity at the 8,000 strike and its implications for near-term spot and vol dynamics.

• A volatile week for HSI, with sharp moves in price, volume, and implied volatility concentrated around Monday’s gap lower.
• We discuss the shift in spot-vol dynamics and how it may influence short-term vol trading.
• Changes in open interest and vol structure are examined in the context of ongoing global tensions.

• American Airlines is navigating a complex and turbulent operating environment as macroeconomic pressures, declining consumer confidence, and reduced corporate travel weigh heavily on the airline industry.
• While the broader sector has been battered by a steep drop in airline stock valuations—American Airlines itself has declined 24% in the past month alone—American has nonetheless posted a strong financial performance in recent quarters.
• In Q4, the carrier reported an adjusted pretax profit of $808 million and EPS of $0.86, beating guidance and contributing to a full-year adjusted pretax profit of $1.8 billion.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Longfor Group, Sunny Optical, Greentown China

• In the US, the March CPI came in below estimates at negative 0.1% m-o-m (0.1% e / 0.2% p) and 2.4% y-o-y (2.5% e / 2.8% p). This was driven by lower energy costs, as well as a decline in discretionary spending such as airfares, used vehicles and hotels. Core CPI (excluding food and energy) slowed to 0.1% m-o-m (0.3% e / 0.2% p) and 2.8% y-o-y (3.0% e / 3.1% p).

• The White House has clarified that US President Donald Trump’s total tariffs on Chinese imports stands at 145%, comprising a 125% reciprocal tariff rate on top of the existing 20% duty imposed earlier in February and March.

• RHB Bank remains our Malaysian bank top pick, as shown in our scorecard; CIMB shares have de-rated markedly year-to-date and are deep value
• Scorecard topping RHB Bank has strong fundamental value credentials and it is narrowing the gap on returns with peers, whilst also improving its delinquency ratio
• CIMB ranks third on our scorecard, due to its high NPL ratio but credit quality is improving; we see scope for operating efficiency gains and it has very attractive valuations

• SES announced on Tuesday that its 1Q25 revenue would be $5-5.8 million, in line with prior guidance (see our summary note from last quarter).
• At that time, the company said that FY25 revenue would be $15- 25 million.
• In it 1Q25 preview, SES sighted the same revenue streams it had previously called out: materials. discovery for EV batteries, sales of its 2170 Li-ion cells into the drone space, and the beginning of the commercialization of its technology for BESS for data centers.

• The EU is negotiating with India to remove the 100% import duty on fully built cars under FTA.
• Warburg Pincus plans to lead a INR600 – 800 crore rights issue to rescue troubled Fusion Micro Finance (FUSION IN).
• PAG has hired JP Morgan and Morgan Stanley to sell its INR 2.2k crore controlling stake in Nuvama Wealth Management (NUVAMA IN). 

• Bank of Maharashtra (BOMH IN) , Samvardhana Motherson International Ltd (MOTHERSO IN) and Cyient Ltd (CYL IN) . have announced major initiatives spanning branch expansion, localization, and semiconductor investments.
• Each company is adopting targeted strategies to strengthen funding models, tap into tech-led growth, and diversify revenue streams.
• These updates reflect a broad focus on operational efficiency, capital discipline, and long-term growth across sectors like finance, auto, and semiconductors.

• IndiQube Spaces Ltd (1628202D IN)  (ISL) is planning to raise about US$100m in its upcoming India IPO. 
• ISL is a managed workplace solutions provider offering technological workplace solutions. As per CBRE Report, ISL is among the leading operators in Bengaluru as of Jun 24.
• ISL offers enterprise workplace solutions, from large hubs to small spokes, enhancing employee experience through integrated interiors, amenities, and various value-added services for a seamless, efficient office environment.

• Banco BPM controls 89.949% of Anima and is likely to pursue full ownership via a second offer or squeeze-out, offering arbitrageurs a clear path to monetize residual shares.
• At €6.425, investors ahead of the 19 May ex-date can earn €0.333 net dividend plus €6.55 in a follow-up bid, implying a 7.1–8.9% spread with attractive upside.
• Annualized returns could reach 45–60%, though investors must weigh liquidity constraints, execution risk, and dividend withholding tax—especially for retail holders—when sizing or structuring the trade.

