Daily Brief Energy/Materials: Kasumigaseki Capital, LG Chem Ltd, Dian Swastatika Sentosa, Peric Special Gases, Gold, Crude Oil, Copper, High Arctic Overseas Holdings, ThyssenKrupp AG and more

• On Friday, Kasumigaseki Capital (3498 JP) announced Aug-25 earnings and a combination ¥45-50bn primary+secondary offering worth 5.3mm shares, 6x ADV, and a float increase of 37%. Shares fell 15% today.
• 2yrs ago they did a large offering. It went well. They’d had a ridiculous plan to grow OP 6x from ¥3.5bn to ¥20bn in 2yrs to Aug-26. Then by Aug-25. 
• They got to ¥8.5bn in Aug-24 and now ¥18.9bn in Aug-25 and now guide to ¥26.5bn in Aug-26 (the original plan having been ¥20bn). 

• Last week, London-based activist Palliser Capital tapped LG Chem (051910 KS) to remedy its NAV market discount. Palliser also said it now holds a little over 1% in LG Chem.
• LG Chem’s large NAV discount is well known. It has been present since ~82%-held LG Energy Solution (373220 KS) (LGES) was listed in January 2022. 
• An obvious solution is to pare down the LGES stake, and buy back shares. Yet the discount remains as the market views management as being (stubbornly) set in their ways.

• There are 2 constituent changes for the IDX30 Index, 5 changes for the LQ45 Index, and 7 changes for IDX80 Index to be implemented at the close on 31 October.
• The largest passive flows are expected in Dian Swastatika Sentosa, Bank Central Asia, Bank Mandiri, Emtek, Bumi Resources, Bank Syariah Indonesia, XLSMART Telecom Sejahtera and Medikaloka Hermina.
• With only 4 days to implementation, there could be relatively big moves on stocks that have large flow/impact from passive fund trading.

• CSI All Share Semiconductors Index represents the largest and most-liquid stocks in the Semiconductor Industry Group from the Shanghai, Shenzhen, and Beijing Exchanges.
• In this insight, we have presented our final expectations for ADDs and DELs for the upcoming semiannual index rebal event in December 2025.
• We expect up to four ADDs and two DELs for the CSI All Share Semiconductors Index during this index review event based on the latest available data. Flows are small.

• Our strategy approach is to filter various information sources and apply our clear investment process on top of it.
• There are two reasons for us to enter a trade: …our quant system tells us to do so …or we make a discretionary manager decision based on market fundamentals that the quant system will only grasp with a time-lag
• While not only moving sideways, the oil complex is currently drastically underperforming other parts of the commodity complex.

• Crude prices were mixed Friday, but consolidated the sharp rally driven by new US sanctions on Russia’s top oil producers, as both benchmarks headed for their biggest weekly gain since June.
• Front-month December ICE Brent was up to $66.01/b at 2011 BST, while December NYMEX WTI dipped slightly to $61.58/b , after jumping more than 5% on Thursday.
• The pullback followed Washington’s sanctions on Rosneft and Lukoil, which together account for roughly half of Russia’s crude output and exports.

• Global monetary shifts and diversification from the U.S. dollar are creating a favorable environment for gold, supported by central bank activity and strong physical demand.
• The market is showing signs of declining volatility after a recent price drop, suggesting an opportune moment for strategic options trading.
• Careful consideration of resistance levels and downside risks is key to optimizing this particular market strategy.

• Turbulent macro backdrop with concerns over US-China trade relations and credit quality affecting global economy and metals demand
• Mixed sentiments on copper market balances for next year, with varying views on supply from DRC and Chinese demand
• Aluminium narrative looking positive with China’s X supply growth and debate on market balances centered around capacity ramp up from Indonesia

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

I had a chance to talk to the management team from High Arctic Overseas this week, and I came away encouraged.

The stock is trading at a negative enterprise value, but we are seeing signs of stability in the business and a potential upward inflection.

The management team is entrepreneurial and working to cut its cash burn down to zero. 

• Before I get into my regular update, I want to flag one chart that caught my eye.
• The chart below shows that margins have held in there in the face tariffs. This is somewhat surprising to me.
• This week was relatively quiet on the open-recommendations front, but I expect the news flow to pick up in the coming weeks as earnings season gets underway