Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Vertex Technology Acquisition Corporation / Equity Capital Markets

Vertex Technology Acquisition Corporation

<ul>
<li>Vertex Technology Acquisition Corporation Ltd (VTAC) aims to raise around US$126m via Singapore’s first SPAC listing.</li>
<li>VTAC is sponsored by Vertex Venture Holdings (VVH), a wholly owned subsidiary of Temasek. </li>
<li>In this tear sheet, we will talk about the deal background and structure.</li>
</ul>


Vertex Technology Acquisition Corporation Ltd (VTAC) aims to raise around US$126m via Singapore’s first SPAC listing.
VTAC is sponsored by Vertex Venture Holdings (VVH), a wholly owned subsidiary of Temasek. 
In this tear sheet, we will talk about the deal background and structure.


Vertex Technology Acquisition Corporation Ltd Tear Sheet - Singapore’s First SPAC Listing

China and US Equity Analyst

Roger Xie

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a> is set to launch MSCI China A50 Connect Index future on Oct 18, 2021. The debut marks the significant milestone for HKEx to diversify its earnings stream away from a heavy reliance on cash equity market volumes. With the rising volume for China A-share through Stock Connect Northbound, we believe the demand for China A50 Connect future is huge. Due to regulatory restriction in the past, there is lack of China A-share related derivative products in Hong Kong market. The to-be-launched MSCI China A50 Connect future will likely fill the gap. In longer term, this product launch is a game changer for <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a> derivative business. We estimate the derivative business contribution to HKEx revenue will likely grow to 25% from current 16%.</li>
<li>We analyzed the trading volume of future contracts for <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a> on HKEx and <a href="https://www.smartkarma.com/entities/ftse-china-a50-index" target="_blank" data-smartkarma-citation="entities:22905:1" rel="noopener">FTSE China A50 Index (XIN9I INDEX)</a> on <a href="https://www.smartkarma.com/entities/singapore-exchange-ltd" target="_blank" data-smartkarma-citation="entities:1047:1" rel="noopener">SGX (SGX SP). </a>We estimate that ADV (Average Daily Volume) of MSCI China A50 Connect contract will likely be ramped up at 1.5-2.0x the volume of FTSE A50 at its launch. In a long-run, we believe ADV of MSCI China A50 could be more than 5x of ADV of FTSE A50 as offshore investors' exposure on China A-share cash equity grows. This will reshape HKEx with more balanced revenue stream from both cash equity and derivative. </li>
<li>
<a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a> August ADT (Average Daily Turnover) has been resilient, delivering 18% year-over-year growth in the month. The ADT for the first eight months of 2021 was up 46 per cent from the same period last year. Although China market is clouded by recent Beijing's crackdown of big tech, we still think  HKEx will play a key role on offshore China listings. We forecast <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a> Securities ADT of HK$240bn in FY 21 (excluding Stock Connect Northbound volume)  and remain bullish on <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a>  and have TP HKD 550. </li>
</ul>



HKEX (388 HK) is set to launch MSCI China A50 Connect Index future on Oct 18, 2021. The debut marks the significant milestone for HKEx to diversify its earnings stream away from a heavy reliance on cash equity market volumes. With the rising volume for China A-share through Stock Connect Northbound, we believe the demand for China A50 Connect future is huge. Due to regulatory restriction in the past, there is lack of China A-share related derivative products in Hong Kong market. The to-be-launched MSCI China A50 Connect future will likely fill the gap. In longer term, this product launch is a game changer for HKEX (388 HK) derivative business. We estimate the derivative business contribution to HKEx revenue will likely grow to 25% from current 16%.
We analyzed the trading volume of future contracts for Hang Seng China Enterprises Index (HSCEI INDEX) on HKEx and FTSE China A50 Index (XIN9I INDEX) on SGX (SGX SP). We estimate that ADV (Average Daily Volume) of MSCI China A50 Connect contract will likely be ramped up at 1.5-2.0x the volume of FTSE A50 at its launch. In a long-run, we believe ADV of MSCI China A50 could be more than 5x of ADV of FTSE A50 as offshore investors' exposure on China A-share cash equity grows. This will reshape HKEx with more balanced revenue stream from both cash equity and derivative. 

