Daily Briefs

On 10 March, Alimentation Couche-Tard (ATD CN) issued a release “UPDATE ON PROPOSAL FOR A COMBINATION WITH SEVEN & i“.
They felt obliged to be transparent in the wake of the 7&i Letter To Shareholders released yesterday. The content/nuance of the two letters differ significantly.
Two parties competing to get a truth which cannot be both could be problematic. We are still many months away from any kind of ACT/7-11 deal.

Rio Tinto (RIO AU/LN): Shareholders To Vote On Merits Of Unification

Palliser Capital, which reportedly holds ~$300mn in Rio Tinto Ltd (RIO AU/LN) shares across its dual-head structure, has campaigned for near-on a year to unify the primary listing in Australia.
Palliser’s reasonings (and others) to unify make sense, such as access to stock-based mergers and eliminating franking wastage. A recent independent assessment from Grant Thornton is also supportive of unification.
Shareholders will vote on the resolution on 3rd April for UK-listed shares and 1st May for Australian-listed shares. The UK line holds the key to the vote outcome.

JX Advanced Metals (5016 JP) IPO: Big Retail Allocation Means No Fast Entry

JX Advanced Metals (5016 JP) has priced its IPO at ¥820/share, at the top end of the IPO range but lower than the initial indication of ¥862/share.
With the bulk of the domestic offering going to retail investors, there is no chance of Fast Entry for the stock in global indices.
TOPIX INDEX inclusion will take place at the close on 28 April, while inclusion in major global indices is likely to take place in August and September.

IndusInd Bank (IIB IN): Stock Crashes on Derivatives Losses; Index Selling Next

The Indusind Bank (IIB IN) stock was down 27% yesterday following the announcement of Derivatives Portfolio losses that have wiped out 2.35% of equity.
Foreign investors were big sellers in the last 3 months of 2024. That led to increased foreign room, leading to an index upweight in February and index inclusion in March.
The drop in market cap and free float market cap will see Indusind Bank (IIB IN) deleted from the S&P BSE SENSEX Index in June and the NIFTY Index in September.

Properly Interpreting Korea’s Stock Borrow Data for Short Selling

By Sanghyun Park

Local instos borrow from brokers or peers, KSD collects and cleans the data, then KOFIA reports stock borrow balances daily with a two-day lag.
Offshore borrows via EquiLend or PB deals don’t show up—KSD reporting only covers local institution-to-institution stock loans.
Assume 60% of reported borrow balance is real shortable ammo—adjusting for this helps filter out noise in short positioning.

Proto Corp (4298 JP) – Activists Getting More Activish, Watch for Position Changes?

The MBO for Proto Corp (4298 JP) where the founder/chair is buying out from minorities is being done at the wrong price. His reasons are good, but not for minorities.
One large foreign shareholder – the second largest shareholder of the firm – has offered substantial pushback in the form of a letter asking for discussions. That went nowhere.
So now they have come out harder. The solution here is a really big bump or a broken deal if investors keep the share price above the TOB price.

Rio Tinto (RIO AU/RIO LN): Unification Index Flows

At the upcoming AGM, Rio Tinto Ltd and Rio Tinto PLC shareholders will vote on the company commencing a review on the benefits vs costs of Unification.
Palliser Capital has been pushing for Unification while the Rio Tinto Board has recommended that shareholders vote against Resolution 21/24 citing tax costs among other reasons.
If the Unification completes, S&P/ASX trackers will need to buy Rio Tinto Ltd (RIO AU) while UKX Index (UKX INDEX) trackers will sell Rio Tinto PLC (RIO LN). Net positive.

Changyou (CYOU US): Short-Form Merger Dissent Now (Definitely) Permitted

In a long-form merger for Cayman incorporated companies, dissenters can petition the Grand Court for determination of fair value. For short form merges, that avenue of dissent was not available.
But on the 28 January 2021, the Grand Court of the Cayman Islands concluded that shareholders of companies that undertake a ‘short-form’ merger were entitled to dissent.
Changyou.com (CYOU US) appealed this decision in the Court of Appeal, and was dismissed. Then appealed to the Privy Council. In a judgement handed down yesterday, this was also dismissed.

CSI500 Index Rebalance Preview: 50 Changes; 10% Turnover; US$3.6bn Round-Trip Trade

With 85% of the review period now complete, we forecast 50 changes (the maximum permitted) for the CSI Smallcap 500 Index at the close on 13 June.
We estimate a one-way turnover of 10% at the rebalance resulting in a round-trip trade of CNY26.4bn (US$3.6bn). The Information Technology gains at the expense of Healthcare and Consumer Staples.
The forecast adds have outperformed the forecast deletes and the CSI Smallcap500 Index over the last 6 months. The best part is that the volatility of the trade is very low.

