In today’s briefing:
- Asset Allocation Watch: Are Equities Cheap or Expensive Ahead of the Reporting Season?
- Changes in Portfolio Weights: Lowering the Weight of Equities
- IPO Price Band Widening, Cornerstone Investors Requirement, & Top 8 IPOs in Korea in 2H 2023
- Soft commodities dominate 2023 – US orange crop falls to 86-year low
- The Week That Was in ASEAN@Smartkarma – ASSA’s Mobility Edge, Alfamart’s Convenience, and ITMG.
Asset Allocation Watch: Are Equities Cheap or Expensive Ahead of the Reporting Season?
- Equities are NOT expensive in a historical context. They are relatively close to fair value
- US equity markets look slightly expensive relative to European or Asian markets.
- If we get a recession (our base case for H2), we find no signs that it is already priced in.
Changes in Portfolio Weights: Lowering the Weight of Equities
- US retail sales fell 1.0% in March, the fourth decline in the last five months. We expect the downturn in the housing market to cause another dip in consumer sentiment.
- Our earnings-per-share vs. P/E ratio analysis provides little upside. It will demand higher valuations and/or positive earnings growth to allow for meaningful upside.
- Sentiment has been the key market driver in recent weeks. But with the VIX Index down to 17 in a weakening macro environment, the impulse may be fading.
IPO Price Band Widening, Cornerstone Investors Requirement, & Top 8 IPOs in Korea in 2H 2023
- We provide details of the widening of the IPO price band in Korea, cornerstone investor requirement, and the potential top 8 IPOs in Korea in 2H 2023.
- The FSC is also in the process of allowing cornerstone investor requirement for Korean IPOs.
- We also provide a list of top 8 potential IPOs in Korea (with market caps of at least 500 billion won) that could get completed in 2H 2023.
Soft commodities dominate 2023 – US orange crop falls to 86-year low
- USDA on Tuesday pegged the 2022-2023 U.S. orange crop at 62.25 million boxes (2.57 million tonnes), an 86-year low and down 23% on the year.
- That is less than 20% of U.S. output in the record 1997-1998 season.
- Florida, which has previously accounted for more than 80% of the annual U.S. orange crop, is seen producing an 87-year low of 16.1 million boxes, down 61% on the year.
The Week That Was in ASEAN@Smartkarma – ASSA’s Mobility Edge, Alfamart’s Convenience, and ITMG.
- The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across South East Asia
- The past week saw insights on Adi Sarana Armada (ASSA IJ), Sumber Alfaria Trijaya (AMRT IJ), Jardine Strategic Holdings (JS SP), Lian Beng, and Indo Tambangraya Megah (ITMG IJ).
- There were also bottom-up insights on Aneka Tambang (ANTM IJ), Mayora Indah (MYOR IJ), and Alam Sutera Realty (ASRI IJ).
💡 Before it’s here, it’s on Smartkarma
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