Utilities Sector

• Adani Power faced nearly USD 900 million in overdue receivables from its 1,600 MW Godda plant under a long-term export PPA.
• Bangladesh resumed regular payments and cleared USD 437 million in June; future dues secured via Letter of Credit and sovereign guarantee.
• Working capital improves over 40%, interest costs fall by ₹300–400 crore, and credit upgrade likely; boosts cash flow and strategic flexibility.

• Khazanah is looking to raise up to US$300m via selling 1.5% of Tenaga Nasional (TNB MK).
• Khazanah has sold multiple times before and hence, the selldown is unlikely to come as a surprise.
• In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: China Water Affairs
• Front-end treasury yields rose yesterday, following stronger than expected JOLTS and ISM manufacturing reports (which tempered expectations of Fed easing). The yield on the 2Y UST rose 5 bps to 3.77%, while the yield on the 10Y UST was up 1 bp at 4.24%.
• Equities retreated, as investors rotated out of tech stocks. The S&P 500 inched down 0.1% to 6,198 (albeit remaining near record high levels), while the Nasdaq fell 0.8% to 20,203.

• Extra Edition of the Broker Call Report

• Contact Energy (CEN NZ) is acquiring Manawa Energy Ltd (MNW NZ) for NZ$1.12/share in cash and 0.583 Contact Energy shares for each share of Manawa Energy.
• Manawa Energy (MNW NZ) is expected to stop trading after the close on 7 July. There will be passive inflows for Contact Energy (CEN NZ) due to increased index shares.
• As a replacement for Manawa Energy Ltd (MNW NZ), there will be an ad hoc inclusion to the S&P/NZX 50 Index at the close of 7 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: Mayne Pharma (MYX AU), Insignia Financial (IFL AU), ENN Energy (2688 HK), Smartpay Holdings (SPY NZ), Seven & I Holdings (3382 JP), Santos Ltd (STO AU). 
• Lowest spreads: Bright Smart Securities And (1428 HK), Ascentech KK (3565 JP), Brickworks Ltd (BKW AU), Toyota Industries (6201 JP), Avjennings Ltd (AVJ AU), Hainan Meilan International Airport (357 HK). 

• Naturgy’s auto-OPA was oversubscribed, leading to a low 10.27% proration and diminished arbitrage fill for public investors.
• Share price recovery post-offer (€27.30) boosted returns above modeled expectations.
• Planned treasury share placements may significantly increase free float and MSCI/FTSE index weights by 2026.

• Constellation Energy Corporation’s first-quarter earnings provided a detailed view into its financial and operational positions, as well as strategic undertakings in the current energy landscape.
• The company reported GAAP earnings of $0.38 per share and adjusted operating earnings of $2.14 per share, indicating a strong performance characterized by a robust commercial outcome and effective portfolio management against market volatility.
• 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.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Perusahaan Listrik (PLN), Vedanta Resources
• US treasuries ended little changed yesterday. Yields inched down earlier in the day, after the Fed retained its projections for two rate cuts this year, but rebounded after Fed Chairman Jerome Powell reiterated the risk of higher inflation from tariffs. The yield on the 2Y UST fell 1 bp to 3.94%, while that on the 10Y UST was unchanged at 4.39%.
• Similarly, equities ended flat, as a rally fizzled out following Mr Powell’s latest warning on tariffs. The S&P 500 was unchanged at 5,981, while the Nasdaq edged up 0.1% to 19,546. The US market is closed for Juneteenth today.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: ENN Energy, Vedanta Resources, Jababeka, Softbank Group
• Treasuries climbed yesterday, with long-end yields declining amid a risk-off sentiment driven by the escalating Iran-Israel conflict. The yield on the 2Y UST slid 1 bp to 3.95%, while the yield on the 10Y UST fell 6 bps to 4.39%.
• Equities retreated, after US President Donald Trump called for Iran’s “unconditional surrender” and following the release of weak retail sales and industrial production data. The S&P 500 and Nasdaq fell 0.8% and 0.9%, respectively, to 5,983 and 19,521, respectively.

• On the 26th March, ENN Energy (2688 HK) announced a cash/scrip Offer from ENN Natural Gas (600803 CH) (ENN-NG), its largest shareholder.
• The pushback is that the scrip portion pivots off the value of newly-listed ENN-NG H-shares. And the IFA’s theoretical assessment on such leaves a lot to be desired.
• A redacted version of ENN-NG’s application proof is now out. Curiously, the share ratio – new ENN-NG H Shares for each ENN shares – is noticeably absent

Jersey Electricity (JEL) recently released its H125 results, reporting group revenue growth of 9% y-o-y to £82.3m (H124: £75.6m), mainly due to the performance of its energy business. PBT remained relatively flat year-on-year at £10.5m, while cost of sales and operating costs increased 12% y-o-y, reflecting continuing inflationary pressures. Net cash on the balance sheet contracted to £8.5m from £16.7m last year, driven by a rise in capital expenditure as part of JEL’s £180m five-year strategic investment plan to improve its energy network and services. We maintain our previous estimates and valuation of 708p per share.

Rubis is a diversified energy distributor operating across more than 40 countries and three continents. Its flexible and agile business model allows it to absorb most of the commodity price volatility, benefiting from relatively stable gross margins across cycles. While energy distribution remains at the core of its operations, the recent expansion into solar power will see a growing earnings contribution from renewables, providing additional diversification and margin stability. We value Rubis at €37.4/share using a DCF approach. The shares trade at 2025e EV/EBITDA of 6.1x, yielding 7%.

Rubis is a diversified energy distributor operating across more than 40 countries and three continents. Its flexible and agile business model allows it to absorb most of the commodity price volatility, benefiting from relatively stable gross margins across cycles. While energy distribution remains at the core of its operations, the recent expansion into solar power will see a growing earnings contribution from renewables, providing additional diversification and margin stability. We value Rubis at €37.4/share using a DCF approach. The shares trade at 2025e EV/EBITDA of 6.1x, yielding 7%.

• BGRIM has announced a partnership with Digital Edge (Singapore) to jointly develop a 96MW data center project, with a medium-term target of 300MW by 2030E.
• This is expected to generate positive sentiment for the share price, as the project offers stable revenue and attractive returns (with an estimated equity IRR of around 12-13%).
• It is also expected to serve as a profit buffer in the medium term, with a full-MW and full-year profit contribution anticipated by 2029E, representing upside risk of around 10-14%.