Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>The EURO STOXX 50 Index is one of the most highly-watched indices in mainland Europe and the annual index review takes place in September.</li>
<li>In <a href="https://www.smartkarma.com/insights/euro-stoxx-50-quiddity-leaderboard-for-sep-22-eurozone-s-annual-big-impact-rebal-trades" target="_blank" data-smartkarma-citation="insights:72736" rel="noopener">Euro Stoxx 50 Quiddity Leaderboard for Sep 22: Eurozone's Annual Big Impact Rebal Trades</a>, we looked at the Potential ADDs/DELs and the historical performance of Rebalance Events. </li>
<li>With less than a week left until the Reference date, we take a final look at the rankings in this insight.</li>
</ul>


The EURO STOXX 50 Index is one of the most highly-watched indices in mainland Europe and the annual index review takes place in September.
In Euro Stoxx 50 Quiddity Leaderboard for Sep 22: Eurozone's Annual Big Impact Rebal Trades, we looked at the Potential ADDs/DELs and the historical performance of Rebalance Events. 
With less than a week left until the Reference date, we take a final look at the rankings in this insight.


EURO STOXX 50 Quiddity Leaderboard: Two Potential ADDs with ~US$1bn Flows Each

European Event-Driven Analyst

Jesus Rodriguez Aguilar

<ul>
<li>Since mid-July, spreads have generally tightened across our liquid universe, including those flagged in July (Investor AB, Roche and Volkswagen).</li>
<li>Trade recommendations long ords / short prefs: Fuchs Petrolub, SSAB Svenska Stal.</li>
<li>Recommendations Long prefs / short ords: Sixt, VW, MFE-Media for Europe, Telecom Italia, Ericsson.</li>
</ul>


Since mid-July, spreads have generally tightened across our liquid universe, including those flagged in July (Investor AB, Roche and Volkswagen).
Trade recommendations long ords / short prefs: Fuchs Petrolub, SSAB Svenska Stal.
Recommendations Long prefs / short ords: Sixt, VW, MFE-Media for Europe, Telecom Italia, Ericsson.


Liquid Universe of European Ordinary and Preferred Shares: August ‘22 Report

<ul>
<li>There has not been a clear trend regarding premiums and discounts across our liquid universe since mid June. I highlight the widening discounts in Investor AB, Roche and Volkswagen.</li>
<li>Trade recommendations long ords / short prefs: Fuchs Petrolub, SSAB.
</li>
<li>Recommendations long prefs / short ords: Sixt, VW, MFE, Ericsson, Schroders.</li>
</ul>


There has not been a clear trend regarding premiums and discounts across our liquid universe since mid June. I highlight the widening discounts in Investor AB, Roche and Volkswagen.
Trade recommendations long ords / short prefs: Fuchs Petrolub, SSAB.

Recommendations long prefs / short ords: Sixt, VW, MFE, Ericsson, Schroders.


Liquid Universe of European Ordinary and Preferred Shares: July ‘22 Report

Global Automotive Stocks/EV Focus/Event Driven, SC Capital

SC Capital

Global Automotive Stocks/EV Focus/Event Driven

Over 22 years covering Japanese equities on both the sell side and the buy side. 

Bottom-up Japan Equities Research

Equity Bottom-Up

<ul>
<li>Tesla faces stiffer competition in 2H 2022 as chip supplies at rivals recover faster than expected. This will put pricing pressure on Tesla amid rising costs. </li>
<li>Cash could be tight in 2H 2022 as Tesla ramps up 2 new factories. There is a distinct possibility of Tesla resorting to equity financing.</li>
<li>If the drop in Q2 earnings doesn't return to high growth again from Q3, Tesla could finally see its valuation fall down to earth. Its premium has already shrunk.  </li>
</ul>


Tesla faces stiffer competition in 2H 2022 as chip supplies at rivals recover faster than expected. This will put pricing pressure on Tesla amid rising costs. 
Cash could be tight in 2H 2022 as Tesla ramps up 2 new factories. There is a distinct possibility of Tesla resorting to equity financing.
If the drop in Q2 earnings doesn't return to high growth again from Q3, Tesla could finally see its valuation fall down to earth. Its premium has already shrunk.  


Tesla May Struggle as Rivals Rebuild Inventory

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Mapletree North Asia Commercial Trust / Equity Bottom-Up

<figure>
 <img src='https://api2.sgx.com/sites/default/files/2022-06/reit%201.PNG' alt='Indicative timeline for Trust Scheme between MCT and MNACT' />
 </figure>
 <div class='content-caption'>Indicative timeline for Trust Scheme between MCT and MNACT</div>
<figure>
 <img src='https://api2.sgx.com/sites/default/files/2022-06/reit%202.PNG' alt='Geographical breakdown of MPACT' />
 </figure>
 <div class='content-caption'>Geographical breakdown of MPACT</div>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
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THE ongoing merger of Mapletree Commercial Trust (MCT) and Mapletree North Asia Commercial Trust (MNACT) is on track to create one of the top 10 largest Reits in Asia.

 
The merged entity, Mapletree Pan Asia Commercial Trust (MPACT) will have an estimated market capitalisation of over S$10 billion and will hold a diversified portfolio of 18 commercial assets across Singapore, China, Hong Kong, Japan and South Korea, with assets under management (AUM) of approximately S$17.1 billion.

 
The Reit managers believe that the merger will provide a pathway for growth by merging MCT, a Singapore-focused Reit, with MNACT, a ready and established platform that has scale and reach in North Asia.

 

MCT said that this will in turn bring about immediate financial benefits and access to attractive footholds into North Asia supported by established local operating teams with extensive experience and a strong track record.

