Category

Daily Briefs

Jul 10
0

Daily Brief Crypto: Bitcoin Gets The Nod and more

By | Crypto, Daily Briefs

In today’s briefing:

  • Bitcoin Gets The Nod

Bitcoin Gets The Nod

By Etherbridge

  • The bitcoin halving is officially insight, expected to occur in late April 2024.
  • Unlike bitcoins competitors for money like the US dollar or British pound, its monetary policy is programmatic, simple, immutable and transparent to its holders.
  • The upcoming halving will reduce the block subsidy to 3.125 BTC a block, trimming bitcoins issuance rate to 0.9%.

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Jul 10
0

Daily Brief Event-Driven: Socionext Placement – Valuation More Reasonable but past Secondary Offerings Have a Mixed Record and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Socionext Placement – Valuation More Reasonable but past Secondary Offerings Have a Mixed Record
  • Merger Arb Mondays (10 Jul) – JSR, Yachiyo, InvoCare, Costa, Musgrave, Metro Pacific, Healthway
  • EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades-Taking a Breather
  • EQD | Hang Seng Index (HSI) WEEKLY Looking for Short-Term Direction

Socionext Placement – Valuation More Reasonable but past Secondary Offerings Have a Mixed Record

By Sumeet Singh

Merger Arb Mondays (10 Jul) – JSR, Yachiyo, InvoCare, Costa, Musgrave, Metro Pacific, Healthway

By Arun George

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades-Taking a Breather

By Simon Harris

  • Weekly summary of vol changes and moves across Global Markets
  • Analysing ATM volatility and skew changes over the last 5 days
  • We suggest a few trades to take advantage of the implied vol surfaces

EQD | Hang Seng Index (HSI) WEEKLY Looking for Short-Term Direction

By Nico Rosti

  • The Hong Kong Hang Seng Index (HSI INDEX) has been in a downtrend since January 2018. Long-term direction unclear, but the WEEKLY period is mildly OVERSOLD, it may bounce soon.
  • The case for a LONG trade is valid if the market does not fall > 2 consecutive weeks from June 30th’s Close (18916.43). High-probability LONG trades from 17786.
  • SHORT trade strategy possible but requires patience: if the market rises, it could rise for 2-3 weeks, based on MRM’s pattern readings. Better wait and short that scenario, not earlier.

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Jul 10
0

Daily Brief Macro: Global Credit Outlook: Tightness at Banks and Speculative Grade Issuers to Persist and more

By | Daily Briefs, Macro

In today’s briefing:

  • Global Credit Outlook: Tightness at Banks and Speculative Grade Issuers to Persist
  • Portfolio Watch: The Summer Volatility Razor
  • Positioning Watch – The 60/40 Portfolio in Reverse
  • Bond Rout = Stock Rout?
  • Why Our “Ultimate Market Timing Model” Is Cautious
  • US Bond Market Signalling Higher Yields

Global Credit Outlook: Tightness at Banks and Speculative Grade Issuers to Persist

By Said Desaque

  • Credit markets have finally accepted the view that central bank policy rates will remain higher for longer. Despite the resilience of global demand, conditions vary considerably on a cross-border basis.
  • Conditions in credit markets have not deteriorated as badly as envisaged. Investors are wary about speculative grade borrowers. Banks continue to be much more risk averse than credit markets. 
  • US borrowers will wait before refinancing due to the higher for longer policy of the Fed. Asia Pacific speculative grade borrowers face refinancing risks if market conditions fail to improve. 

