In today’s briefing:
- Merger Arb Mondays (18 Aug) – Santos, Shibaura, ENN Energy, Kangji, OneConnect, Smart Share
- Relative Value Opportunities in Asia-Pac, Pair Trade Roundup (18 Aug)
- Macquarie (MQG AU) Vs. ANZ (ANZ AU): Statistical Arbitrage in Aussie Bank Pair
- CBA (CBA AU) Vs. Bank of Queensland (BOQ AU): Quant Signal Flags Trading Opportunity
- Fenix Resources Tripling of Production Achieved, 1.2x Price/OCF
- Buybacks, Dividends Define Telstra’s Future
Merger Arb Mondays (18 Aug) – Santos, Shibaura, ENN Energy, Kangji, OneConnect, Smart Share
- I 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: Smart Share Global (EM US), Mayne Pharma (MYX AU), ENN Energy (2688 HK), Santos Ltd (STO AU), Joy City Property (207 HK), Oneconnect Financial Technology (6638 HK).
- Lowest spreads: Bright Smart Securities (1428 HK), Pacific Industrial (7250 JP), Shibaura Electronics (6957 JP), Ci Medical (3540 JP), Soft99 Corp (4464 JP), Ainsworth Game Technology (AGI AU).
Relative Value Opportunities in Asia-Pac, Pair Trade Roundup (18 Aug)
- Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.
- Highlight: Currently seven pair trade opportunities across two markets and two sectors persist.
- Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.
Macquarie (MQG AU) Vs. ANZ (ANZ AU): Statistical Arbitrage in Aussie Bank Pair
- Context: The Macquarie (MQG AU) vs. ANZ (ANZ AU) price-ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
- Highlights: Going long Macquarie (MQG AU) and short ANZ (ANZ AU) targets a 5% return to the statistical mean reversion level.
- Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.
CBA (CBA AU) Vs. Bank of Queensland (BOQ AU): Quant Signal Flags Trading Opportunity
- Context: The Commonwealth Bank (CBA AU) vs. Bank of Queensland (BOQ AU) price-ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
- Highlights: After Commonwealth Bank’s sharp post-earnings drop last week, a mean-reversion model suggests long Commonwealth Bank of Australia (CBA AU) and short Bank Of Queensland (BOQ AU).
- Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.
Fenix Resources Tripling of Production Achieved, 1.2x Price/OCF
- Fenix Resources (FEX AU) commenced operations of its third mine, the Beebyn-W11, with the shipment of 60k tons from the port of Geraldton.
- Beebyn-W11, Fenix’s third operating mine in the Midwest, is now operating at the planned FY26 production rate of 1.5 million tonnes per annum (Mtpa).
- As a result, Fenix is now mining, hauling, loading and shipping at a combined run rate of more than 4Mtpa from the Company’s three mines.
Buybacks, Dividends Define Telstra’s Future
- Telstra is guiding to subdued mobile growth in FY26 as the cost of living bites.
- Earnings growth relies on cost cutting and satellite development.
- -Telstra’s FY25 in line, FY26 prognosis subdued -Cost of living driving customers to cheaper options -Major staff reductions to drive cost-outs -Satellite service critical to maintaining dominance
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