In today’s briefing:
- Mindtree & L&T Infotech’s US$18bn Merger: Details and Index Implications
- Tokyo Electron (8035) | Fundamentals Don’t Matter…for Now
- Crypto Weekly – TerraUSD (UST)’s Depeg Leading to Crypto Capitulation?
- Nasdaq 100 Bear Picture Refreshed
Mindtree & L&T Infotech’s US$18bn Merger: Details and Index Implications
- The Larsen & Toubro Infotech (LTI IN) and Mindtree Ltd (MTCL IN) merger will create a company with revenue of US$3.5bn and a market cap of US$18bn.
- The merger ratio is 73 shares of Larsen & Toubro Infotech for 100 shares of Mindtree. The merger is expected to complete in 9-12 months.
- There are likely to be some inflows from MSCI and FTSE trackers but the big kicker will be inclusion in the NIFTY Index – but a (smallish) rally is needed.
Tokyo Electron (8035) | Fundamentals Don’t Matter…for Now
- Tokyo Electron reports FY3/22 results on 12 May. We expect the company to meet guidance and analyst expectations
- But the outlook may disappoint. Management may guide FY3/23 more conservatively than analysts who are looking for operating profit to grow 20% to ¥700 bn
- Despite favorable industry conditions and strong outlook for WFE, we think that the stock could continue to de-rate
Crypto Weekly – TerraUSD (UST)’s Depeg Leading to Crypto Capitulation?
- Crypto complex down double digits over the past week as yields climb beyond 3% and major asset classes all trade lower with heightened correlation. NFTs also down significantly.
- TerraUSD (UST CURNCY) has depegged from USD1 and is again potentially at risk for the dreaded death spiral coupled with Terra (LUNA CURNCY)
- As UST and LUNA have a combined market cap of around $40 billion, it could present systematic risk implications for crypto
Nasdaq 100 Bear Picture Refreshed
- The Nasdaq 100 is approaching some supports around 12,200 which may hold on first attempt
- However in the bigger picture they do not look particularly strong
- Instead there is a danger that overall we continue to trend down towards the 11k area
Before it’s here, it’s on Smartkarma