Portfolio Watch: The Summer Volatility Razor

By Emil Moller

  • Usually, July is a bit of a zombie month with traders locked in or taking chips off the table to enjoy the beach instead.
  • But with VIX up some 13% on the week and treasury yields at 15-year highs after a massive rout on the back of a massive beat on the ADP report which today seems to be undermined by a Non-farm payroll report as of writing.
  • It would seem that the general modus operandi in this point is whether your book can tackle a peak in volatility or not

Positioning Watch – The 60/40 Portfolio in Reverse

By Andreas Steno

  • The reverse 60/40 portfolio seems to be THE allocation of the average trader with equity positioning slightly underweight and bond positioning massively overweight.
  • Being underweight equities is not doing any good for your portfolio at the moment, and the long bond trade doesn’t have positive returns in sight if everything that’s unfolding right now continues.
  • Macro-wise and market-wise we are currently at a big crossroad, as traders and PMs are trying to figure out the state of the global economy, and how central banks are going to respond to recent data releases.

Bond Rout = Stock Rout?

By Cam Hui

  • The S&P 500 hit an air pocket last week and as it was rattled by the rout in bond prices.
  • As the index weakened, SPY formed a textbook island reversal with a measured objective of about 435, which represents a fairly shallow pullback.
  • Looking ahead over the next few weeks, current conditions argue for a corrective period or consolidation before equity bulls can regain their mojo.

Why Our “Ultimate Market Timing Model” Is Cautious

By Cam Hui

  • How would you like to take greater equity risk while reducing the worst of the downside risk? Our Ultimate Market Timing Model (UMTM) is designed to do that.
  • Our UMTM is cautious on equities based on two scenarios. The first is a mild recession, which is consistent with the Fed’s staff forecast.
  • The other more ominous scenario is the false soft landing which turns into stagflationary growth, which would be unfriendly to both stock and bond prices.

US Bond Market Signalling Higher Yields

By Untying The Gordian Knot

  • Late Economic cycle rate hikes are seen as a buying opportunity of duration as inflation expectations are expected to come under control.
  • For the first time, FED funds are not discounting rate cuts in 2023.
  • If inflation remains high over time, the strategies of reducing interest rates in 2024, investing in a long US duration and expecting lower breakeven views may face difficulties.

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Jul 10
0

Daily Brief Thematic (Sector/Industry): Semiconductor Events Deserving Your Attention @ 9/7/23 and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Semiconductor Events Deserving Your Attention @ 9/7/23
  • Ohayo Japan | Weak Payrolls=Lower Rates; Weaker USD; NUGGET:Heat Pumps-The Future of Cooling/Heating
  • Japan Screen | Nikkei Dividend Stocks
  • China TMT Update Jul.10-Baba/LKNCY/BEKE-Ant Group Fine/COTTI Downgrade Promotion/Home Decoration Biz
  • Weekly Stock Bullfinder – Week of 7/10
  • Crypto Frontier

Semiconductor Events Deserving Your Attention @ 9/7/23

By William Keating

  • Global semiconductor sales amounted to $40.7 billion in May’23. This represented an increase of 1.7% MoM and a 21.1% decline on a year-ago basis
  • Samsung pre-announces Q2’23 sales and operating profit slightly down sequentially
  • HMB3 standard launched. SK Hynix wins a critical HMB3 design win at NVIDIA

Ohayo Japan | Weak Payrolls=Lower Rates; Weaker USD; NUGGET:Heat Pumps-The Future of Cooling/Heating

By Mark Chadwick

  • OVERSEAS.  SPX -0.3% and down WoW; Weak Payrolls numbers lead to fall in US 2Yr to 4.95%, USD weakness;  This week – packed schedule with CPI; Watch Bank earnings
  • JAPAN. NKY Futs flat vs Cash; USDJPY 142.2, on weaker US payrolls;   JP companies struggle to lift ROE due to expanding Equity Base (=more buybacks?); Kishida to reshuffle cabinet
  • NUGGET. Heat Pumps – A Big Deal for Daikin(6367)/Melco(6503).  A large addressable, and growing market, and great for the environment. Yes, you should get excited!

