Daily Brief Financials: Japan Post Bank, China International Capital Corporation, Korea Stock Exchange KOSPI 200, Housing and Urban Development Corporation Limited, Costar Group, SelfWealth Ltd, EURO/US DOLLAR, Digital Realty Trust and more

• Media reports indicate that Japan Post Holdings (6178 JP) could sell JPY 600bn (US$4.02bn) of Japan Post Bank (7182 JP) with the announcement coming as early as this week.
• The selldown is driven by Japan Post Holdings (6178 JP) needing to reduce its holding in Japan Post Bank (7182 JP) to 50% or lower by March 2026.
• Passive index trackers will buy around 11.4% of the offering at the time of settlement of the placement shares with the balance being bought in January 2026.

• On 22-February-2023 a Reuters suggested JPH (6178) had “started talks” to sell a big stake in JP Bank (7182). Five days later they announced a complicated deal discussed here.
• Today, an article suggests Japan Post Holdings (6178 JP) will sell ¥600bn in Japan Post Bank (7182 JP) to get ownership below 50% (as with JPI). A buyback might appear.
• JPB has issued a “there’s smoke” release. Like last time. Expected unwind of known overhang means minimal surprise here. The question is whether they could surprise (big buyback? capital plan?).

• Reportedly, China International Capital Corporation (3908 HK) and China Galaxy Securities (6881 HK), two of China’s leading state-backed brokerages, intend to merge via a share swap, forming China’s third-largest broker.
• This report/rumour arrives shortly after the successful merger of Guotai Junan Securities (2611 HK) (GJS) and Haitong Securities (6837 HK). 
• As with GJS/Haitong, expect a Merger by Absorption structure, and that Galaxy (or CICC?) issue new A and H shares to the target. I’d be picking up CICC shares here. 

• Reuters reports that Japan Post Holdings (6178 JP) (JPH) is planning to sell shares in Japan Post Bank (7182 JP) (JPB), which could total some JPY600 billion (US$4.0 billion).
• The potential offering would align with JPH’s stated goal of reducing its equity interest in JPB to 50% or less by FY 2025.
• The potential offering is relatively smaller than JPB’s 2023 offering. Compared to its peers, JPB’s valuation remains undemanding. 

• The odds of the cornerstone system getting the green light are significantly higher than they were two years ago.
• With bills typically taking a year to kick in, we need to stay on this—if all goes smoothly, cornerstone investors could hit Korean IPOs as early as next year.
• In the early stages, cornerstone allocations will be key to shaping our IPO trading playbook. Staying ahead of these shifts is crucial.

• The headline Indian mid cap indices are still expensive, despite a sharp decline since late September. However, when adjusted for growth, many fundamentally attractive mid-caps are cheap.
• We screen mid-caps with PEG<1.3x, consensus Buy recommendations and increasing consensus EPS estimates over the past six months. We choose well-covered stocks so that the consensus estimates are meaningful.
• Our basket of 20 contains six financial stocks, five materials, four industrials and three consumer discretionaries. Many pertain to the themes of renewable energy, data centers, healthcare, tourism and infrastructure.

• Costar Group (CSGP US) to acquire Matterport (MTTR US) for $1.6 billion, boosting its digital real estate capabilities.
• The regulatory hurdles and recent optimism on expected completion of the acquisition.
• The acquisition’s impact on major U.S. indices, expected mostly on an intra-quarter basis.

• After online trading player SelfWealth (SWF AU) entered into a SID with Bell Financial (BFG AU) on the 25th November, Singaporean-based wealth manager Svava gate-crashed the party earlier this month. 
• Svava tabled a non-binding A$0.28/share Offer, in cash, by way of a Scheme, versus Bell’s A$0.25/share. Svava also built an effective blocking stake – 18.83% of shares out.
• After Bell said it won’t make a counterproposal yesterday, SelfWealth has now entered into Scheme with Svava. Expect implementation in May. 

• Formation of a two-party coalition is seen as good news, as it eliminates the need to bring in additional parties with conflicting views
• Despite differences in specific tools, major parties align on broad objectives such as reducing energy prices and supporting key sectors
• The sense of responsibility to keep far-right parties out of power may drive centrist parties to work together effectively, potentially boosting business sentiment

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• Digital Realty is a global data center player across all major markets.  The DC demand will be back by secular trends including AI, Cloud and enterprise digitalization
• DLR’s focus on pricing, development pipeline and balance sheet enables it to achieve long-term sustainable growth, delivering a mid single digit FFO growth
• We also think DLR has maintained a strong balance sheet.  DLR is still in the process of de-leveraging with healthy credit metrics