• Goodman announces $722M investment in 90MW data centre ‘Project Mars’ in Sydney, expanding their data centre portfolio.
• Executives from Partners Group, CDPQ, and ESR join the speaker list for Singapore Forum, a key event in the data centre industry.
• Singapore’s GIC collaborates with Alianza in a $329M venture to establish a data centre presence in Brazil, a promising market.

• Ki Corporation and Public Storage (PSA US) together announced a NBIO, by way of a Scheme, to acquire all of the outstanding securities of Abacus Storage (ASK AU) not held.
• The indicative offer of A$1.47/stapled security is a 26.7% premium to undisturbed and ~8% discount to the latest NTA/security. Nathan Kirsh directly/indirectly holds a 59.47% stake in ASK.
• Trading at a gross/annualised spread of 6.9%/10.9%, assuming late Nov completion. That’s tight given timing risk, and terms not being firm.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Greentown China
• In the US, the NFIB small business optimism index declined to 97.4 (99.0 e / 100.7 p), just below the 51-year average of 98.
• US President Donald Trump’s tariffs are set to take effect from midnight ET today, according to the US Customs and Border Protection.

• Runwal Enterprises Limited (2300329D IN) (REL) is planning to raise about US$117m through its upcoming India IPO. The lead bookrunners for the deal are ICICI, Jefferies.
• REL is a real estate developer engaged across the full spectrum of real estate, with a focus on residential (affordable to luxury), commercial spaces, retail malls, and educational buildings.
• As per JLL Report, between Jan 19 and Sept 24, Runwal Enterprises ranked 2nd in Mumbai for both new launches (5.69%) and sales (5.25%).

• On 7 April, Abacus Storage King (ASK AU) disclosed a non-binding proposal from Ki Corporation and Public Storage (PSA US) at A$1.47, a 26.7% premium to the undisturbed price.
• While below NTA (implying a P/NTA of 0.92x), the offer is reasonable compared to peer multiples and historical trading ranges. It represents an all-time high. 
• A binding offer is conditional on due diligence (expected to take six weeks) and Board recommendation. The Board should work to secure a binding offer closer to NTA.   

• From Monday’s gloom to Tuesday’s euphoria, the Nikkei 225 (NKY INDEX) staged one of the strongest rebounds — but tariff risks haven’t gone away. Still there.
• Here are some tactical analysis and ideas specific for the Nikkei 225 Index to prepare for the key risk ahead: another brutal sell-off.
• The targets highlighted by our models (below) come with low reversal probabilities — ranging from just 25% to 50% — this is consistent with weak market rebound dynamics.

• Industrivärden offers cost-efficient, long-term exposure to Swedish industrial blue chips, with a high-quality balance sheet and 21% upside potential to our NAV-based target price of SEK 380.2.
• While the portfolio remains concentrated in five core holdings, recent underperformance has opened a value gap; Volvo and Sandvik remain key drivers of upside in a cyclical rebound.
• The current 5.5% NAV discount is below historical norms, but insider buying and improved fundamentals suggest scope for re-rating as market sentiment stabilizes around Industrivärden’s core assets.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Yuexiu Property, Tata Motors, Softbank Group
• US President Donald Trump wrote on Truth Social that Washington will impose an additional 50% tariff on China effective April 9th, if Beijing does not back down from its 34% retaliatory tariffs.
• Mr Trump’s post also stated that the US will terminate all talks with China, while commencing negotiations with other countries. Separately, the President told reporters at the White House that he was not looking at a pause on tariffs, but added that “many countries” were seeking negotiations and there would be fair deals in certain cases.

• The gross spreads of large HK merger arb situations have increased due to the unfortunate fallout from Trump’s trade war. The HSI closed down 13.2%.
• We assess the widening spreads of HK’s merger arb situations based on offer structure, preconditions, conditions, and other factors.
• The deals, ranked in terms of increasing deal risk, are Tam Jai, Soundwill, Vesync, Goldlion, Canvest, ESR, OneConnect, HKBN, and ENN Energy.