Japan Screen | Nikkei Dividend Stocks

By Mark Chadwick

  • The Nikkei has recently launched two new equity indices for investors that are focused on dividends.
  • We highlight some similarities and differences with the well-known US S&P 500 Dividend Aristocrats Index
  • We carry out a quick and simple screen of the Nikkei constituents to find the best dividend stocks to buy

China TMT Update Jul.10-Baba/LKNCY/BEKE-Ant Group Fine/COTTI Downgrade Promotion/Home Decoration Biz

By Shawn Yang

  • BABA: Ant Group fine to be announced, but listing unlikely until 2024 (+)
  • LKNCY: COTTI Coffee downgrade its promotion campaign, and Coffee price war is gradually easing (+)
  • BEKE: Beike is exploiting new opportunity in home decoration business, and Beike Group Decoration delivered its first batch of projects in Tianjin

Weekly Stock Bullfinder – Week of 7/10

By Weekly Stock Bull Finder

  • Energy- Rotation to Laggards or Something More Brewing?
  • The worst S&P 500 sector so far in 2023 has been energy which is down almost 8% getting trounced by the technology and communication services sectors.
  • Inflation readings have benefited so far by energy “staying in the box” in 2023 versus the wild price spikes to $5/gallon gasoline and above which occurred last spring.

Crypto Frontier

By subSPAC

  • Bitcoin Depot, a North American Bitcoin ATM firm, took a significant leap last week, diving into public markets through an $885 million SPAC transaction.
  • This move marks the company as the first pure-play operator in the industry to pursue such an avenue, a distinct endeavor in a field dotted with complexity and uncertainty.
  • Within the past few years, we’ve seen several crypto SPAC deals, such as cryptocurrency miner Core Scientific and digital rewards and crypto platform Bakkt Holdings, successfully step into the public arena.

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Jul 10
0

Daily Brief ECM: Weekly Deals Digest (09 Jul) – Socionext and more

By | Daily Briefs, ECM

In today’s briefing:

  • Weekly Deals Digest (09 Jul) – Socionext, Tryt, Costa, Musgrave, United Malt, Yachiyo, Metro Pacific
  • Plus Alpha Consulting Placement – Pulling Out All Stops for Deal Success as Insiders Are Selling
  • Xiamen International Investment Pre-IPO Tearsheet

Weekly Deals Digest (09 Jul) – Socionext, Tryt, Costa, Musgrave, United Malt, Yachiyo, Metro Pacific

By Arun George

Plus Alpha Consulting Placement – Pulling Out All Stops for Deal Success as Insiders Are Selling

By Sumeet Singh

  • Three shareholders of Plus Alpha Consulting (4071 JP) (PAC) aim to raise around US$230m via selling over 26% of the company.
  • PAC was listed in 2021 and after a somewhat tepid initial performance it has been doing well over the past year.
  • In this note, we talk about the deal dynamics and run the deal through our ECM framework

Xiamen International Investment Pre-IPO Tearsheet

By Ethan Aw

  • Xiamen International Investment (1567256D HK) is looking to raise up to US$1.3bn in its upcoming HK IPO. The deal will be run by CICC, Citic Securities, Huatai and Industrial Securities.
  • Xiamen International Investment (XII) is an integrated financial services group based in China’s Greater Bay Area. 
  • The Group has two commercial banks headquartered in Hong Kong and Macau, respectively and operates through its two banks Chiyu Banking Corporation (CYB) and Luso International Banking (LIB).

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Jul 10
0

Most Read: Samsonite, Li Auto, Socionext, HDFC Bank, Alibaba Group Holding , JSR Corp and more

By | Daily Briefs, Most Read

In today’s briefing:

  • HSI Market Consultation: Foreign Companies, Industry Groups, HK Companies
  • Hang Seng Index Rebalance Preview: 80 Member Target Achieved; What Next?
  • Socionext Placement – Valuation More Reasonable but past Secondary Offerings Have a Mixed Record
  • Index Rebalance & ETF Flow Recap: HSCI, HSCEI, HSI, CSI300, CSI500, SSE50, HDFC Bank, Sensex
  • Semiconductor Events Deserving Your Attention @ 9/7/23
  • Ant Group’s $6.0bn Buyback Move Casts Doubt on IPO Prospects
  • Ohayo Japan | Weak Payrolls=Lower Rates; Weaker USD; NUGGET:Heat Pumps-The Future of Cooling/Heating
  • Merger Arb Mondays (10 Jul) – JSR, Yachiyo, InvoCare, Costa, Musgrave, Metro Pacific, Healthway
  • ECM Weekly (9th July 2023) – Socionext, Yongtai, Tryt, Redox, S.F. Holding, Lalatech, Fadu, Amman
  • Japan Screen | Nikkei Dividend Stocks