Is Homeplus Debacle a Key Negative Tipping Point for MBK?

By Douglas Kim

In this insight, we discuss how the Homeplus debacle is causing a major negative sentiment on MBK Partners from both the Korean government and the media.
This negative sentiment has grown so much that it could have a legitimate negative impact in the upcoming proxy vote for the control of Korea Zinc.
The Korean government has targeted MBK for tax probe. Plus, a coalition of securities firms is expected to file a lawsuit against Homeplus and MBK.

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Mar 12

Daily Brief Quantitative Analysis: The Right Time for This Quantitative Strategy Outperforming the Nikkei Year to Date. and more

By Smartkarma Daily Briefs | Daily Briefs, Quantitative Analysis

In today’s briefing:

The Right Time for This Quantitative Strategy Outperforming the Nikkei Year to Date.

The Right Time for This Quantitative Strategy Outperforming the Nikkei Year to Date.

By Gaudenz Schneider

The Global X Nikkei 225 Covered Call ETF (2858 JP) has outperformed the Nikkei 225 (NKY INDEX) year-to-date with a 4.5% advantage, demonstrating strength in sideways and moderately declining markets.
The covered call strategy can be deployed as a tactical standalone in sideways markets or as a relative value approach against a Nikkei 225 short.
For investors anticipating a continuation of the sideways or declining market, the option roll-over on the open of March 14 offers timely entry.

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Mar 12

Daily Brief ECM: Initial Thoughts on the Hanwha Energy IPO and more

By Smartkarma Daily Briefs | Daily Briefs, ECM

In today’s briefing:

Initial Thoughts on the Hanwha Energy IPO
Austal Placement: Thematically Hot, Relatively Low Valuation
Bank of Baroda QIP Early Look – Well Flagged but Last Deal Did Not Do Well
AvePoint SGX Secondary Listing – Strong Growth and Large Client Base but Unclear Metrics

Initial Thoughts on the Hanwha Energy IPO

By Douglas Kim

Hanwha Energy, which is 100% owned by the Hanwha Group owner family members, has started the process of going public. Hanwha Energy could complete its IPO in 2025/2026.
One of the scenarios involving Hanwa Energy is that once it completes its IPO, it could merge with Hanwha Corporation (000880 KS).
Hanwha Energy generated revenue of 4.7 trillion won (up 20% YoY) and operating profit of 215 billion won (up 306.5% YoY).

Austal Placement: Thematically Hot, Relatively Low Valuation

By Nicholas Tan

Austal Ltd (ASB AU) is looking to raise US$157m, with US$125m from a primary placement and the remainder, a secondary placement contingent on the primary being fully subscribed.
The deal will be a large one to digest at 58 days of the stock’s three month ADV, representing 15.3% of its shares outstanding.
In this note, we will talk about the placement and run the deal through our ECM framework.

Bank of Baroda QIP Early Look – Well Flagged but Last Deal Did Not Do Well

By Akshat Shah

Bank Of Baroda (BOB IN) is looking to raise about INR 85bn (US$980m) in its upcoming qualified institutional placement (QIP).
In an announcement released on Feb 13, 2025, BOB mentioned its board’s approval to raise upto INR85bn via various modes including a QIP. Since then, the shares have corrected 1.2%.
The deal would be a relatively large one to digest at 39 days of three month ADV. The company’s last fundraise did not do well.

AvePoint SGX Secondary Listing – Strong Growth and Large Client Base but Unclear Metrics

By Sumeet Singh

AvePoint (AVPT US) , a global provider of data security, governance, and resilience, aims to raise around US$300m in its Singapore secondary listing.
As of FY24, AP had over 25,000 customers who rely on its Confidence Platform to prepare, secure, and optimize their critical data across environments.
In this note, we look at its past performance and other deal dynamics that might impact the listing.

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Mar 12

Daily Brief Thematic (Sector/Industry): Silicon Wafers. Is It Time To Invest? and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Silicon Wafers. Is It Time To Invest?
Ohayo Japan | Back-To-Back Losses
Here Comes the Booming Chinese Biotech Sector
Japan Morning Connection: US Respite and UKR News Should Be Enough for JP Upside
Monday Delight: 10/03/25
#117 India Insight: SpiceJet Faces Insolvency Heat, PepsiCo Eyes India Growth, Roshni Nadar Rises
Threats Are Rising. So Here’s How To Invest In Cybersecurity.

