Daily Brief Financials: Insignia Financial, Jio Financial Services, Hang Seng Index, NIFTY Index, Otc Markets Group and more

• Last month, wealth manager Insignia Financial (IFL AU)  announced – and subsequently rejected – a A$4.00/share non-binding and indicative proposal from PE outfit Bain Capital.
• The question was whether Bain returned to the well, in a space where Regal (RPL AU) recently binned its Platinum (PTM AU) tie-in; and Perpetual (PPT AU)‘s carve-out has hit a snag. 
• Roughly two weeks after that Bain rejection, US-based asset investment manager CC Capital Partners has now tabled a A$4.30/share, in cash, non-binding Offer. That’s probably enough for Insignia to engage. 

• Zomato (ZOMATO IN) and Jio Financial Services (JIOFIN IN) should replace Bharat Petroleum Corp (BPCL IN) and Britannia Industries (BRIT IN) in the NIFTY Index (NIFTY INDEX) in March.
• Passive NIFTY Index trackers will need to trade at least 4.5x ADV and 8.8x delivery volume on the stocks. There is some opposite flow from Nifty Next 50 Index trackers.
• There does not appear to be a lot of positioning in Jio Financial Services (JIOFIN IN) and the stock could outperform its peers over the next few months.

• This Insight analyzes Hang Seng Index (HSI INDEX) tailor-made option strategies over the last five trading days, providing strategy analysis, trends, highlights, and volatility context.
• Despite the holidays and generally low volume, last week saw some interesting strategies traded.
• The highest premium earned was for a January ’25 Butterfly. The largest trade was a January ’25 Bull Call Spread, reflecting the popularity of long volatility strategies and spreads.

• IVs higher alongside the underlying index. Weekly expiry (02.01.2025) served as the inflection point sending IVs back down. Monthly IVs: 12.7% (Open) -> 14.4% (02.01.2025) -> 13.3% (Close).
• Vol Term-structure swung between Contango & Backwardation around expiry date. Skew in Monthly contracts compressed as IVs moved higher. Smile unchanged. 
• Trading Strategy Implications: Reengage Smile/ Vega harvesting structures. Abandon wait-and-watch stance – “High & Down” vol state confirmed. 

• OTC Markets Group, Inc has a strong moat and capital light business model with high returns on equity and minimal capital expenditure
• The company has a long growth runway with mid-high single digit revenue growth forecasted over the next five years and low-40% EBITDA margins
• CEO owns 27% of the company, leading to aligned interests, and operates as marketplaces rather than exchanges, resulting in favorable regulatory implications and lower capital requirements.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.