In today’s briefing:
- Accounting for Soul Patts/Brickworks’ Feedback Loop
- Global Macro Outlook (June): From Rally to Reversal? Macro Trends Shift as June Unfolds
- The Beat Ideas: Astral ~ Leader in PVC Pipes, Riding the Restocking Cycle
- EOG Resources Doubles Down on Utica: What the $5.6 Billion Encino Acquisition Means for Shareholders!
- [ETP 2025/23] WTI Rises on Supply Disruptions, Henry Hub Gains on Summer Demand Outlook
- Horizon Minerals Ltd – Can a refurb lead to riches?
- Lucror Analytics – Morning Views Asia
- Hybridan Small Cap Feast: 28/05/2025
Accounting for Soul Patts/Brickworks’ Feedback Loop
- On the 2 June, Washington H. Soul Pattinson and Co. Ltd (SOL AU) (Soul Patts) and Brickworks Ltd (BKW AU), announced that, via inter-conditional Schemes, they would collapse their circularity.
- A new ASX-listed company (TopCo) would acquire all of the shares in Soul Patts and Brickworks, via the issuance of TopCo shares; 1:1 for Sout Patts, and 0.82:1 for Brickworks.
- Given the cross-holding, an interesting exercise is understanding the underlying values for both Soul Patts and Brickworks.
Global Macro Outlook (June): From Rally to Reversal? Macro Trends Shift as June Unfolds
- Most major indices extended their April rally through May, but seasonal patterns suggest caution from here.
- Implied volatility declined across most markets, but remains above historical medians in several key regions.
- Vol premium analysis highlights a few standouts where short vol has historically outperformed.
The Beat Ideas: Astral ~ Leader in PVC Pipes, Riding the Restocking Cycle
- Astral Ltd (ASTRA IN) is a market leader in CPVC and plastic piping systems, with growing presence in adhesives, paints, and water tanks it maintained margins despite industry’s headwinds.
- New launches like Fire Pro, OPVC, Drain Pro, and valves are expected to contribute INR 450–500 crore annually, driving high-margin growth and portfolio expansion.
- Dealers currently hold just 1–2 weeks of inventory, indicating an imminent restocking cycle that could boost near-term volumes.
EOG Resources Doubles Down on Utica: What the $5.6 Billion Encino Acquisition Means for Shareholders!
- EOG Resources has made a decisive strategic move by announcing its $5.6 billion acquisition of Encino Acquisition Partners (EAP), a major producer in the Utica shale play.
- Funded through $3.5 billion in debt and $2.1 billion in cash on hand—with no equity dilution—this deal marks a significant transformation in EOG’s portfolio.
- The acquisition increases EOG’s Utica footprint to over 1.1 million net acres and adds more than two billion barrels of oil equivalent (BOE) in undeveloped resource, positioning the Utica as a third foundational play alongside its Delaware Basin and Eagle Ford assets.
[ETP 2025/23] WTI Rises on Supply Disruptions, Henry Hub Gains on Summer Demand Outlook
- For the week ending 30/May, U.S. crude inventories fell by 4.3m barrels (vs. expectations of a 2.9m barrel decline). Meanwhile, gasoline and distillate stockpiles rose more than expected.
- The EIA reported a 122 Bcf storage build, while analysts forecasted a 111 Bcf increase. Storage levels are 4.7% above the five-year average but 10% below year-ago levels.
- JPMorgan sees Reliance earnings rebounding on better margins; Saudi Aramco cuts Asia crude prices after OPEC+ supply hike.
Horizon Minerals Ltd – Can a refurb lead to riches?
- Horizon Minerals Limited (ASX:HRZ) is an emerging junior gold producer with 1.8moz of gold resources located around the Kalgoorlie and Coolgardie regions of Western Australia.
- HRZ is currently engaged in two mining campaigns which will be toll treated or sold under ore sale and toll agreements with three mill operators in and around Kalgoorlie and Coolgardie.
- In the current gold price environment, we expect these mining campaigns to generate significant cash flows in FY26 which can support HRZ’s longer-term goal of becoming a standalone gold producer.
Lucror Analytics – Morning Views Asia
- Treasury yields fell 9-10 bps across the curve yesterday, as the weak ADP employment and ISM services data raised expectations for Fed rate cuts.
- The yield on the 2Y UST declined 9 bps to 3.87%, while that on the 10Y UST was down 10 bps at 4.36%.
- Equities were largely steady, with the S&P 500 unchanged and the Nasdaq up 0.3%.
Hybridan Small Cap Feast: 28/05/2025
- 12th May: Cobalt Holdings, a Company created primarily to purchase and hold physical cobalt, offering public equity investors pure-play direct exposure to the price of cobalt, confirmed its intention to raise approximately US$230m through its Global Offer and the Admission on to the Main Market on 10 June 2025.
- Glencore International AG and certain entities and affiliates managed by Anchorage Structured Commodities Advisor, have agreed to participate as cornerstone investors, agreeing to invest, in aggregate, an amount representing approximately 20.5% of the Shares to be offered pursuant to the Global Offer.
- 9th May: iFOREX Financial Trading, the fintech business with a proprietary online and mobile trading platform for multi-asset contracts for difference, announces that it has confirmed its intention to IPO onto the Main Market.
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