Silicon Wafers. Is It Time To Invest?

By William Keating

Worldwide silicon wafer shipments decreased by 2.7% to 12,266 million square inches in 2024, details here. This follows a 14.3% decline in the prior year.
Silicon wafer companies continue to trade at historic lows with two of the top four players sporting P/B ratios of 0.7. Intel’s P/B is presently 0.9. This makes little sense.
The current depreciation headwinds triggered by a huge CapEx splurge from 2021-2024 will turn to tailwinds once demand recovers and built-ahead production capacity stands ready & waiting.

Ohayo Japan | Back-To-Back Losses

By Mark Chadwick

Stocks closed lower Tuesday after volatile trading driven by Trump’s tariff threats. The S&P 500 fell 0.8%
Nissan Motor has appointed Ivan Espinosa, the company’s chief planning officer, as president and CEO effective April 1, replacing Makoto Uchida
Alimentation Couche-Tard has reaffirmed its commitment to pursue its ¥7 trillion takeover of Seven & i Holdings, expressing disappointment over the target’s limited engagement.

Here Comes the Booming Chinese Biotech Sector

By Odd Lots

Odd Lots podcast announces live show in Washington D.C. discussing the Jones Act and other topics
Tim Opler from Ste discusses China’s role in the pharmaceutical supply chain on the podcast

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Japan Morning Connection: US Respite and UKR News Should Be Enough for JP Upside

By Andrew Jackson

Risk-On names leading gainers in tech, while consumer disc weak after poor airlines and retailer guidance.
More outlets reporting on NAND hikes are on the way…look for upside for Kioxia and Kokusai Electric.
Puma -10.7% and a weak consumer outlook enough to take the shine off Asics?

Monday Delight: 10/03/25

By Contrarian Cashflows

Each week, I’ll share five intriguing investment ideas that recently caught my attention. These ideas are meant to spark your research and help you kickstart the week ahead with fresh insights.
Because these ideas are the result of my first-level idea generation process, they require more in depth research. Therefore, the ideas will often be concise, with occasional references to valuable work from other practitioners that I encourage you to explore.
If you have something fascinating to share that could benefit me and the wider community, don’t hesitate to send it my way—I’d love to hear from you!

#117 India Insight: SpiceJet Faces Insolvency Heat, PepsiCo Eyes India Growth, Roshni Nadar Rises

By Sudarshan Bhandari

Spicejet Ltd (SJET IN) faces insolvency pleas from lessors and a former pilot amid deepening financial distress and delayed resolution efforts.
Pepsico Inc (PEP US) plans to double India revenue in five years with focused investments in capacity, innovation, and region-specific strategies.
Roshni Nadar becomes the third-richest Indian after receiving a 47% stake in HCL from her father, Shiv Nadar.

Threats Are Rising. So Here’s How To Invest In Cybersecurity.

By Finimize Research

Cybersecurity is the place where technology, geopolitics, and business strategy meet – and it’s evolving faster than almost any other sector.
Every year, cyberattacks grow more sophisticated, businesses become more dependent on digital infrastructure, and governments step up regulations, making security an absolute necessity, not a luxury.
So when it comes to long-term investment themes that offer growth and resilience, cybersecurity seems like, well, a lock.

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Mar 12

Daily Brief Credit: YPF 4Q24: Macro Tailwinds and Strategic Progress Offset a Weak Quarter and more

By Smartkarma Daily Briefs | Credit, Daily Briefs

In today’s briefing:

YPF 4Q24: Macro Tailwinds and Strategic Progress Offset a Weak Quarter
Lucror Analytics – Morning Views Asia

YPF 4Q24: Macro Tailwinds and Strategic Progress Offset a Weak Quarter

By Leandro Gubler

We maintain our Outperform recommendation on YPF. Shale Expansion, Export Capacity Growth Key to Long-Term Performance
YPF posted weak 4Q24 results. Adjusted EBITDA dropping 38.6% QoQ and 22.5% YoY to $839 million, missing consensus by 19.7%.
YPF reaffirmed confidence in its strategic execution, achieving key milestones in shale operations, mature fields divestments, and fuel pricing adjustments.