HKEX (388 HK) August ADT (Average Daily Turnover) has been resilient, delivering 18% year-over-year growth in the month. The ADT for the first eight months of 2021 was up 46 per cent from the same period last year. Although China market is clouded by recent Beijing's crackdown of big tech, we still think  HKEx will play a key role on offshore China listings. We forecast HKEX (388 HK) Securities ADT of HK$240bn in FY 21 (excluding Stock Connect Northbound volume)  and remain bullish on HKEX (388 HK)  and have TP HKD 550. 


HKEx (388.HK): China A50 Index Future to Debut in 2 Weeks

Alpha-Centric ESG Research

Kyle Rudden

Recent mainstreaming of sustainability and ESG-minded investing has spawned a superabundance of "green" investment products. Today's carte of mainstay ESG products – namely exchange-traded funds (ETFs) and mutual funds – is so saturated that most new products are just more of the same; perhaps with a minor new spin on an old ESG theme (low carbon, no carbon, efficient carbon).... solutions without problems in need of solving.Once in a while, something special comes along. Not just a new paint job on an old vehicle but an entirely new ESG asset class and product category. New tools for the ESG investor's toolbox. Such as <a href="https://www.smartkarma.com/entities/singapore-exchange-ltd" target="_blank" data-smartkarma-citation="entities:1047:1" rel="noopener">Singapore Exchange (SGX SP)</a> ESG futures, which enable ESG-tilted exposure in REITs via <a href="https://www.smartkarma.com/entities/sgx-nikkei-esg-reit-index-futures" target="_blank" data-smartkarma-citation="entities:33480:1" rel="noopener">SGX Nikkei ESG-REIT Index Futures (JRTA INDEX)</a>, and other ESG-related hedging and arbitrage.... solutions to real problems for "green" finance.One in a blue moon, something extraordinarily special comes along. Not just a new ESG asset class and product category, but a potential game-changer that disrupts and transforms sustainable/ESG investing and finance. In many ways, for many stakeholders. A remedy for the most universal and agonizing pain points for sustainable finance, and possibly the key to global sustainability.Nothing extraordinarily special has come along yet.Still too much uncertainty for grandiose adjectives.But last week's announcement from the New York Stock Exchange (NYSE) and Intrinsic Exchange Group (IEG) – regarding their new asset class called "Natural Asset Companies" (NACs) – portends that kind of blue-moon game-changer. NACs are still under development, with existential details still undetermined. But the potential impact of NACs is epic, for a rare trifecta of reasons:<ol>
<li>
Product/Market Fit: NACs make a lot of sense, and from what we know so far could be among the best (if not the best) product/market fits ever for new ESG asset class/product launches.</li>
<li>
Addressable Market: The potential market for NACs is huge due to the magnitude of natural capital, and broad relevance of NACs. It is a market potential measured in trillions of dollars.</li>
<li>
Perfect Partnership: NYSE/IEG is the partnership most likely to succeed at something such as  this; complementary skills sets, and with a well-developed product right out of the gate.</li>
</ol>

Recent mainstreaming of sustainability and ESG-minded investing has spawned a superabundance of "green" investment products. Today's carte of mainstay ESG products – namely exchange-traded funds (ETFs) and mutual funds – is so saturated that most new products are just more of the same; perhaps with a minor new spin on an old ESG theme (low carbon, no carbon, efficient carbon).... solutions without problems in need of solving.Once in a while, something special comes along. Not just a new paint job on an old vehicle but an entirely new ESG asset class and product category. New tools for the ESG investor's toolbox. Such as Singapore Exchange (SGX SP) ESG futures, which enable ESG-tilted exposure in REITs via SGX Nikkei ESG-REIT Index Futures (JRTA INDEX), and other ESG-related hedging and arbitrage.... solutions to real problems for "green" finance.One in a blue moon, something extraordinarily special comes along. Not just a new ESG asset class and product category, but a potential game-changer that disrupts and transforms sustainable/ESG investing and finance. In many ways, for many stakeholders. A remedy for the most universal and agonizing pain points for sustainable finance, and possibly the key to global sustainability.Nothing extraordinarily special has come along yet.Still too much uncertainty for grandiose adjectives.But last week's announcement from the New York Stock Exchange (NYSE) and Intrinsic Exchange Group (IEG) – regarding their new asset class called "Natural Asset Companies" (NACs) – portends that kind of blue-moon game-changer. NACs are still under development, with existential details still undetermined. But the potential impact of NACs is epic, for a rare trifecta of reasons:

Product/Market Fit: NACs make a lot of sense, and from what we know so far could be among the best (if not the best) product/market fits ever for new ESG asset class/product launches.