 
Other key benefits cited by the Reits include enhanced financial flexibility to pursue more growth opportunities such as larger acquisitions and capital recycling opportunities, increased liquidity and index representation, enhanced geographic diversification, reduced single asset concentration and improved tenant diversification as well as immediate financial benefits in terms of distribution per unit (DPU) and net asset value (NAV) accretion on a historical pro forma basis.

 
Post-merger, MPACT will hold best-in-class assets such as Festival Walk in Hong Kong, Mapletree Business City and VivoCity in Singapore.

 

The Reit managers believe that together, these will improve overall cash flow stability and resilience through market cycles.

 
MPACT will host major tenants with global businesses such as Google, BMW, Seiko, HP Japan and NTT UD.

 
Together, the top 10 tenants by gross rental income (GRI) will contribute 23 per cent of its GRI post-merger. This is down from MCT’s 27.7 per cent and MNACT’s 37.7 per cent, reducing income concentration.

 
Unitholders of MCT and MNACT have voted in favour of the merger last month.

 
The merger will be effected through the acquisition by MCT of all the issued and paid-up units of MNACT by way of a trust scheme of arrangement.

 

During the election period, each MNACT unitholder is entitled to choose only one form of scheme consideration: scrip-only, cash-and-scrip or cash-only options. The cash-only consideration will be the default form of the scheme consideration.

 

Based on indicative dates announced by the Reit managers, the election period is expected to run from Jun 15 to 29 while the merged entity is expected to begin trading on Jul 29.

 
MNACT’s estimated date of delisting will be on Aug 3.

 

REIT Watch is a weekly column on The Business Times, <a href="https://www.businesstimes.com.sg/companies-markets/merger-of-mct-and-mnact-creates-pathway-for-growth">read </a>the original version.
</body></html>


      
    
    Indicative timeline for Trust Scheme between MCT and MNACT

      
    
    Geographical breakdown of MPACT


THE ongoing merger of Mapletree Commercial Trust (MCT) and Mapletree North Asia Commercial Trust (MNACT) is on track to create one of the top 10 largest Reits in Asia.

 
The merged entity, Mapletree Pan Asia Commercial Trust (MPACT) will have an estimated market capitalisation of over S$10 billion and will hold a diversified portfolio of 18 commercial assets across Singapore, China, Hong Kong, Japan and South Korea, with assets under management (AUM) of approximately S$17.1 billion.

 
The Reit managers believe that the merger will provide a pathway for growth by merging MCT, a Singapore-focused Reit, with MNACT, a ready and established platform that has scale and reach in North Asia.

 

MCT said that this will in turn bring about immediate financial benefits and access to attractive footholds into North Asia supported by established local operating teams with extensive experience and a strong track record.

 
Other key benefits cited by the Reits include enhanced financial flexibility to pursue more growth opportunities such as larger acquisitions and capital recycling opportunities, increased liquidity and index representation, enhanced geographic diversification, reduced single asset concentration and improved tenant diversification as well as immediate financial benefits in terms of distribution per unit (DPU) and net asset value (NAV) accretion on a historical pro forma basis.

 
Post-merger, MPACT will hold best-in-class assets such as Festival Walk in Hong Kong, Mapletree Business City and VivoCity in Singapore.

 

The Reit managers believe that together, these will improve overall cash flow stability and resilience through market cycles.

 
MPACT will host major tenants with global businesses such as Google, BMW, Seiko, HP Japan and NTT UD.

 
Together, the top 10 tenants by gross rental income (GRI) will contribute 23 per cent of its GRI post-merger. This is down from MCT’s 27.7 per cent and MNACT’s 37.7 per cent, reducing income concentration.

 
Unitholders of MCT and MNACT have voted in favour of the merger last month.

 
The merger will be effected through the acquisition by MCT of all the issued and paid-up units of MNACT by way of a trust scheme of arrangement.

 

During the election period, each MNACT unitholder is entitled to choose only one form of scheme consideration: scrip-only, cash-and-scrip or cash-only options. The cash-only consideration will be the default form of the scheme consideration.

 

Based on indicative dates announced by the Reit managers, the election period is expected to run from Jun 15 to 29 while the merged entity is expected to begin trading on Jul 29.

 
MNACT’s estimated date of delisting will be on Aug 3.

 

REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - Merger of MCT and MNACT creates pathway for growth

Germany

Bayerische Motoren Werke Aktiengesellschaft (BMW) manufactures and sells cars and motorcycles. The Company offers convertible sports cars, sedans, and touring motorcycles with large displacement engines. BMW serves customers worldwide.

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Bayerische Motoren Werke (BMW) (BMW GR)

EURO STOXX 50 Quiddity Leaderboard: Two Potential ADDs with ~US$1bn Flows Each

I expect 2 ADDs with ~US$1bn inflows each and 2 DELs with ~US$0.5bn in outflows each. While flows are significant, the LONG ADDs-SHORT DELs Trade...

Janaghan Jeyakumar, CFA

Liquid Universe of European Ordinary and Preferred Shares: August ‘22 Report

Since the mid-July report, spreads have generally tightened across our liquid universe, including those flagged in July (Investor AB, Roche and...

Jesus Rodriguez Aguilar

Liquid Universe of European Ordinary and Preferred Shares: July ‘22 Report

There has not been a clear trend regarding premiums and discounts across our liquid universe since mid June. I highlight the widening discounts in...

Jesus Rodriguez Aguilar

Tesla May Struggle as Rivals Rebuild Inventory

A faster than expected recovery in automotive chip supply may put pressure on Tesla's profits as rivals will lower prices. This comes as Tesla...

SC Capital

REIT Watch - Merger of MCT and MNACT creates pathway for growth

THE ongoing merger of Mapletree Commercial Trust (MCT) and Mapletree North Asia Commercial Trust (MNACT) is...

Singapore Exchange Ltd (SGX)

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