Financials

• The implied move for January is less than what has been historically experienced. Sixteen of the last 26 years have had price movement > current implied move.
• January punches above its weight in terms of both historic volatility (most volatile month) and the amount of price movement relative to that historic volatility.
• Trades at the current implied move historically would have been winners 61.5% of the time with the average winner being more than double the average loser. 

• In its press release on December 26th, the Philippine Stock Exchange (PSE PM) detailed two catalysts: acquiring 61.92% of PDS and increasing the listing maintenance fee. 
• The PDS (Philippine Dealing System) pricing of 2.32 billion pesos for 61.92% implies a 10.5x PE (7.5x PE ex-cash), which will be accretive to earnings despite the cash coming down. 
• With the 75% increase in the upper limit of listing and maintenance fees and the acquisition, the stock trades at 12-13x PE/7.6% dividend yield and three billion net cash.

• Digital finance platform Funding Societies | Modalku (Funding Societies) today announced that it has raised US$25 million in equity investment from Japan’s sovereign wealth fund Cool Japan Fund (CJF), marking the fund’s first investment into a fintech company in Southeast Asia (SEA).
• The company said it will funnel the investment to deepen its core business in SME financing across its five markets (Singapore, Indonesia, Malaysia, Thailand and Vietnam) whilst further expanding its payments business since embarking on it in 2022.
• In a press statement, Funding Societies said it will focus on helping businesses get paid faster through innovative receivables and financing solutions. It will also leverage technology and AI to digitise and automate lending origination processes.

• For the month of December 2024, 13 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$16bn.
• The average premium for the new transactions announced (or first discussed) in December was ~46%. The average premium in 2024 was ~43%.
• This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.

• The implied move for January is considerably less than what has been experienced historically.
• January punches above its weight in terms of both historic volatility (most volatile month) and the amount of price movement relative to that historic volatility.
• 71% of the last 21 January’s have had a larger absolute return for the month than the current implied move of 5.7%. Average January move has been 8.62%.

• TSE-Listed companies are asked to file “Management Conscious of Capital Cost/Stock Price” awareness reports/policies. Many have. Some are still working on it. And policies change, and CGR reports are updated.
• 609 new CGRs were filed since 31-Nov-2024. Our tools show every report, links to every document, and now a new diff file tool. Input a name, see the changes.
• A surprising number of smaller companies have yet to file a MCoCC/SP Awareness report. As cross-holdings get sold down, I expect they will become activists targets in 2025.

• The biggest event in 2024 which will impact rates in 2025 is perhaps the victory of Donald Trump, who promised to cut taxes and raise tariffs.
• We do not believe the US economy could continue to grow at 3% annually with expectation of a recession in 2026. For 2025, we see declining consumption and sticky inflation.
• Elevated rates are positive on fixed rate USD bonds as long as there is no rate hike of which we believe for 2025. 

• The implied move for January is less than what has been historically experienced. Twenty of the last 27 years have had price movement > current implied move.
• January punches above its weight in terms of both historic volatility (most volatile month) and the amount of price movement relative to that historic volatility.
• January is one of the most volatility months of the year, only October having a higher average historic volatility

• DLocal, a leading Latin American payments provider with a market value of $3.6 billion, is reportedly exploring a potential sale.
• The Montevideo, Uruguay-based company, backed by private equity firm General Atlantic, is working with Morgan Stanley to evaluate interest from private equity firms and major fintech players.
• This development marks the second time DLocal has been linked to sale discussions, following a similar evaluation last year that did not culminate in an agreement.

• 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. 

• Call volumes dominate tradng across single stocks with the Put/Call ratio hitting its 3rd lowest level since the beginning of November. Volumes continue trend lower in place since early November.
• Auto companies seeing big increases in option volumes with Li Auto and Great Wall Motor moving in opposite directions since the middle of the month.  
• We add 2 new tables showing the largest volume increases across Puts and Calls – a conveient way to view unusual changes in trading activity.

