In today’s briefing:
- FTSE EPRA Nareit Index Rebalance: One Deletion for Australia
- A Blessing in Disguise
- FTSE UK Dec 22 Rebal: Quiddity Announcement Day Thoughts
- EQD | FXI (FXI US): – Could Chinese Equities Lead the Way Higher? Use Options for Delta-Revisited
- Saratoga Investama Sedaya (SRTG IJ) – A World of Indonesian Themes
- Sunshine Insurance Group IPO: Valuation Insights
- South Korean Banks Screener; Hana Financial in the Positive Spotlight
FTSE EPRA Nareit Index Rebalance: One Deletion for Australia
- There are no adds for the FTSE EPRA Nareit Developed Asia Index in December. The only deletion is Home Consortium Ltd (HMC AU).
- Passive trackers are estimated to sell 12x ADV on Home Consortium Ltd at the close 16 December. Short interest is nearly the same and there could be some covering.
- Home Consortium Ltd (HMC AU) has underperformed its peers over the last 12 months and still trades more expensive to its peer group.
A Blessing in Disguise
- We try to stay away from the fool’s errand of forecasting the economy;
- But often, we notice that high-quality businesses actually benefit from harsh economic conditions in terms of (long-term) shareholder value;
- We provided an example of a company that we own to illustrate how.
FTSE UK Dec 22 Rebal: Quiddity Announcement Day Thoughts
- The December 2022 Rebalance of the FTSE UK Index series will be based on the closing prices of 29th November 2022.
- The results will be announced after market close later today (30th November 2022).
- Below are Quiddity’s final expectations for index changes and flow parameters for the December 2022 Rebalance event. You have the day to trade this.
EQD | FXI (FXI US): – Could Chinese Equities Lead the Way Higher? Use Options for Delta-Revisited
- Chinese equities have been on a volatile path but are finally gaining some upside momentum
- Dollar seems to have peaked and USDCNH is retreating with renewed optimism for the Chinese economy reopening.
- We revisit the trade and look at potential restructuring options
Saratoga Investama Sedaya (SRTG IJ) – A World of Indonesian Themes
- Saratoga Investama Sedaya (SRTG IJ) is the leading listed investment company with stakes in a number of leading companies across sectors in Indonesia with some of the highest growth potential.
- Investments include stakes in Adaro Energy, Merdeka Copper Gold, Tower Bersama Infrastructure, Mitra Pinasthika Mustika, and Aneka Gas (AGII IJ), and a number of tech companies providing unique thematic exposure.
- Saratoga Investama Sedaya (SRTG IJ) provides a one-stop shop to get well-rounded exposure to high-growth areas of the Indonesian economy and to early-stage growth companies in the digital space.
Sunshine Insurance Group IPO: Valuation Insights
- Sunshine Insurance (6963 HK) has launched its HKEx listing at HK$5.83-6.45 per share to raise up to US$951 million. Books are open from 30 November to 5 December.
- We previously discussed the IPO in Sunshine Insurance Group IPO: The Bull Case and Sunshine Insurance Group IPO: The Bear Case.
- At the IPO price range, Sunshine trades at a significant premium to median peer multiples. Therefore, we would avoid the IPO.
South Korean Banks Screener; Hana Financial in the Positive Spotlight
- Six of the seven South Korean banks screen favourably on valuation versus returns metrics to September 2022; we add Hana Financial, to our buy rating on KB Financial
- Hana has undemanding valuations, and improving pre-provision and post-provision returns, it also has sound core capital ratio of close to 13%
- We remain neutral on digital bank KakaoBank where we are deterred by high cost of risk metrics relative to its peers; we continue to seek positive catalysts on this name
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