Daily Brief Financials: Korea Stock Exchange KOSPI 200, Swire Pacific (A), Bank Of Baroda, Tata Capital Limited, Kasumigaseki Hotel REIT, Global Indemnity Group LLC, S&U PLC, Consumer Portfolio Services and more

• Covered call ETFs ramped up KOSPI 200 weekly call selling, pushing premiums unusually low despite modest overall volume—likely a key driver behind the premium compression.
• KOSPI 100 outperformed KOSPI 200 small-mid caps by 3.7%p last month, probably boosted by call-selling ETFs’ delta-hedge buying concentrated in large caps.
• Watch for hedge buy flows ramping up before big events. Timing short-term longs in large caps and shorts in smaller KOSPI 200 names around these windows can yield solid alpha.

• As Swire Pacific (A) (19 HK) plumbs new 12-month lows for its NAV discount and implied stub, Swire’s B shares have significantly outperformed the As over the past month. 
• Preceding my comments on Pac, Swire Properties (1972 HK) & Cathay Pacific Airways (293 HK), are the current setup/unwind tables for Asia-Pacific Holdcos. 
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• We take profits on our Canara Bank buy recommendation, due to adverse credit quality trends, and we stick with our two high conviction buy names UBI and Bank of Baroda
• UBI ranks top in our proprietary scorecard, replacing Canara Bank; UBI has high earnings and dividend yields; it ranks highly on NPL coverage and it has a well-controlled write-off ratio
• Baroda remains our core value pick; it has attractive valuations and potential to expand returns which we expect to emerge over the medium term, especially given its control of write-offs

• Tata Capital Limited (TATACAP IN) is the third-largest non-banking financial company (NBFC) in India. It is seeking to raise US$2.0 billion. 
• On 8 May 2025, Tata Capital merged with Tata Motors Finance Solutions Limited (TMFL) through the issue of 183.9 million shares.
• The fundamentals are mixed. Positives include large size, high growth rates, low opex ratio and good asset quality. Negatives include below peer average NIM, interest spread and ROE. 

• Kasumigaseki Hotel REIT (401A JP)  raised US$193m in its upcoming Japan IPO.
• Kasumigaseki Hotel REIT Investment is a REIT with hotel assets. It is an investment corporation sponsored by affiliated developer, Kasumigaseki Capital.
• In this note, we examine the IPO dynamics, and look at the firm’s valuation

• Global Indemnity Group, LLC, provides specialty and niche insurance products nationwide.
• GBLI focuses on small market property and casualty business.
• The company has made a concerted effort to reduce its property exposure.

S&U has issued a Q226 trading update confirming the growth trajectory of the business and providing support for H2 profit growth. The recent Supreme Court (SC) decision has given legal clarity to the motor finance business, Advantage, which is now in a strong recovery phase. Aspen, the property lender, continues to grow robustly, generating advances over the quarter that were up 15%. We view S&U’s Q2 exit trajectory positively and believe the company will meet our FY26 forecasts. The SC’s judgement should put to rest any existential worries about Advantage, allowing trend growth to resume and further supporting numbers.

• Key 2Q25 takeaways include: 1) loan origination volumes remain strong, with favorable lead indicators around steady demand trends, increasing throughput from the company’s pass-through partnership with Ally Financial, improving funding rates, and as newer salespeople continue to season 2) CPSS’s ABS volumes have remained consistently strong ($400+ million for each of the last five securitizations), while related cost of funds have continued to trend lower – a powerful combination from an earnings power perspective 3) we look for NCOs to continue to trend lower reflecting responsible underwriting, portfolio remixing, and improving recovery rates and 4) while we prefer to err on the side of caution, we note our 2026 EPS forecast jumps from $1.85 to $3.17 (70%+ accretion) if we layer in a 4.5% cost of funds (consistent with the company’s long-term average) for next year.
• Granted, lower interest expenses will take time to flow through the P&L, though we think our back-of-the-envelope math reinforces the considerable leverage in the model, as interest expense normalizes.

• Tata Capital Limited (TATACAP IN) is looking to raise upto US$2bn in its India IPO, which will be run by Kotak, Citi, JPM, Axis, ICICI, HSBC, IIFL, BNP,SBI and HDFC.
• Tata Capital Limited (TCL) is the flagship financial services company of the Tata group and a subsidiary of Tata Sons Private Limited.
• It is categorized as an Upper Layer NBFC by RBI and caters to salaried and self-employed individuals, entrepreneurs, small businesses, small and medium enterprises and corporates.