In today’s briefing:
- ESR (1821 HK) Chips Away At Pre-Cons
- Properly Interpreting Korea’s Stock Borrow Data for Short Selling
- IndusInd Bank (IIB IN): Stock Crashes on Derivatives Losses; Index Selling Next
- Asia Real Estate Tracker (11-Mar-2025): Singapore buying Sydney office for $70M.
- IndusInd Bank: Derivative Discrepancy Surfaces, Raising Governance Concerns
- Bank of Baroda QIP Early Look – Well Flagged but Last Deal Did Not Do Well
- TRC: Potential Upcoming Catalysts Include Opening of First Terra Vista Units
- Lucror Analytics – Morning Views Asia
ESR (1821 HK) Chips Away At Pre-Cons
- When the Starwood/Warburg Pincus Consortium announced a firm offer on the 4th December, it was pre-conditional on a raft of regulatory approvals from no less than eight countries/jurisdictions.
- We’re half way there, with four approvals now squared away, leaving Australia, China, Hong Kong and New Zealand still to give the go ahead.
- Irrevocables comprising 34.26% of the register (and 57.01% of disinterested shares) are now in the bag. This is a done deal. It’s just a question of timing.
Properly Interpreting Korea’s Stock Borrow Data for Short Selling
- Local instos borrow from brokers or peers, KSD collects and cleans the data, then KOFIA reports stock borrow balances daily with a two-day lag.
- Offshore borrows via EquiLend or PB deals don’t show up—KSD reporting only covers local institution-to-institution stock loans.
- Assume 60% of reported borrow balance is real shortable ammo—adjusting for this helps filter out noise in short positioning.
IndusInd Bank (IIB IN): Stock Crashes on Derivatives Losses; Index Selling Next
- The Indusind Bank (IIB IN) stock was down 27% yesterday following the announcement of Derivatives Portfolio losses that have wiped out 2.35% of equity.
- Foreign investors were big sellers in the last 3 months of 2024. That led to increased foreign room, leading to an index upweight in February and index inclusion in March.
- The drop in market cap and free float market cap will see Indusind Bank (IIB IN) deleted from the S&P BSE SENSEX Index in June and the NIFTY Index in September.
Asia Real Estate Tracker (11-Mar-2025): Singapore buying Sydney office for $70M.
- Cambridge, a Singapore-based firm, purchases a Sydney office block for $70M from a former Tysan boss, expanding its real estate portfolio
- Hong Kong Land reports a significant increase in losses, totaling $1.4B, attributed to challenges within its Central Portfolio
- M&G Real Estate invests $62M in student housing in Melbourne, Australia, highlighting their focus on the Australian real estate market. Warburg Pincus forms a partnership with SK Group to develop Korean senior living facilities, tapping into the growing demand for elderly care in South Korea.
IndusInd Bank: Derivative Discrepancy Surfaces, Raising Governance Concerns
- IndusInd Bank recently disclosed a significant accounting discrepancy in its derivatives portfolio, estimated to impact its net worth by INR 1,580 crore (~2.35%).
- The issue pertains to internal trades executed over the past 7–8 years, now identified through a detailed internal review initiated following regulatory changes.
- This development, when viewed alongside the abrupt CFO exit, regulatory pushback on CEO tenure, and existing operational challenges, raises concerns around internal controls, risk governance, and management credibility.
Bank of Baroda QIP Early Look – Well Flagged but Last Deal Did Not Do Well
- Bank Of Baroda (BOB IN) is looking to raise about INR 85bn (US$980m) in its upcoming qualified institutional placement (QIP).
- In an announcement released on Feb 13, 2025, BOB mentioned its board’s approval to raise upto INR85bn via various modes including a QIP. Since then, the shares have corrected 1.2%.
- The deal would be a relatively large one to digest at 39 days of three month ADV. The company’s last fundraise did not do well.
TRC: Potential Upcoming Catalysts Include Opening of First Terra Vista Units
- The convenience and affordability of Terra Vista housing, as well as proximity to LA, are expected to drive demand from TRCC employees and others.
- The development of the nearby Hard Rock Hotel & Casino Tejon is another likely driver of demand for affordable housing from its employees.
- Upon completion, Terra Vista at Tejon is expected to be the largest rental community in Kern County.
Lucror Analytics – Morning Views Asia
- In today’s Morning Views publication we comment on developments of the following high yield issuers: Yuexiu Property, Adani Energy Solutions
- In the US, treasuries climbed on safe-haven demand and increased expectations of Fed rate cuts, amid growing concerns over the US economy. The UST curve bull-steepened, with the yield on the 2Y UST declining 12 bps to 3.89%, while the yield on the 10Y UST fell 9 bps to 4.22%. Fed-dated OIS were pricing in 81 bps of rate cuts this year, with the first decrease expected in June.
- Equities sank on rising economic uncertainty, given rising trade tensions and after US President Donald Trump’s comments that the economy is facing a “period of transition” this year. The S&P 500 fell 2.7% to 5,615, while the Nasdaq slid 4.0% to 17,468.
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