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

<ul>
<li>ZIP announced that it would acquire Sezzle in an all-stock deal. It also announced its earnings and that it would raise A$149m (A$107m) from a placement.</li>
<li>We have also covered the Oct 2020 placements in our earlier note, <a href="https://www.smartkarma.com/insights/zip-placement-sorry-it-s-not-you-it-s-me" target="_blank" data-smartkarma-citation="insights:44380" rel="noopener">Zip Placement - Sorry, It's Not You. It's Me</a>. </li>
<li>In this note we will talk about the recent developments and run the deal through our ECM framework.</li>
</ul>


ZIP announced that it would acquire Sezzle in an all-stock deal. It also announced its earnings and that it would raise A$149m (A$107m) from a placement.
We have also covered the Oct 2020 placements in our earlier note, Zip Placement - Sorry, It's Not You. It's Me. 
In this note we will talk about the recent developments and run the deal through our ECM framework.


ZIP Acquisition and Unlinked Placement - Too Many Things at Once

<ul>
<li>Education Australia, the largest shareholder of IDP Education, last raised around US$858m (A$1.1bn) via selling 15% of IDP Education in Aug 2021.</li>
<li>The lock-up from that deal is set to expire later this month, which will result in an additional 12.5% of the company’s shares, worth US$670m (A$927m) being unlocked. </li>
<li>In this note we will talk about the recent results and the upcoming lockup expiry.</li>
</ul>


Education Australia, the largest shareholder of IDP Education, last raised around US$858m (A$1.1bn) via selling 15% of IDP Education in Aug 2021.
The lock-up from that deal is set to expire later this month, which will result in an additional 12.5% of the company’s shares, worth US$670m (A$927m) being unlocked. 
In this note we will talk about the recent results and the upcoming lockup expiry.


IDP Education Placement - Time for Round 2 (US$700m Worth) Of the Selldown

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>Less than half the active Global managers in our analysis have exposure to Australian stocks, the lowest levels in over a decade.</li>
<li>Versus the MSCI ACWI benchmark, Australia is the 3rd largest underweight country holding globally, with sector-wide declines in ownership occurring over the last 6-months, headed by Materials.</li>
<li>Underweights are driven by BHP Group (BHP AU) and Commonwealth Bank of Australia (CBA AU), with CSL Ltd (CSL AU) the most widely held stock in Australia.</li>
</ul>


Less than half the active Global managers in our analysis have exposure to Australian stocks, the lowest levels in over a decade.
Versus the MSCI ACWI benchmark, Australia is the 3rd largest underweight country holding globally, with sector-wide declines in ownership occurring over the last 6-months, headed by Materials.
Underweights are driven by BHP Group (BHP AU) and Commonwealth Bank of Australia (CBA AU), with CSL Ltd (CSL AU) the most widely held stock in Australia.


Australia:  Underweight & Underowned as Allocations Slip to All-Time Lows.

Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

Commonwealth Bank of Australia / Equity Bottom-Up

<ul>
<li>CBA reported modestly weaker FY 1H22 cash results from continuing operations of AUD 30.5 bn, which attributed primarily to a 77.1% decline in loss provision reversals; </li>
<li>Despite the poor result, CBA has chosen to pull on numerous earnings levers to make even these numbers; and </li>
<li>While credit has improved, reserves will need to be buttressed as we head into a period of higher interest rates.   </li>
</ul>


CBA reported modestly weaker FY 1H22 cash results from continuing operations of AUD 30.5 bn, which attributed primarily to a 77.1% decline in loss provision reversals; 
Despite the poor result, CBA has chosen to pull on numerous earnings levers to make even these numbers; and 
While credit has improved, reserves will need to be buttressed as we head into a period of higher interest rates.   


Commonwealth Bank of Australia – Pulling On All Earnings Levers

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<ul>
<li>As expected, S&amp;P DJI have announced that <a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP Group (BHP AU)</a>'s weight in the S&amp;P/ASX indices will be increased all at once at the close of trading on 28 January. </li>
<li>We estimated passive S&amp;P/ASX trackers will need to buy over A$4bn of <a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP Group (BHP AU)</a> leading to a funding sell of that size on the other index constituents.</li>
<li>
<a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP Group (BHP AU)</a> has risen 25% from its lows in November. We expect most UK shareholders have finished selling shares and the one-shot inclusion could take the stock higher.</li>
</ul>


As expected, S&amp;P DJI have announced that BHP Group (BHP AU)'s weight in the S&amp;P/ASX indices will be increased all at once at the close of trading on 28 January. 
We estimated passive S&amp;P/ASX trackers will need to buy over A$4bn of BHP Group (BHP AU) leading to a funding sell of that size on the other index constituents.

BHP Group (BHP AU) has risen 25% from its lows in November. We expect most UK shareholders have finished selling shares and the one-shot inclusion could take the stock higher.


BHP Unification - ASX Upweight in One Shot

Australia

Commonwealth Bank of Australia provides banking, life insurance, and related services for individuals, small businesses and medium sized commercial enterprises. The Bank provides corporate and general banking, international financing, institutional banking and stock broking and funds management such as superannuation product.

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Commonwealth Bank of Australia (CBA AU)

ZIP Acquisition and Unlinked Placement - Too Many Things at Once

ZIP announced that it would acquire Sezzle in an all-stock deal. It also announced its earnings and that it would raise A$149m (A$107m) from a...

Sumeet Singh

IDP Education Placement - Time for Round 2 (US$700m Worth) Of the Selldown

Education Australia, the largest shareholder of IDP Education, last raised around US$858m (A$1.1bn) via selling 15% of IDP Education in Aug 2021....

Sumeet Singh

Australia: Underweight & Underowned as Allocations Slip to All-Time Lows.

Less than half the active Global managers in our analysis have exposure to Australian stocks, the lowest levels in over a decade.

Steven Holden

Commonwealth Bank of Australia – Pulling On All Earnings Levers

CBA: CBA reported modestly weaker FY 1H22 cash result, attributed primarily to a 77.1% decline in provision reversals. Despite the result, CBA did...

Thomas J. Monaco

BHP Unification - ASX Upweight in One Shot

The BHP upweight in the ASX indices will be done all at once at the close on 28 January. This will mean A$4bn of BHP to buy and a funding sell on...

Brian Freitas

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