HSI Market Consultation: Foreign Companies, Industry Groups, HK Companies

By Brian Freitas

  • Hang Seng Indexes has started a consultation on the eligibility of Foreign Companies in the Hang Seng Index, a review of the seven Industry Groups and number of HK constituents.
  • We agree that foreign companies should be added to the index, no change needed to the Industry Groups, and the cap on the number of HK constituents should be removed.
  • There are a few potential adds due to the removal of the cap on HK companies, while there are potential foreign company additions later this year or in 2024.

Hang Seng Index Rebalance Preview: 80 Member Target Achieved; What Next?

By Brian Freitas

  • We finally got to 80 Hang Seng Index constituents in June. Now comes the next step of moving up to 100 index constituents though there is no timeline for completion.
  • The conclusions of the market consultation on the inclusion of foreign stocks in the Hang Seng Index should be announced soon though implementation could start only in December.
  • We highlight 10 potential inclusions to the index with passive trading impact varying from 1.5-5.6 days of ADV. There are large shorts on some of the stocks.

Socionext Placement – Valuation More Reasonable but past Secondary Offerings Have a Mixed Record

By Sumeet Singh

Index Rebalance & ETF Flow Recap: HSCI, HSCEI, HSI, CSI300, CSI500, SSE50, HDFC Bank, Sensex

By Brian Freitas

Semiconductor Events Deserving Your Attention @ 9/7/23

By William Keating

  • Global semiconductor sales amounted to $40.7 billion in May’23. This represented an increase of 1.7% MoM and a 21.1% decline on a year-ago basis
  • Samsung pre-announces Q2’23 sales and operating profit slightly down sequentially
  • HMB3 standard launched. SK Hynix wins a critical HMB3 design win at NVIDIA

Ant Group’s $6.0bn Buyback Move Casts Doubt on IPO Prospects

By Oshadhi Kumarasiri

  • China’s regulators on Friday imposed Ant Financial Services Group (6688 HK) with a fine of RMB 7.12bn. A day later, Ant Group unveiled a share buyback program worth $6bn.
  • The last time media created a positive narrative around Ant Group was in January 2023 when Jack Ma relinquished control of the company.
  • However, the media excitement was short-lived as Alibaba Group Holding (9988 HK)‘s share price quickly resumed a downward trend after rising by around 22%.

Ohayo Japan | Weak Payrolls=Lower Rates; Weaker USD; NUGGET:Heat Pumps-The Future of Cooling/Heating

By Mark Chadwick

  • OVERSEAS.  SPX -0.3% and down WoW; Weak Payrolls numbers lead to fall in US 2Yr to 4.95%, USD weakness;  This week – packed schedule with CPI; Watch Bank earnings
  • JAPAN. NKY Futs flat vs Cash; USDJPY 142.2, on weaker US payrolls;   JP companies struggle to lift ROE due to expanding Equity Base (=more buybacks?); Kishida to reshuffle cabinet
  • NUGGET. Heat Pumps – A Big Deal for Daikin(6367)/Melco(6503).  A large addressable, and growing market, and great for the environment. Yes, you should get excited!

Merger Arb Mondays (10 Jul) – JSR, Yachiyo, InvoCare, Costa, Musgrave, Metro Pacific, Healthway

By Arun George

ECM Weekly (9th July 2023) – Socionext, Yongtai, Tryt, Redox, S.F. Holding, Lalatech, Fadu, Amman

By Sumeet Singh

  • Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
  • In the IPO space, Tryt Inc (9164 JP) announced a somewhat reasonable pricing range, while Fadu (440110 KS) looks to open up the Korean market for larger IPOs again.
  • On the placement front,  Socionext (6526 JP) found itself in the eye of a storm after its stupendous 6x increase since listing.