Lucror Analytics – Morning Views Asia

By Leonard Law, CFA

In today’s Morning Views publication we comment on developments of the following high yield issuers: Yuexiu Property, Adani Energy Solutions
In the US, treasuries climbed on safe-haven demand and increased expectations of Fed rate cuts, amid growing concerns over the US economy. The UST curve bull-steepened, with the yield on the 2Y UST declining 12 bps to 3.89%, while the yield on the 10Y UST fell 9 bps to 4.22%. Fed-dated OIS were pricing in 81 bps of rate cuts this year, with the first decrease expected in June.
Equities sank on rising economic uncertainty, given rising trade tensions and after US President Donald Trump’s comments that the economy is facing a “period of transition” this year. The S&P 500 fell 2.7% to 5,615, while the Nasdaq slid 4.0% to 17,468.

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Mar 12

Daily Brief Event-Driven: 7&I (3382) Update – Couche-Tard Responds and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

7&I (3382) Update – Couche-Tard Responds
ESR (1821 HK) Chips Away At Pre-Cons
Baudroie (4413 JP) – Fast Growth, Prime Promotion, and TOPIX Inclusion
Properly Interpreting Korea’s Stock Borrow Data for Short Selling
Will a 93% takeover premium spur M&A drama?
De Grey Mining (DEG AU): Scheme Vote on 16 April
De Grey Mining (DEG AU): 16th April Scheme Vote

7&I (3382) Update – Couche-Tard Responds

On 10 March, Alimentation Couche-Tard (ATD CN) issued a release “UPDATE ON PROPOSAL FOR A COMBINATION WITH SEVEN & i“.
They felt obliged to be transparent in the wake of the 7&i Letter To Shareholders released yesterday. The content/nuance of the two letters differ significantly.
Two parties competing to get a truth which cannot be both could be problematic. We are still many months away from any kind of ACT/7-11 deal.

ESR (1821 HK) Chips Away At Pre-Cons

When the Starwood/Warburg Pincus Consortium announced a firm offer on the 4th December, it was pre-conditional on a raft of regulatory approvals from no less than eight countries/jurisdictions.
We’re half way there, with four approvals now squared away, leaving Australia, China, Hong Kong and New Zealand still to give the go ahead.
Irrevocables comprising 34.26% of the register (and 57.01% of disinterested shares) are now in the bag. This is a done deal. It’s just a question of timing.

Baudroie (4413 JP) – Fast Growth, Prime Promotion, and TOPIX Inclusion

In late November of 2024, Baudroie (4413 JP) announced it would try to move to TSE Prime and that day they announced a 2.76mm share secondary offering and a buyback.
The buyback was a bit less than a quarter of the offering. Fast forward 3mos and in early March the company announced it would move to Prime. Yesterday it did.
That puts the company in line for a TOPIX inclusion in end-April , and likely other index effects later. In the meantime, earnings and guidance are out ~10 April.

Properly Interpreting Korea’s Stock Borrow Data for Short Selling

By Sanghyun Park

Local instos borrow from brokers or peers, KSD collects and cleans the data, then KOFIA reports stock borrow balances daily with a two-day lag.
Offshore borrows via EquiLend or PB deals don’t show up—KSD reporting only covers local institution-to-institution stock loans.
Assume 60% of reported borrow balance is real shortable ammo—adjusting for this helps filter out noise in short positioning.

Will a 93% takeover premium spur M&A drama?

By Money of Mine

Oryx Global Partners teams up with former Kenmare Resources MD Michael Carville for takeover bid
Kenmare Resources operates moma titanium mine in Mozambique, one of the world’s largest producers
Weak mineral sands market and political upheaval in Mozambique impact company’s operations and valuation, leading to potential takeover bid

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De Grey Mining (DEG AU): Scheme Vote on 16 April

By Arun George

The De Grey Mining (DEG AU) IE considers Northern Star Resources (NST AU)’s offer fair and reasonable. The offer is 0.119 NST shares per DEG share.
The key condition is DEG shareholder approval. Due to the lack of a competing bid, Gold Road Resources (GOR AU), which holds a potentially blocking stake, should support it.
The offer is attractive compared to historical trading ranges. At the last close and for a 5 May payment, the gross/annualised spread is 2.4%/18.2%.

De Grey Mining (DEG AU): 16th April Scheme Vote

Back on the 2nd Dec 2024, De Grey Mining (DEG AU), which boasts one of Australia’s largest undeveloped gold projects, announced a merger with Northern Star Resources (NST AU).
Northern Star offered 0.119 new shares for every De Grey share, and will hold ~80.1% of the combined entity upon a successful Scheme, with De Grey shareholders the remaining ~19.9%.
The Scheme Booklet is now out, with a Scheme Meeting on the 16th April. Expected implementation on the 5th May. The IE (KPMG) says fair & reasonable.