Addressable Market: The potential market for NACs is huge due to the magnitude of natural capital, and broad relevance of NACs. It is a market potential measured in trillions of dollars.

Perfect Partnership: NYSE/IEG is the partnership most likely to succeed at something such as  this; complementary skills sets, and with a well-developed product right out of the gate.


Natural Asset Companies (NACs): New ESG Asset Class Aims to Transform Sustainable Capital Markets

Energy Transition | AI | Shifting World Order, Mint Finance

Srinidhi Raghavendra

Energy Transition | AI | Shifting World Order

Deep Fundamental Analysis

Mint Finance

Mint Finance's investment research blends deep fundamental analysis with technical & quant insights. Investment strategies straddle across multiple asset classes with risk management embedded into every trade to deliver an outsized reward-to-risk ratio.

Mint Finance's research is centered around three key themes. First, energy transition and climate change. Second, artificial intelligence. Third, shifting world order with its impact across politics and monetary economics.

Commodities

<ul>
<li>SGX Iron Ore prices exhibit seasonality. For select six months being long Iron Ore combined with short positions during other months deliver positive P&amp;L based on back tests. </li>
<li>In line with prices, realised volatility exhibits seasonality too. Options strategies can exploit this to deliver superior alpha &amp; higher sharpe ratio.</li>
<li>Averages confound extreme variances. Monthly iron ore futures price returns are less volatile during the months of December, February, June, October, &amp; March based on range.</li>
</ul>


SGX Iron Ore prices exhibit seasonality. For select six months being long Iron Ore combined with short positions during other months deliver positive P&amp;L based on back tests. 
In line with prices, realised volatility exhibits seasonality too. Options strategies can exploit this to deliver superior alpha &amp; higher sharpe ratio.
Averages confound extreme variances. Monthly iron ore futures price returns are less volatile during the months of December, February, June, October, &amp; March based on range.


Harvesting Seasonality in Iron Ore Prices Induced by Weather, Inventory Restocking, and Holidays

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

<ul>
<li>The top line of <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a> is down 7% YoY, the next major income line is down 3% YoY while operating costs are up 8% YoY, in 1Q24.</li>
<li>Average daily turnover is down 22% YoY, and to us this is the main story, a marginalization of the Hong Kong Exchange. </li>
<li>Geopolitical risks remain high, the historical positioning of Hong Kong is less relevant today, with worsening economic concerns in China, in close proximity. </li>
</ul>


The top line of HKEX (388 HK) is down 7% YoY, the next major income line is down 3% YoY while operating costs are up 8% YoY, in 1Q24.
Average daily turnover is down 22% YoY, and to us this is the main story, a marginalization of the Hong Kong Exchange. 
Geopolitical risks remain high, the historical positioning of Hong Kong is less relevant today, with worsening economic concerns in China, in close proximity. 


HKEX - Revenue Down, Investment Income Down, Operating Costs Up, Will It All Reverse?

Singapore

Singapore Exchange Limited owns and operates Singapore's Securities and derivatives exchange and their related clearing houses.  The Company also provides ancillary securities processing and information technology services to participants in the financial sector.

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SGX (SGX SP)

Vertex Technology Acquisition Corporation Ltd Tear Sheet - Singapore’s First SPAC Listing

Vertex Technology Acquisition Corporation Ltd (VTAC) aims to raise around US$126m via Singapore’s first SPAC listing. VTAC is backed by Vertex,...

Sumeet Singh

HKEx (388.HK): China A50 Index Future to Debut in 2 Weeks

HKEX (388 HK) is set to launch MSCI China A50 future on Oct 18, 2021. The debut marks the significant milestone for HKEx. We remain bullish on HKEX...

Roger Xie

Natural Asset Companies (NACs): New ESG Asset Class Aims to Transform Sustainable Capital Markets

NYSE and Intrinsic Exchange Group announced a new asset class called "Natural Asset Companies" (NACs). Mission-critical hurdles remain, but NACs...

Kyle Rudden

Harvesting Seasonality in Iron Ore Prices Induced by Weather, Inventory Restocking, and Holidays

Iron ore futures prices exhibit seasonality. Harnessing seasonality using SGX Iron Ore Futures delivers a success rate of 63% (positive P&L in 57...

Mint Finance

HKEX - Revenue Down, Investment Income Down, Operating Costs Up, Will It All Reverse?

The direction of most line items are poor and this is not likely to reverse. The top line decline is especially severe as is average daily...

Daniel Tabbush

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