In today’s briefing:
- Ohayo Japan | US Launches Airstrikes in Iran
- Japan Morning Connection: US Directly Attacks Iran and Requests Japan to Spend 5% of GDP on Defense
- HK Strategy: Trend of Narrowing H-A IPO Discount
- Thematic Report: Indian Paper Sector – At the Bottom, Is It the Right Time?
Ohayo Japan | US Launches Airstrikes in Iran
- US stocks ended mixed Friday as geopolitical tensions and rate cut speculation shaped sentiment.
- The US launched airstrikes on Iran’s Fordow, Natanz, and Isfahan nuclear sites, marking a direct intervention in Israel’s campaign to dismantle Tehran’s nuclear program
- Deloitte Tohmatsu reported a surge in shareholder activism in Japan, with 43 shareholder proposals for director elections and dismissals at 2025
Japan Morning Connection: US Directly Attacks Iran and Requests Japan to Spend 5% of GDP on Defense
- Masayoshi Son is floating a $1trn AI factory in Arizona in exchange for tax breaks.
- NTT Data out, Rohm in. Downside for Ibiden, but also small buying for Fasty, Terumo, Konami and others.
- Renesas announces details of its Wolfspeed restructuring deal which includes kitchen sinking the losses this year.
HK Strategy: Trend of Narrowing H-A IPO Discount
- The 6 H-share IPOs of the listed A-share companies YTD have seen their H-A discount narrowing from an average of 31% during IPO to 15.5% currently.
- Larger-Cap ones tend to be priced and traded at a smaller discount to their A-shares. However, they are not necessarily those seeing the most significant narrowing in discount.
- Foshan Haitian Flavouring & Food Company (3288 HK) may further narrow its discount, while Zhejiang Sanhua Intelligent Controls (2050 HK) also sees upside from such a perspective.
Thematic Report: Indian Paper Sector – At the Bottom, Is It the Right Time?
- Paper imports have doubled in four years, with FY-25 Chinese inflows up 33 %; domestic mills’ Q4 profits collapsed 50-70 %.
- Predatory pricing is idling one-third of India’s capacity, derailing INR 30,000Crs expansion plans and jeopardising jobs in a sector crucial for plastic-free packaging demand.
- Near-Term recovery hinges less on demand and more on policy; anti-dumping duties could swiftly restore utilisation and margins, making FY-26 a pivotal re-rating year.
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