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Mar 12

Daily Brief Equity Bottom-Up: Austal (ASB AU)’s Placement Puts The Skids On Near-Term M&A and more

By Smartkarma Daily Briefs | Daily Briefs, Equity Bottom-Up

In today’s briefing:

Austal (ASB AU)’s Placement Puts The Skids On Near-Term M&A
Japan Steel Works (5631) | Artillery Giant Reloads for Growth
Asia Real Estate Tracker (11-Mar-2025): Singapore buying Sydney office for $70M.
Goldlion Holdings (533 HK) Privatization – The Offer Price Is Acceptable
IndusInd Bank: Derivative Discrepancy Surfaces, Raising Governance Concerns
The Intel Drama Goes On. No Buyer It Seems, Who Would? More Wafers Made at TSMC for Longer.
The Beat Ideas: Narayana Hrudayalaya Ltd (NHL) ~ Driving Growth from India to Cayman Islands
PDYN: Palladyne AI Leading in AI Software for Drones and Smart Machines
The Beat Ideas: Shilpa Medicare
GiG Works (2375 JP): Q1 FY10/25 flash update

Austal (ASB AU)’s Placement Puts The Skids On Near-Term M&A

Taking advantage of a doubling in its share price over the last year, Austal is tapping the market to fund the expansion of its US facilities to fulfil US Navy contracts.
Austal is placing out 52.6mn new shares (non-underwritten) at A$3.80/share – ~A$200mn all-in – a 15.6% discount to last close, and effectively tapping out its annual placement capacity.
Provided the placement is squared away, founder John Rothwell will unload $50mn of his own stock. As such, any M&A activity is now firmly on the backburner.

Japan Steel Works (5631) | Artillery Giant Reloads for Growth

By Mark Chadwick

Defense Windfall: JSW dominates Japan’s artillery market, set to benefit as defense spending triples, driving a 232% surge in defense sales to 80 billion yen by 2028.
Strategic Expansion: Exclusive forging capabilities secure JSW’s artillery monopoly, while investments in railguns and next-gen armoured vehicles fuel long-term growth.
Energy Tailwinds: JSW’s nuclear and offshore wind expertise ensures stable revenue, with reactor restarts and turbine foundations boosting its power segment’s profitability.

Asia Real Estate Tracker (11-Mar-2025): Singapore buying Sydney office for $70M.

By Asia Real Estate Tracker

Cambridge, a Singapore-based firm, purchases a Sydney office block for $70M from a former Tysan boss, expanding its real estate portfolio
Hong Kong Land reports a significant increase in losses, totaling $1.4B, attributed to challenges within its Central Portfolio
M&G Real Estate invests $62M in student housing in Melbourne, Australia, highlighting their focus on the Australian real estate market. Warburg Pincus forms a partnership with SK Group to develop Korean senior living facilities, tapping into the growing demand for elderly care in South Korea.

Goldlion Holdings (533 HK) Privatization – The Offer Price Is Acceptable

By Xinyao (Criss) Wang

In recent years, Goldlion is facing performance headwinds. Both revenue and net profit have shown a downward trend due to declining consumption, real estate crisis and unfavorable external factors.
In short term, the weak consumer confidence and market momentum are unlikely to improve. Goldlion’s performance may gradually pick up in 2026 and 2027 but is still in downward trend.
Considering the low trading liquidity, weak fundamentals, uncertainties on performance brought by Goldlion’s potential strategic transformation and the concerns on the outlook, we think the Cancellation Price is acceptable.

IndusInd Bank: Derivative Discrepancy Surfaces, Raising Governance Concerns

By Nimish Maheshwari

IndusInd Bank recently disclosed a significant accounting discrepancy in its derivatives portfolio, estimated to impact its net worth by INR 1,580 crore (~2.35%).
The issue pertains to internal trades executed over the past 7–8 years, now identified through a detailed internal review initiated following regulatory changes.
This development, when viewed alongside the abrupt CFO exit, regulatory pushback on CEO tenure, and existing operational challenges, raises concerns around internal controls, risk governance, and management credibility.

The Intel Drama Goes On. No Buyer It Seems, Who Would? More Wafers Made at TSMC for Longer.

By Nicolas Baratte

Following Broadcom CEO saying “no” and TSMC investing another US$100bn in Arizona, speculations of an Intel takeover have subsided.
On the increase, rumors of further Intel 18A delays and production push out. This means more outsourcing to TSMC for longer as mentioned by Intel’s IR last week.
Now is not a good time to buy Semiconductor stocks, but AMD and TSMC will benefit.