• 2024 witnessed an unprecedented rise in financial crimes, including an 8x surge in Indian banking fraud, massive cryptocurrency heists, and large-scale corporate fraud like Evergrande’s $78 billion scandal.
• These scams exposed vulnerabilities in technology, governance, and public awareness, underscoring the urgent need for robust regulatory frameworks, enhanced corporate accountability, and public education.
• The evolving sophistication of financial crimes highlights the necessity for vigilance, technological resilience, and proactive measures by individuals, businesses, and governments to mitigate risks in an interconnected world.

• SEBI uncovered insider trading during the HDFC-HDFC Bank merger, implicating a Deloitte employee and his associate, who profited Rs. 8.19 lakh using call options and confidential merger details.
• This case highlights the increasing sophistication of insider trading tactics and reinforces the critical need for stricter compliance to protect investor trust and ensure market transparency.
• The case demonstrates SEBI’s growing reliance on advanced analytics to identify market anomalies, ensuring accountability even in complex trading schemes involving proxy accounts and derivative instruments.

• Nobody enjoys reading lengthy analyses during the holidays between Christmas and New Year’s Eve, and frankly, I am not inclined to write much either.
• Therefore, this edition of Crypto Moves is a concise one, focusing solely on our boldest predictions for the coming year—specifically for 2025.
• These forecasts are straightforward and easy to verify a year from now, whether we turn out to be right or wrong.

• UniCredit increased its economic exposure to Commerzbank to approximately 28%, aligning with its strategy to reach a 29.9% stake, pending ECB approval in early 2025.
• Commerzbank’s operational inefficiencies and valuation at 0.56x tangible book value highlight challenges for independence, reinforcing the rationale for a potential UniCredit takeover. My core position would be long Commerzbank.
• Projected synergies for a UniCredit-Commerzbank merger range from €705 million to €1.409 billion annually, with significant upside for Commerzbank’s share price if a takeover occurs.

• According to Graph 1, during the period October 25th, 2024 – November 25th, 2024, the price of Bitcoin exhibited an exclusively upward trajectory.
• From the beginning of the period until November 6th, the digital asset followed a consolidation pattern amid fluctuations in its price and after this sub-period, an overall bullish momentum began.
• The MA-10 and MA-20 lines started from the same point.

• 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: Vesync (2148 HK), Makino Milling Machine Co (6135 JP), Seven & I Holdings (3382 JP), Arcadium Lithium (LTM AU), Get Nice Financial Group Ltd (1469 HK). 
• Lowest spreads: Lifestyle China (2136 HK), Renewable Japan (9522 JP), Macromill, Inc (3978 JP), Fuji Soft Inc (9749 JP), Latin Resources (LRS AU), Lac Co Ltd (3857 JP).   

• Since the end of September the Kospi has been diverging from the Nikkie which has rallied as JPY has weakened. Both Kospi and KRW have been moving lower.
• Vast majority of option trading is in short dated expiries. The largest volume day of the week saw 99% of trading in expires <= Jan 09
• Implied vols were quiet but there was some increased tilt to skew making out-of-the-money Puts slightly more expensive.

• Nifty50 trading range was stable over the holiday shortened week. Option Markets responded accordingly, risk-premia was marked down. Monthly IV: 15.0% -> 11.5%.
• Vol-Regime has switched back to “High & Down” state. Wait-and-watch approach recommended given year-end effects.. 
• IV selloff has pushed entirety of term-structure into Contango. Skew has extended while Smile has compressed. Smile compression most notable in Monthly 10D Strangles. 

• NKY looks to be playing catch-up with USD/JPY, rising 4.03% on the week and breaking out of recent range after not moving much in the first half of the month.
• Implied volatility continues to slide lower with 1M implied vol down 2.5 points on the week.
• Call volumes larger than Put volumes for the first time in a while on Fridays 1.80% price surge.

• Edelweiss reported a strong Q2FY25 performance led by consistent scaling up of its businesses, especially the asset management businesses. Its insurance businesses are also growing rapidly but are loss-making currently.
• The credit businesses are also growing well with the shift to the co-lending model. 75%+ of lending in NBFC is now being done through the co-lending model. 
• Edelweiss’ focus is on value unlocking and debt reduction. The asset management businesses are ripe for unlocking and Edelweiss is exploring a stake sale via IPO for its alternatives business.