Japan Screen | Nikkei Dividend Stocks

By Mark Chadwick

  • The Nikkei has recently launched two new equity indices for investors that are focused on dividends.
  • We highlight some similarities and differences with the well-known US S&P 500 Dividend Aristocrats Index
  • We carry out a quick and simple screen of the Nikkei constituents to find the best dividend stocks to buy

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Jul 09
0

Daily Brief South Korea: Korea Stock Exchange KOSPI 200, ALT Semicon and more

By | Daily Briefs, South Korea

In today’s briefing:

  • KRX Official: Key Points of Earlier Derivatives Market Opening & Market Impacts to Consider
  • ALT Co IPO Valuation Analysis

KRX Official: Key Points of Earlier Derivatives Market Opening & Market Impacts to Consider

By Sanghyun Park

  • The derivatives market will commence trading 15 minutes earlier, starting from July 31st. On July 7, KRX published guidelines that consolidate crucial factors for traders to consider regarding this alteration.
  • From a theoretical standpoint, the early discovery of derivative prices influenced by pre-market external variables can help mitigate excessive shocks in the spot market.
  • Considering suspected matched order fraud, particularly involving large-cap battery stocks, we should anticipate attempts to further exacerbate volatility in the early stages of the spot market using this earlier opening.

ALT Co IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation of ALT is 33,365 won per share, which represents 63% higher than the high end of the IPO price range of 20,500 won.
  • We estimate the company to generate sales of 69.7 billion won (up 57.3% YoY) in 2023 and 92.2 billion won (up 32.3% YoY) in 2024.
  • ALT’s main business is in the testing of non-memory semiconductor value chain products including Display Drive IC, CMOS image sensor, and Power Management IC.

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Jul 09
0

Daily Brief Japan: Socionext and more

By | Daily Briefs, Japan

In today’s briefing:

  • ECM Weekly (9th July 2023) – Socionext, Yongtai, Tryt, Redox, S.F. Holding, Lalatech, Fadu, Amman

ECM Weekly (9th July 2023) – Socionext, Yongtai, Tryt, Redox, S.F. Holding, Lalatech, Fadu, Amman

By Sumeet Singh

  • Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
  • In the IPO space, Tryt Inc (9164 JP) announced a somewhat reasonable pricing range, while Fadu (440110 KS) looks to open up the Korean market for larger IPOs again.
  • On the placement front,  Socionext (6526 JP) found itself in the eye of a storm after its stupendous 6x increase since listing.

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Jul 09
0

Daily Brief China: Kintor Pharmaceutical and more

By | China, Daily Briefs

In today’s briefing:

  • China Healthcare Weekly (Jul.7) – New NRDL Negotiation Rules, Assisted Reproduction Payment, Kintor

China Healthcare Weekly (Jul.7) – New NRDL Negotiation Rules, Assisted Reproduction Payment, Kintor

By Xinyao (Criss) Wang

  • NHSA released the new NRDL negotiation rules of innovative drugs. Some adjustments will bring certain benefits to innovative drugs, but the overall impact will not be as good as expected. 
  • Beijing announced that 16 assisted reproduction technologies will be covered by medical insurance reimbursement from July 1. This policy should benefit companies in the assisted reproduction industry chain.
  • We analyzed the key flaws of Kintor Pharmaceutical (9939 HK), and we remain skeptical about this company.

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Jul 09
0

Daily Brief India: HDFC Bank and more

By | Daily Briefs, India

In today’s briefing:

  • Index Rebalance & ETF Flow Recap: HSCI, HSCEI, HSI, CSI300, CSI500, SSE50, HDFC Bank, Sensex

Index Rebalance & ETF Flow Recap: HSCI, HSCEI, HSI, CSI300, CSI500, SSE50, HDFC Bank, Sensex

By Brian Freitas

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