The Beat Ideas: Narayana Hrudayalaya Ltd (NHL) ~ Driving Growth from India to Cayman Islands

By Sudarshan Bhandari

Narayana Hrudayalaya Ltd (NARH IN) is a prominent player in the Indian healthcare sector, distinguished by its commitment to providing affordable, high-quality medical services.
The company established its first international hospital in the Cayman Islands in 2014, targeting patients from the Americas and Caribbean regions by offering competitively priced medical services
Management has outlined a capex guidance of around INR 4,000 crores over the next 3 to 4 years, funded by healthy cash flows and stable operating margins.

PDYN: Palladyne AI Leading in AI Software for Drones and Smart Machines

By Water Tower Research

Palladyne AI sells real-time learning and reasoning AI software platforms for robots, drones, and smart industrial systems.
The company engages in the design, development, and manufacturing of industrial robotic systems that augment human performance by combining human intelligence, instinct, and judgment with the strength, endurance, and precision of machines to enhance employee safety and productivity.
Its mobile robotic systems include the Guardian S, Guardian GT, Guardian XO, and Guardian XT. Palladyne AI was founded in 2015 and is headquartered in Salt Lake City, Utah.

The Beat Ideas: Shilpa Medicare

By Sudarshan Bhandari

Shilpa Medicare (SLPA IN) will begin commercializing new molecules across segments, driving growth to new heights as older products are phased out, ensuring sustained progress and innovation in its business.
In recent years, the company has experienced growth stagnation and declining profitability due to US FDA issues affecting both the company and its key client in the API segment.
The company’s pipeline of new molecules offers significant growth potential, with a single successful molecule poised to elevate the company to unprecedented levels over the next five years.

GiG Works (2375 JP): Q1 FY10/25 flash update

By Shared Research

GiG Works reported a revenue of JPY5.9bn, an 8.6% YoY decline, with all profit categories turning to losses.
The On-demand Economy business, accounting for 42% of Q1 revenue, saw a YoY decline in revenue and profit.
The Sharing Economy business achieved YoY revenue and profit growth, with a 10.8% revenue increase to JPY1.2bn.

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Mar 12

Daily Brief Macro: ASIA: Portfolio Positioning During US Bear Market and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

ASIA: Portfolio Positioning During US Bear Market
Trump-ism And East Asia
Steno Signals #188 – The Inflation Cry Wolf or a Big Wave in the Making!?
[US Nat Gas Options Weekly 2025/10] Henry Hub Rallies on Colder Weather and Record LNG Exports
[US Crude Oil Options Weekly 2025/10] WTI Extends Decline Amid Weak Demand and Trade Uncertainty
Gold’s Record Rally Meets Resistance: Will USD 3,000 Be the Breaking Point?
Iron Ore Majors Guidance: Key To Understanding Supply Side in 2025
China Business Cycle Investment Signals
[IO Technicals Weekly 2025/10]: Bearish Signals Deepen in IO Amid China’s Steel Production Cuts
CX Daily: China Plans Fiscal Overhaul to Fix Crisis in Local Government Finance

ASIA: Portfolio Positioning During US Bear Market

By David Mudd

The US has entered the first leg of its bear market. Administration officials have taken a “no pain, no gain” stance, with policy priorities taking precedence over market moves.
Sequencing problems start as tariffs and DOGE policies are enacted first, which negatively affect inflation and economic growth. Atlanta Fed GDPNow forecasts a recession within a year.
Asian markets will be pulled down as part of the US risk-off trade. Regarding relative performance, HK/China will benefit from the underweight exposure of foreign funds and better valuations.

Trump-ism And East Asia

By Alastair Newton

Donald Trump has abandoned the US-led international order, attempting to reshape global trade and finance.
This shift could have negative implications for East Asian economies.
East Asian economies may be forced by Washington into a Chinese sphere of influence as part of a grand bargain with Beijing.

Steno Signals #188 – The Inflation Cry Wolf or a Big Wave in the Making!?

By Andreas Steno

Happy Monday, and welcome to our editorial on everything macro! This is the place where we challenge the consensus narrative to uncover the best risk/reward trades and views in the world of macro.
The tariffs, despite all the bizarre flip-flopping, are going live to some extent this month.
We know that China has been hit with two rounds of 10%-point tariffs, while Mexico and Canada are facing 25% tariffs (with numerous exemptions).

