In today’s briefing:
- FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: Updated Dividends & Flow Shift
- China VAST (6166 HK): 23 Nov Court Meeting. IFA Says Fair
- Hana – Granular Data On China
- HDFC Bank: Strong Results – In Line with Expectation
- Selected European Holdcos and DLC: October ‘22 Report
- Go Digit General Insurance Pre-IPO – The Negatives – Still Has a Lot to Explain
- Bajaj Finance: Continues to Scale Up Well
FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: Updated Dividends & Flow Shift
- Updated forward dividend estimates and price moves lead to changes in adds/deletes and to estimated flows at the December rebalance. We now see 26 adds and 5 deletes in December.
- The estimated one-way turnover due to adds, deletes, funding and capping is 46.6% and will result in a one-way trade of TWD 72.7bn (US$2.26bn).
- Passive trackers will need to buy over 5 days of ADV on 15 stocks and sell over 5 days of ADV on 14 stocks. There will be trading opportunities galore.
China VAST (6166 HK): 23 Nov Court Meeting. IFA Says Fair
- On the 9 June, Urban planner China VAST Industrial Urban Development (6166 HK) received a pre-conditional Offer, by way of a Scheme, from China Jinmao Holdings (817 HK).
- On the 17 October, China Jinmao and China VAST announced that all pre-cons for the HK$2.40/share Offer had been fulfilled.
- The Scheme Doc is now out. The Court Meeting will be held on the 23 November. The IFA says fair and reasonable. This is done and trading tight to terms
Hana – Granular Data On China
- Hana Financial Group reported a loss in its China banking business in 9MQ22
- Hana Bank (China) recorded credit costs at KRW119bn or 20% of group total
- Off balance sheet commitments in China appear to be moving on balance sheet
HDFC Bank: Strong Results – In Line with Expectation
- Annualized credit cost at 87bp was at the lowest in many quarters. This provides further room to the bank to invest for future growth.
- HDFCB continues to focus on enhancing its distribution presence, both physical and digital. It is continuing to add new branches. Its digital efforts are also paying off well.
- At a valuation of 20x P/E, HDFC Bank (HDFCB IN) is attractively priced and offers potential for 23%+ IRR over the next 3Y.
Selected European Holdcos and DLC: October ‘22 Report
- Discounts to NAV of covered holdcos have mainly tightened during October in line with the market recovery.
- Discounts to NAV (31 October): C.F.Alba, 48.7%; GBL, 34.4%; Heineken Holding, 18.3%; Industrivärden C, 9.8%; Investor B, 16.8%; Porsche Automobile Holding 41.8%. The spread of Rio Tinto DLC tightened to 8.4%.
- Spreads tend to widen in bear markets but short-term recoveries provide opportunities on tightening discounts. Recommended trades are: GBL, Rio Tinto (DLC), CF Alba (long position).
Go Digit General Insurance Pre-IPO – The Negatives – Still Has a Lot to Explain
- Go Digit General Insurance is looking to raise about US$503m in its upcoming India IPO. The deal will be run by ICICISec, MS, Axis, Edelweiss, HDFC Bank and IIFL.
- Go Digit General Insurance is a digital full stack insurance company, offering motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance and other insurance products.
- In this note, we talk about the not so positive aspects of the deal.
Bajaj Finance: Continues to Scale Up Well
- Bajaj Finance Ltd (BAF IN) reported a strong Q2FY23 earnings with an AUM growth of 7.0% QoQ and 31% YoY. AUM growth was broad-based with all business lines doing well.
- BAF is upbeat about its customer acquisition momentum and has upgraded its customer acquisition guidance for FY23 to 10-11mm vs 9-10mm earlier.
- Competitive intensity remains high, however, BAF continues to be disciplined around margins and risk management. Also, BAF’s increasing digital footprint is helping it to drive growth despite elevated competition.
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