Daily Brief Financials: Aruhi Corp, Dongzheng Automotive Finance, Hong Kong Hang Seng Index, CIMB Group Holdings, Mirae Asset TIGER Secondary Cell ETF, Sino-Ocean Group, Ethereum and more

• Yesterday, SBI Holdings (8473 JP) announced it would launch a tender offer to buy 33.4-51% of Aruhi Corp (7198 JP) at ¥1,500/share – a 48.5% premium to the close. 
• ARUHI – Japan’s largest “mortgage bank” – was listed in late 2017. Long ago, its predecessor was named SBI Mortgage. This is SBI buying back in. 
• Inside we look at valuations, shareholder structure, pro-ration. There are opportunities here.

• Back on the 19 May, SAIC (600104 CH) acquired China Zhengtong Auto Services (1728 HK)‘s 71.04% stake in Dongzheng Automotive Finance (2718 HK) at a judicial auction. This triggered the mandatory Offer.
• SAIC confirmed a possible unconditional mandatory cash Offer for Dongzheng on the 26 May.
• The Composite Doc has now been dispatched. The Offer is open for tendering and closes on the 16 October

• Dongzheng Automotive Finance (2718 HK)‘s composite document is out with the offer open from 15 September to 6 October. The IFA considers the offer to be fair and reasonable.
• SAIC Motor (600104 CH), which acquired a 71.04% stake, has launched an unconditional MGO at HK$1.2430 per H Share. SAIC intends to maintain Dongzheng’s listing status.
• At the last close and the 17 October payment, the gross and annualised spread to the MGO price is 1.1% and 13.3%, respectively.

• HSI INDEX is trading back down to recent lows and support levels. It looks oversold and there are potential catalysts for a bounce
• Implied vols are low and options offer a great way to play a tactical long
• We highlight a relative value vol trade vs the SPX

• The six Malaysian banks screen favourably on balance sheet and returns metrics to June 2022; we add CIMB to the buy list, keep RHB and we remove Maybank
• We add CIMB with its positive post-provision return trends and further potential which combine constructively with CIMB’s undemanding valuations versus the peer group; its high NPL ratio is fully provisioned
• We stick with RHB, with its attractive post-provision profitability and positive cost of risk trends, whilst also trading on attractive multiples versus peers and on a relatively low PEG

• The rebalancing trading will be at the close on October 13. The AUM currently amounts to ₩1.32T with 28 constituents, implying that the passive impacts wouldn’t be insignificant.
• It will likely show a similar pattern to the last rebalancing. With no constituent change, weight adjustment by 10% cap of top stocks leads to weight adjustment of the rest.
• An important variable here is the entry of newly listed stocks. SungEel Hitech and Sebitchem, the two larger cap stocks, appear to have a reasonably high inclusion probability.

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 SCE
• CIFI Holdings
• Fosun International
• Sino-Ocean Service
• Vedanta Resources

• By now, you probably already know the basics of the Merge, so let’s dive into how markets reacted, both in the run-up and in the immediate aftermath.
• We will explore pre- and post-Merge markets, looking closely at derivatives, spot markets, liquidity, staked ETH, and proof-of-work alternatives to ETH.
• Derivatives markets dominated ETH market activity in the month preceding the Merge, with the derivatives to spot volume ratio surging at the fastest rate ever observed.