[US Nat Gas Options Weekly 2025/10] Henry Hub Rallies on Colder Weather and Record LNG Exports

By Suhas Reddy

For the week ending 07/Mar, U.S. natural gas prices surged by 14.7% on the back of colder weather forecasts, rising LNG exports, and supply constraints.
Henry Hub posted its biggest weekly gain since January, hitting a 26-month high during the week ending 07/Mar. Prices closed above the 9-day and 21-day moving averages.
Henry Hub OI PCR was 1.00 on 07/Mar, unchanged from 28/Feb. Call OI rose by 8.7% WoW, while put OI grew by 8.6%.

[US Crude Oil Options Weekly 2025/10] WTI Extends Decline Amid Weak Demand and Trade Uncertainty

By Suhas Reddy

WTI futures fell by 3.9% for the week ending 07/Mar, marking its seventh consecutive weekly drop. Prices fell due to trade tensions, rising U.S. crude inventories, and demand concerns.
The U.S. rig count fell by one to 592, ending a five-week gain streak, with oil rigs unchanged at 486 and gas rigs down by one to 101.
WTI OI PCR fell to 0.91 on 07/Mar from 0.98 on 28/Feb. Call OI increased by 13.1% WoW, while put OI rose by 5.3%.

Gold’s Record Rally Meets Resistance: Will USD 3,000 Be the Breaking Point?

By Pranay Yadav

Geopolitical risk and central bank purchases continue to support gold demand, but rising Treasury yields present headwinds. Physical imports to the U.S. are plateauing, easing supply constraints.
Gold prices are facing resistance at USD 3,000/oz, with technical indicators suggesting potential consolidation before further upside. Historical patterns indicate similar conditions led to stagnant prices.
Gold leasing rates have normalized, signaling reduced supply stress. Previous spikes above 5% indicated a temporary supply shock, but the recent decline suggests a more balanced market.

Iron Ore Majors Guidance: Key To Understanding Supply Side in 2025

By Sameer Taneja

Iron ore majors guide flattish growth for 2025, while China continues to have strong iron ore imports (4.2% YoY for CY24), despite weak steel production (-1.1% YoY).
Significant capacity growth commences in CY26 with the ramp-up of Rio Tinto Ltd (RIO AU)’s Simandou project, equivalent to 6% of global seaborne trade ~100 million tons.
We believe the iron ore price will be rangebound until 2026 (between 100-120 USD/ton), after which it is highly probable that it will decline to 80-90 USD/ton.

China Business Cycle Investment Signals

By Sharmila Whelan

The Chinese economy is yet to bottom and the corporate sector’s troubles are far from over. The same goes for the property sector. Consumers are still risk averse.
Trading Post has a neutral stance on equities as an asset class but is a selective buyer of certain stocks and growth sectors.
These include AI, high tech – software and hardware, robotics and electronics. An underweight on consumer discretionary, property and export cyclicals as well as bonds and the rmb maintained.

[IO Technicals Weekly 2025/10]: Bearish Signals Deepen in IO Amid China’s Steel Production Cuts

By Pranay Yadav

Iron ore futures declined by USD 1.75/ton last week, closing at USD 100.45/ton on March 7, trading within a narrower USD 3.90/ton range.
Technical indicators confirm bearish momentum, with a death cross, MACD signaling weakness, and RSI nearing oversold conditions at 36.61.
Market sentiment remains fragile due to China’s steel production cuts, declining imports, and escalating U.S.-China trade tensions, despite potential stimulus measures.

CX Daily: China Plans Fiscal Overhaul to Fix Crisis in Local Government Finance

By Caixin Global

Fiscal / Cover Story: China plans fiscal overhaul to fix crisis in local government finance
Cranes /In Depth: Power lines push endangered birds to the edge
CPI /Drop in China CPI fuels deflation concerns

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Mar 12

Most Read: Nikkei 225, Snt Corp, Seven & I Holdings, Kuang-Chi Technologies , JX Advanced Metals, Makino Milling Machine Co, Delta Electronics Thailand , ESR Group , Korea Stock Exchange Kospi Index and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Index Rebalance Strategy YTD Performance: Not Many Places to Hide in Asia
7&I (3382) – Artisan Writes (Again) And 7&I Updates (Again) – More Positive Outlook Now
Sparx Launches Another Offensively Underpriced Takeover at a Fat Premium – SNT (6319) +94%
7&I (3382) Update – Couche-Tard Responds
CSI300 Index Rebalance Preview: 7 Changes a Side as Market Trades in a Range
JX Advanced Metals (5016 JP) IPO: Big Retail Allocation Means No Fast Entry
Makino Milling Machine (6135 JP): A White Knight Bidder Is Emerging
SET50 Index: Market Moves Adjust for Consultation Proposal; DELTA in the Crosshairs (Again)
ESR (1821 HK) Chips Away At Pre-Cons
Properly Interpreting Korea’s Stock Borrow Data for Short Selling