• Q2FY25 performance was mixed. IT Parks segment reported good growth at 2.5% QoQ and 8.5% YoY. BEC growth was mediocre at 8.5% YoY; QoQ is not comparable due to seasonality.
• Nesco Foods reported 10% YoY growth, which was decent but could have been better, given this business is relatively new and has significant potential. EBIT margin also declined YoY.
• Nesco is venturing into expressway wayside amenities development and management business, which appears synergistic and has potential to provide additional growth lever going forward.

• Once shareholders of Shin Kong Financial Holding (2888 TT) and Taishin Financial Holding (2887 TT) agreed to the merger two months ago, that meant an FSC submission would come shortly.
• It came on 3rd December. Normally it takes two months, but can be extended. It appears the TFTC submission (which is considered wholly separately) was made as early as September.
• This should get approved within the timeframe or not long afterwards. There is one known “document” missing from the application as of submission, but it shouldn’t be a problem.

• PCB Bank serves the Korean American community with a diverse loan portfolio including commercial real estate, business loans, and residential mortgages
• Currently experiencing lower returns due to low net interest margin and increased expenses
• High insider ownership, healthy dividends, and discounted stock price indicate potential undervaluation with a 27% upside, but key risk is deterioration of loan portfolio leading to credit losses

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• On the 5th December, Gordan Tang (& his wife Celine) acquired 2.14% in Suntec REIT (SUN SP), lifting their stake to 31.45% from 29.31%, triggering a MGO.
• This is appears to be a technical Offer. The Offer price is S$1.16/share against a S$1.17/share undisturbed price. Timing, however, IS curious after ESR Group (1821 HK)‘s recent Offer.
• The Offer Doc is now out and shareholders can tender. At S$1.18/share as I type, zero tendering should occur. The Offer closes on the 20 January, unless extended.

• Affirm Holdings, Inc. recently provided an update on its fiscal first-quarter performance for 2025, sharing various insights regarding its current operations and strategic direction.
• Throughout the session led by Founder and CEO Max Levchin, as well as other key executives, the company highlighted strong financial metrics, ongoing initiatives, and future considerations, all of which culminated in both opportunities and challenges for investors assessing its market potentials and risks.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• The past week was notably eventful, marked by the U.S. Federal Reserve (Fed) cutting interest rates for the U.S. Dollar by 25 basis points.
• However, the Fed struck a hawkish tone for the coming year, signaling fewer interest rate cuts than the market had anticipated.
• This shift unsettled investors, with the crypto market bearing the brunt of the reaction.

• Kolte Patil reported a decent Q2FY25 with highest ever quarterly pre-sales of INR 770cr, a growth of 22% YoY. Pre-sales volume corresponding to this was 1.03 MSF (Million Square Feet).
• Notably, demand for premium projects has been strong. For H1FY25, 30% of pre-sales has come from 24K luxury segment. This compares to 12% in FY22.
• Year-To-Date, new launch activity has been decent with the launch of 2.2 MSF of saleable area. This includes Kolte Patil’s entry in Navi Mumbai with a project launch in Vashi. 

• When VCredit Holdings (2003 HK), a provider of consumer financial services in China, was suspended pursuant to the Takeovers Code, I expected an Offer from Ma Ting Hung, VCredit’s chairman.
• Well, we do have an Offer. Ma acquired 4.19% via two SPAs, lifting his stake to 44.04%. Stephen Liu (an ED) also acquired 1.43% via an SPA.
• As Ma, Liu, and other parties, are presumed to be acting in concert, an unconditional MGO is triggered. But at HK$1.80/share, a 9.09% discount to undisturbed.

• Options Market caught flat-footed on hawkish Fed rhetoric. IVs corrected sharply higher, with Monthly IVs trading up to 15.5%.     
• Vol Regime has switched to “High & Up” state. IVs now in top percentile of historical ranges. Look for a quick switch back to “High & Down” state.      
• Smile dynamics unchanged. Skew has undergone compression. Vol term structure trading in inverted-V shape – should normalize once market-holiday drops off the calendar.

