In today’s briefing:
- Itochu Keeps Buying Fuji Oil, Takeover Offer Could Be Possible With Shares Near The Cyclical Bottom
- Skymark IPO – Valuation
- Again, It Is the BOJ’s ETF Issue that Makes Us Think
Itochu Keeps Buying Fuji Oil, Takeover Offer Could Be Possible With Shares Near The Cyclical Bottom
- Itochu Corp (8001 JP) has restarted accumulating Fuji Oil Holdings (2607 JP) shares, with an acquisition of 3.5m shares during the last-quarter to take its ownership percentage in Fuji-Oil to 44%.
- With both earnings and valuations at a cyclical bottom, Itochu could be encouraged to accumulate more Fuji Oil shares in the short term, resulting in Fuji Oil outperforming its peers.
- We think even a takeover offer could be possible while the share price is hovering near the cyclical bottom.
Skymark IPO – Valuation
- Skymark is a little difficult to value given wide dispersions in peer multiples and earnings recovery trajectories.
- However, on balance we believe the issue looks to be on the cheap side.
- In addition, there are several quirks to the balance sheet, not all of which are negative.
Again, It Is the BOJ’s ETF Issue that Makes Us Think
- Although the stock split doesn’t raise the intrinsic value of the stock, the stock price is likely to rise on the speculation that future purchases into the NISA are expected.
- As cross-shareholdings decline, the companies are actively engaging in IR activities with individual investors to secure shareholders who share the company’s position against foreign shareholders who are increasing their presence.
- Some believe that NISA will be used as receptacle for the disposal of BOJ’s ETF holdings, but companies may hope that the silent shareholder hold ETFs as long as possible.
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