Index Rebalance Strategy YTD Performance: Not Many Places to Hide in Asia

We look at the performance of the index rebalance strategy over the year using weekly forecasts. In short, it has been a mixed bag for Asia.
India and China have been among the worst performing markets in the region while Australia and Korea have been among the better performers.
A lot of the outperformance appears to be front loaded, so getting the forecasts right early in the review period is of paramount importance.

7&I (3382) – Artisan Writes (Again) And 7&I Updates (Again) – More Positive Outlook Now

On Thursday 6 March we got a Nikkei article then a company announcement for Seven & I Holdings (3382 JP)‘s proposed management measures and update on ACT Bid Process.
It involved Isaka-san stepping down, Stephen Dacus stepping up, selling York to Bain for ¥814.7bn, IPOing 7-Eleven US, a ¥2trln share buyback over 5yrs, and ACT process update.
It was OK. Good, bad, and ugly. But Artisan wrote a letter over the weekend and 7&i responded and suddenly, their concerns are mostly addressed and the outlook is different.

Sparx Launches Another Offensively Underpriced Takeover at a Fat Premium – SNT (6319) +94%

Sparx on Friday announced a Tender Offer at 0.55x book and an EV of less than inventory (<20% of revenue) for Snt Corp (6319 JP) – another metal monozukuri company.
Last year they did it on IJTT Co., Ltd. (7315 JP). That one got bumped. This one could too, but cross-holders own nearly 60%.
This kind of company has skill-sets which may be portable but the product line is tied to old Japan. The takeover

7&I (3382) Update – Couche-Tard Responds

On 10 March, Alimentation Couche-Tard (ATD CN) issued a release “UPDATE ON PROPOSAL FOR A COMBINATION WITH SEVEN & i“.
They felt obliged to be transparent in the wake of the 7&i Letter To Shareholders released yesterday. The content/nuance of the two letters differ significantly.
Two parties competing to get a truth which cannot be both could be problematic. We are still many months away from any kind of ACT/7-11 deal.

CSI300 Index Rebalance Preview: 7 Changes a Side as Market Trades in a Range

There could be 7 changes at the June rebalance with the Information Technology sector gaining 3 index spots and the Materials sector losing 3 spots.
We estimate one-way turnover of 1.45% at the rebalance leading to a round-trip trade of CNY 28.1bn (US$3.9bn). There are 6 stocks with over 2x ADV to trade.
There have been redemptions in mainland China ETFs over the last couple of months and that leads to a lower impact on the stocks compared to the last rebalance.

JX Advanced Metals (5016 JP) IPO: Big Retail Allocation Means No Fast Entry

JX Advanced Metals (5016 JP) has priced its IPO at ¥820/share, at the top end of the IPO range but lower than the initial indication of ¥862/share.
With the bulk of the domestic offering going to retail investors, there is no chance of Fast Entry for the stock in global indices.
TOPIX INDEX inclusion will take place at the close on 28 April, while inclusion in major global indices is likely to take place in August and September.

Makino Milling Machine (6135 JP): A White Knight Bidder Is Emerging

By Arun George

Makino Milling Machine Co (6135 JP) has disclosed that it has received initial letters of intent from multiple third parties, reportedly private equity funds, to launch a competing tender offer.
My analysis suggests that a white knight bid could be as high as JPY13,284, 20.8% higher than Nidec’s JPY11,000 offer and 10.2% higher than the last close price of JPY12,050.
Nidec Corp (6594 JP) will take a wait-and-see approach. However, regardless of whether a white knight bidder emerges, Nidec will eventually have to bump.

SET50 Index: Market Moves Adjust for Consultation Proposal; DELTA in the Crosshairs (Again)

On 4 February, the SET floated a consultation paper on capping stocks in the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) at 10%.
The move was aimed at Delta Electronics Thailand (DELTA TB) since it was the only stock with an index weight higher than 10%.
Delta Electronics Thailand (DELTA TB) has slid since then and at the current weight of 9.27% will not need to be capped. The market has adjusted for it.

ESR (1821 HK) Chips Away At Pre-Cons