• Insiders are selling more than buying, especially in the technology sector
• Spin-offs like Western Digital and Lionsgate Studios are of interest to insiders
• Public Brook is a hotel company where insiders are buying stock and preferred shares, signaling potential value unlocking opportunities. Insiders are expected to start returning capital to shareholders, but the question remains if they will follow through.

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

• They ditched the rulebook, used a market cap filter to pick the top 5, and watered down PBR and ROE, making them irrelevant. Market cap was the real deciding factor.
• KRX hasn’t confirmed it, but local sources say the special rebalancing was based on the top 50 KOSPI market caps as of the December 13th close.
• The shift was driven by local pension funds, especially NPS, which pushed for more big-cap exposure to trigger Value-Up investments, signaling a potential ramp-up in their involvement.

• Federal Reserve and Bank of England both make decisions that are more dovish than expected
• Market pricing reflects uncertainty and potential easing in the future
• Central banks take steps to ensure smooth funding and liquidity in the markets, including adjustments to repo facilities and addressing debt ceiling issues.

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

• Information Services Corporation (TSX:ISV) is a technology services provider in Canada, founded in 2000 to manage registries in Saskatchewan
• Strong Q2 results reported, market capitalization of CAD 530 million
• Ambitious plan for expansion, operates in a high-quality “monopoly” business with Registry Operations accounting for 70% of EBITDA

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• DAM Capital (930970Z IN) is the fastest growing merchant banker in last 3 years between 2022-24. 
• DAM Capital is pure-play merchant banker and institutional equity business, delivering high growth and margins compared to its peers. 
• Since 2019, DAM completed  27 IPOs, 16 QIPs, 6 OFS, 6 Preferential issues, 4 rights issues, 8 buybacks, 4 open offers, and 1 REIT IPO.

• Ventive Hospitality Ltd (0807075D IN) is looking to raise about US$188m in its India IPO. The deal, a fresh issue of shares, is downsized from an earlier size of ~US$240m.
• Ventive Hospitality Limited (VHL) is the largest hospitality asset owner amongst public listed market peers, focused primarily on luxury offerings across business and leisure in India and Maldives.
• We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.

• I have mentioned this before, and I am happy to emphasize it once again: the supply of block space far exceeds demand.
• There is simply not enough activity, use cases, or applications to fill the available block space across all smart contract-capable blockchains.
• This imbalance is why I firmly believe that adoption and network activity are the most critical factors for any blockchain seeking to compete with Ethereum, Solana, or the few other networks that have gained significant traction.

• Unum Group has reported its third-quarter 2024 financial performance, accentuating a strong overall operational landscape with both prospects and challenges.
• On the positive side, adjusted earnings per share (EPS) were reported at $2.13, contributing to over $1 billion in statutory earnings year-to-date.
• This performance aligns with Unum Group’s objective of achieving EPS growth of 10% to 15% for the full year, surpassing initial estimates.

• Bitcoin, Ethereum, and Solana are all incorporating ZK technology in different ways for various purposes.
• Muhammad discusses the development of FHE and its application in creating private ERC20 tokens for enhanced privacy and security.
• Each ecosystem (Bitcoin, Ethereum, Solana) is using ZK technology differently to address specific challenges and enhance functionality for users.

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

• MetLife’s third-quarter 2024 results present a complex financial landscape shaped by investments, market conditions, and strategic initiatives across different regions.
• The company reported adjusted earnings of $1.4 billion or $1.95 per share, slightly adjusted to $1.93 per share after accounting for notable items.
• This reflects the challenges and operational realities amid variable investment income pressures and market dynamics.

• Ryan Specialty Holdings reported a solid performance in its third quarter of 2024, with key financial metrics indicating overall positive momentum despite certain market challenges.
• The company achieved a 20.5% increase in total revenue, driven by a combination of 11.8% organic revenue growth and contributions from mergers and acquisitions.
• The quarter’s adjusted EBITDAC rose by 29.4% to $190 million, with margins expanding by 220 basis points to 31.5%.