Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>Commodities (ex. precious metals) and global yields are on the rise as the US dollar (DXY) deteriorates. Additionally, EM equities (EEM-US) display a bullish RS reversal relative to MSCI ACWI. </li>
<li>These are all important risk-on signals for global equities that continue to support our neutral yet constructive outlook. We expect more consolidation and mixed markets ahead.</li>
<li>Two Sectors that stand to benefit most from rising rates include Energy and Financials. We recommend adding exposure to these Sectors as we see a shift in favor of value.</li>
</ul>


Commodities (ex. precious metals) and global yields are on the rise as the US dollar (DXY) deteriorates. Additionally, EM equities (EEM-US) display a bullish RS reversal relative to MSCI ACWI. 
These are all important risk-on signals for global equities that continue to support our neutral yet constructive outlook. We expect more consolidation and mixed markets ahead.
Two Sectors that stand to benefit most from rising rates include Energy and Financials. We recommend adding exposure to these Sectors as we see a shift in favor of value.


Value Sectors Take The Lead On Rising Global Yields; Buying Energy and Financials

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Earlier this week, <a href="https://www.smartkarma.com/entities/royal-dutch-shell-plc" target="_blank" data-smartkarma-citation="entities:22108:1" rel="noopener">Royal Dutch Shell (RDSA LN)</a> announced a plan for 'Unification' of the A and B lines, to be put to shareholder vote in 3 weeks. </li>
<li>The plan entails moving 10 execs to London, changing corporate and tax jurisdiction to the UK. </li>
<li>The question investors should be asking themselves is... Is There A Trade Here?</li>
</ul>


Earlier this week, Royal Dutch Shell (RDSA LN) announced a plan for 'Unification' of the A and B lines, to be put to shareholder vote in 3 weeks. 
The plan entails moving 10 execs to London, changing corporate and tax jurisdiction to the UK. 
The question investors should be asking themselves is... Is There A Trade Here?


Thinking About the Royal Dutch Shell "Unification"

<p>Our biggest concerns have stemmed from a handful of large-cap China internet names, which have held back the MSCI EM and Hang Seng indexes. We are also getting a breakout above $93.50-93.75 on the US dollar, a concerning risk-off signal. Still, our list of concerns remains short, and our outlook remains neutral yet constructive overall.</p>

Our biggest concerns have stemmed from a handful of large-cap China internet names, which have held back the MSCI EM and Hang Seng indexes. We are also getting a breakout above $93.50-93.75 on the US dollar, a concerning risk-off signal. Still, our list of concerns remains short, and our outlook remains neutral yet constructive overall.

Global Cyclical Value Sectors Improving -- Buying Financials and Energy Names: ING Groep, Many More

David Blennerhassett

<div>
<p>Despite a momentary memory lapse from <a href="https://www.smartkarma.com/entities/oil-search-ltd" target="_blank" data-smartkarma-citation="entities:773:1" rel="noopener">Oil Search Ltd (OSH AU)</a>, <a href="https://www.smartkarma.com/entities/santos-ltd" target="_blank" data-smartkarma-citation="entities:711:1" rel="noopener">Santos Ltd (STO AU)</a> <a target="_blank">confirmed</a> on the 20 July it had submitted a confidential, non-binding, indicative all-scrip merger proposal to Oil Search's board on the 25 June.</p>
</div>
<div>
<p>Santos proposed Oil Search shareholders receive 0.589 new Santos shares for each Oil Search share held, resulting in Oil Search shareholders holding 37% of the merged group and Santos shareholders 63%. The implied transaction price, to be implemented via a Scheme, was A$4.25 per Oil Search share - based on Santos’ closing price on 24 June 2021 - or a 12.3% premium to Oil Search's closing price on the same day.</p>
</div>
<div>
<p>Oil Search considered the terms were not fair but <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02397158-2A1310798?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">agreed</a> there was strategic logic combining with Santos. </p>
<p>In <em><a href="https://skr.ma/epYxh" target="_blank" rel="noopener">Santos/Oil Search: Getting Facts Straight</a></em>, I recommended buying Oil Search, with a view towards an improved ratio upwards of ~0.66x, or ~25% premium to last close using both share prices as 24 June. </p>
<p>This morning Santos <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02402372-2A1313090?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">bumped</a> the consideration by 6.5% to 0.6275 new Santos shares for every Oil Search share.  This would give Oil Search's shareholders 38.5% of the merger group. The implied transaction price of A$4.52/share  - if using Santos price on the 24 June - is a 19.7% premium to the undisturbed price. </p>
<p>The Oil Search board recommends the Offer in the absence of superior proposal. Due diligence has been afforded.</p>
<p>More below the fold.</p>
</div>
<div>
<p></p>
</div>


Despite a momentary memory lapse from Oil Search Ltd (OSH AU), Santos Ltd (STO AU) confirmed on the 20 July it had submitted a confidential, non-binding, indicative all-scrip merger proposal to Oil Search's board on the 25 June.


Santos proposed Oil Search shareholders receive 0.589 new Santos shares for each Oil Search share held, resulting in Oil Search shareholders holding 37% of the merged group and Santos shareholders 63%. The implied transaction price, to be implemented via a Scheme, was A$4.25 per Oil Search share - based on Santos’ closing price on 24 June 2021 - or a 12.3% premium to Oil Search's closing price on the same day.


