Daily Brief Energy/Materials: JSR Corp, VanEck Gold Miners ETF/USA, Texas Pacific Land , Criterium Energy, Nickel Industries and more

• In what is a surprising move to me, Murakami-san has gone substantial on JSR Corp (4185 JP) with the vast majority of his stake purchased at a spread of <0.05%.
• As suggested in JIC Launches a NOT-¥1trln Tender Offer for JSR (4185). Welcome? Yes. Overwhelming? Meh, the deal price was not overwhelming. It got less so as the market rose.
• But this is an odd target. High float. No competition. Would take a lot to block or force the bumpitrage, which suggests appraisal rights or a “technicality.” 

• Murakami’s City Index Eleventh entity reported a 5.11% position in JSR Corp (4185 JP). The share purchases started on 19 March, the day of the tender start.
• Murakami’s average buy-in price of JPY4,346.22 per share is broadly in line with the JPY4,350 tender offer. 
• Murakami’s disclosure suggests two possibilities: starting an activist campaign for a bump or pursuing the appraisal process to determine a fair value. We think the latter is likely. 

• We remain bullish on the S&P 500 and Nasdaq 100 (QQQ), as they both refuse to close below their 20-day MAs or 21-day EMAs for more than 2-3 consecutive days.
• Once we do get 2-3 closes below the 20-day MAs on SPX and QQQ, it would mark the beginning of a pullback (a potentially rapid one, at that)
• Next supports currently at 4983-5050 on the S&P 500 and $425-$433 on QQQ (gap supports from 2/22/24), but anything in the 4800-4930 SPX range is a buyable pullback.

• The best combination of events for TPL is energy prices and production going up. This year, production levels in the Permian Basin recovered quickly from the seasonal decline.
• The hinderance to TPL’s quarter could come from the price of natural gas, which declined throughout much of the first quarter due to the warmer winter weather
• A majority of TPL’s revenue is from crude oil and natural gas royalties with production becoming the biggest factor in each quarter

• The FY24 guidance reflects a self-funded development and debt repayment programme.
• While a reduced capital programme, we believe this is a prudent strategy with upside optionality should additional funds from the Bulu sale or higher oil prices materialize.
• As a result of the Bulu sale not completed yet, Criterium is carrying more debt than we expected (the repayment of US$5.5 mm of debt in March would have also triggered a US$3.8 mm debt write down).

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• China Hongqiao
• Nickel Industries