• In Aussie Arbs: Trump Tariffs And MACs, I ran a ruler over the fifteen live deals Down Under, and how they may be affected by the Trump Tariffs.
• This insight canvasses the ongoing Hong Kong arbs and wording surrounding material adverse changes (MACs). Hong Kong MACs are typically less onerous, and lack specificity, versus Aussie arbs.
• Although the framework exists for an Offeror to enforce a MAC, I’m not aware of any evidence of this occurring under Hong Kong’s Takeovers Code.

• This afternoon, local media has been buzzing about the potential deployment of the ₩10T Market Stabilization Fund, with signs pointing to its first inflow into the market in five years.
• It’s likely to create a supply-demand imbalance, driving significant price action and requiring adjustments to our short-term outlook for the Korean market.
• Most of the money is expected to flow into KOSPI 200 ETFs, so we should watch for a major passive flow impact during KOSPI 200 rebalancing in June and December.

• KKR’s 49.4p all-cash offer, cum-dividend and matching EPRA NTA, provides a 31.9% premium and ~12.3% gross spread, creating an attractive short-term arbitrage opportunity for investors.
• PHP could increase its cash component by 1–2p without breaching investment-grade leverage, supported by strong rental income, refinancing flexibility, and post-merger synergies that enable a credible deleveraging path.
• The estimated 2–2.5 month timeline from firm offer to cash settlement positions this deal within a standard UK M&A framework, offering risk arbitrageurs visibility and duration-limited exposure.

• The SET50 index tracks the performance of the top 50 largest and most liquid names listed on the Stock Exchange of Thailand (SET).
• In this insight, we take a look at the potential ADDs/DELs for SET 50 during the index rebal event in June 2025.
• Currently, we expect four ADDs and four DELs. There are roughly two more months left in the reference period.

• Klarna Group, a Swedish fintech company and BNPL provider, filed for an IPO and submitted a registration statement F-1 form with the SEC.
• The company believes that AI and product diversification will boost profitability in the coming years coupled with aggressive cost-cutting and better underwriting process.
• However, Klarna delayed its planned IPO due to extreme volatility and Trump’s tariffs, which are a headwind for BNPL players, including Affirm and Klarna.

• The saga of CK Hutchison’s Panama Canal Ports sale might also impact FWD due to tensions between China and the Li family.
• Despite minimal mainland China presence, FWD faces exposure through its significant HK and Macau operations; HK and Macau contributed 40% – 50% of the group’s VNB and operating profits.
• After FWD’s failed IPO attempts, PCG might consider a strategic sale for liquidity; FWD might offer a good strategic fit to Korean insurers looking to expand to Southeast Asia. 

• Nifty50 risk premia recovers from depressed levels due to Global trade tensions. Lags global equity Vol-spike. Monthly IVs: 11.0% -> 12.5%. Vol-Regime moves to “Low & Up” state.  
• Term-Structure swings into Backwardation in the Front-End, but curve finally settled back in Contango by week’s end. Skew/ Smile characteristics held steady with slight compression in Strangle markups.
• Tactical Implications: (1) Continue reduced exposure to Risk-premia harvesting, (2) Long Vega structures recommended in “Low & Up” vol-state. 

• In FY03/24, AUM was JPY1.4tn (+19.6% YoY), operating revenue JPY10.3bn (+6.7% YoY), operating profit JPY1.8bn (+10.6% YoY), recurring profit JPY1.8bn (+10.6% YoY), and net income attributable to owners of the parent JPY1.3bn (+20.8% YoY).
• The company continued to expand its distribution partner network and product lineup.
• The Japanese equity market remained strong, and the rise in NAV per share drove up AUM to JPY1.4tn (+19.6% YoY).

• Chesnara announced its 2024 results, which showed positive progress compared with 2023.
• The main features were positive market returns, offset by some mixed operational experience.
• Economic Value profit of £69.1m represented a 17% increase on the £59.1m in 2023.