Oil Search considered the terms were not fair but agreed there was strategic logic combining with Santos. 
In Santos/Oil Search: Getting Facts Straight, I recommended buying Oil Search, with a view towards an improved ratio upwards of ~0.66x, or ~25% premium to last close using both share prices as 24 June. 
This morning Santos bumped the consideration by 6.5% to 0.6275 new Santos shares for every Oil Search share.  This would give Oil Search's shareholders 38.5% of the merger group. The implied transaction price of A$4.52/share  - if using Santos price on the 24 June - is a 19.7% premium to the undisturbed price. 
The Oil Search board recommends the Offer in the absence of superior proposal. Due diligence has been afforded.
More below the fold.





<p>When questioned by analysts at an investor briefing on the 19 July as to any takeover offers, <a href="https://www.smartkarma.com/entities/oil-search-ltd" target="_blank" data-smartkarma-citation="entities:773:1" rel="noopener">Oil Search Ltd (OSH AU)</a>'s chairman Rick Lee denied it had received a change-of control approach.</p>
<p>That wasn't entirely incorrect. It wasn't even close. </p>
<p>The day after that briefing, <a href="https://www.smartkarma.com/entities/santos-ltd" target="_blank" data-smartkarma-citation="entities:711:1" rel="noopener">Santos Ltd (STO AU)</a> <a href="file:///D:/Quiddity/Oil%20search/2924-02396991_NPS-2A1310715.pdf" target="_blank" rel="noopener">confirmed</a> that on 25 June 2021 it had submitted a confidential, non-binding, indicative all-scrip merger proposal to Oil Search's board.</p>
<p>The proposal, to be implemented through a Scheme, would result in Oil Search shareholders receiving 0.589 new Santos shares for each Oil Search share held. Upon completion, Oil Search shareholders would own 37% of the merged group and Santos shareholders 63%.</p>
<p>The implied transaction price was A$4.25 per Oil Search share, based on Santos’ closing price on 24 June 2021, or a 12.3% premium to Oil Search's closing price on the same day.</p>
<p>Oil Search <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02397158-2A1310798?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">agreed</a> there was strategic logic combining with Santos, but that the terms of the combo were "demonstrably not" fair. </p>
<p>In addition, Oil Search's MD Kerian Wulff <a href="file:///D:/Quiddity/Oil%20search/2924-02396558-2A1310512.pdf" target="_blank" rel="noopener">resigned</a> for health reasons and that:</p>
<blockquote>
<p>following the receipt of recent concerns and complaints about his (Wulff's) behaviour .... the Board considered that Dr Wulff had behaved in a manner inconsistent with the standards expected by the Board in relation to his management style.</p>
</blockquote>
<p>Lots more below the fold.</p>

When questioned by analysts at an investor briefing on the 19 July as to any takeover offers, Oil Search Ltd (OSH AU)'s chairman Rick Lee denied it had received a change-of control approach.
That wasn't entirely incorrect. It wasn't even close. 
The day after that briefing, Santos Ltd (STO AU) confirmed that on 25 June 2021 it had submitted a confidential, non-binding, indicative all-scrip merger proposal to Oil Search's board.
The proposal, to be implemented through a Scheme, would result in Oil Search shareholders receiving 0.589 new Santos shares for each Oil Search share held. Upon completion, Oil Search shareholders would own 37% of the merged group and Santos shareholders 63%.
The implied transaction price was A$4.25 per Oil Search share, based on Santos’ closing price on 24 June 2021, or a 12.3% premium to Oil Search's closing price on the same day.
Oil Search agreed there was strategic logic combining with Santos, but that the terms of the combo were "demonstrably not" fair. 
In addition, Oil Search's MD Kerian Wulff resigned for health reasons and that:

following the receipt of recent concerns and complaints about his (Wulff's) behaviour .... the Board considered that Dr Wulff had behaved in a manner inconsistent with the standards expected by the Board in relation to his management style.

Lots more below the fold.

Santos/Oil Search: Getting Facts Straight

France

TOTAL S.A. explores for, produces, refines, transports, and markets oil and natural gas. The Company also operates a chemical division which produces polypropylene, polyethylene, polystyrene, rubber, paint, ink, adhesives, and resins. TOTAL operates gasoline filling stations in Europe, the United States, and Africa.

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TotalEnergies (TTE FP)

Value Sectors Take The Lead On Rising Global Yields; Buying Energy and Financials

Two Sectors that stand to benefit most from rising rates include Energy and Financials. We recommend adding exposure to these Sectors as we see a...

Vermilion Research

Thinking About the Royal Dutch Shell "Unification"

Royal Dutch Shell has announced a planned "Unification" to be decided by shareholder vote on 10 December. The goal is to unify the A and B lines to...

Travis Lundy

Global Cyclical Value Sectors Improving -- Buying Financials and Energy Names: ING Groep, Many More

Continued rising rates is likely to support value Sectors moving forward (especially Financials and Energy), and it also typically indicates...

Vermilion Research

Santos and Oil Search Agree on Terms

This remains a non-binding offer but ostensibly is done. Yet Wulff's resignation, Mubadala's sell-down, and chairman Rick Lee's odd short-term...

David Blennerhassett

Santos/Oil Search: Getting Facts Straight

I would expect Oil Search to engage at ~0.66x, or ~25% premium to last close using both share prices as 24 June. I'd be buying here. I would expect...

David Blennerhassett

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