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>In this insight, we take a look at the names leading the race to become ADDs/DELs for the SE600 and EURSTX Indices for the September 2023 Rebalance.</li>
<li>There could be one intra-review deletion for the SE600 index in July or August.</li>
<li>I see 4 ADDs and 4 DELs for the SE600 index in the September 2023 Rebalance.</li>
</ul>


In this insight, we take a look at the names leading the race to become ADDs/DELs for the SE600 and EURSTX Indices for the September 2023 Rebalance.
There could be one intra-review deletion for the SE600 index in July or August.
I see 4 ADDs and 4 DELs for the SE600 index in the September 2023 Rebalance.


Quiddity Leaderboard SE600 Sep 23: One Intra-Review Change and 4 Regular ADDs/DELs Likely

European Event-Driven Analyst

Jesus Rodriguez Aguilar

<ul>
<li>Deutsche Börse will offer for DKK 735/share for financial software developer SimCorp, 38.9% premium, 6.5x EV/Fwd Sales (in line with other transactions), and 30.3x EV/Fwd EBIT. </li>
<li>DB offers a full price to grow in data&amp;analytics: my EV/EBIT-based standalone fair value is DKK 629/share, plus (all) synergies taxed and capitalised of DKK 87/share results in DKK 716/share.</li>
<li>That figure is still below the offer price, and although gross spread is 0.48%, I'd be long in case of a possible bid by private equity.</li>
</ul>


Deutsche Börse will offer for DKK 735/share for financial software developer SimCorp, 38.9% premium, 6.5x EV/Fwd Sales (in line with other transactions), and 30.3x EV/Fwd EBIT. 
DB offers a full price to grow in data&amp;analytics: my EV/EBIT-based standalone fair value is DKK 629/share, plus (all) synergies taxed and capitalised of DKK 87/share results in DKK 716/share.
That figure is still below the offer price, and although gross spread is 0.48%, I'd be long in case of a possible bid by private equity.


Deutsche Börse/Simcorp: Recommended Offer

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Thematic (Sector/Industry)

<ul>
<li>We stick with our core theme for exchanges of growing post-trading revenues, as well as capitalising on “big data” in financial transactions and data services, as we head into 2023</li>
<li>We identify four relative value opportunities in exchanges; HKEx, LSEG, MexBolsa and Deutsche Borse feature positively multiple times in our value screens and they are all diversifying revenue streams</li>
<li>We stick with Coinbase as the exchange to avoid, in our view; its revenue streams are heavily exposed to low volumes of crypto transactions, and recent events highlight counterparty risk</li>
</ul>


We stick with our core theme for exchanges of growing post-trading revenues, as well as capitalising on “big data” in financial transactions and data services, as we head into 2023
We identify four relative value opportunities in exchanges; HKEx, LSEG, MexBolsa and Deutsche Borse feature positively multiple times in our value screens and they are all diversifying revenue streams
We stick with Coinbase as the exchange to avoid, in our view; its revenue streams are heavily exposed to low volumes of crypto transactions, and recent events highlight counterparty risk


Global Exchanges – Conviction Picks for 2023

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>This is now the third Int'l Compass/third week in a row where we are discussing an increasing number of country indexes experiencing bullish 3.5-9-month downtrend reversals.</li>
<li>Importantly, all of the previously mentioned indexes are holding above their breakout levels (i.e., there has yet to be any failed breakouts).</li>
<li>Now, the U.S. dollar (DXY) is starting to show early signs of topping. We continue to believe that global equities are going through a bottoming process.</li>
</ul>


This is now the third Int'l Compass/third week in a row where we are discussing an increasing number of country indexes experiencing bullish 3.5-9-month downtrend reversals.
Importantly, all of the previously mentioned indexes are holding above their breakout levels (i.e., there has yet to be any failed breakouts).
Now, the U.S. dollar (DXY) is starting to show early signs of topping. We continue to believe that global equities are going through a bottoming process.


U.S. Dollar Topping?; Bullish Reversals Continue; Ideas in Growth/Cyclicals, Financials

<ul>
<li>Exchanges continue to seek revenue streams outside of the traditional trading fees in post-trading, as well as capitalising on “big data” in financial transactions and data services</li>
<li>We identify three relative value opportunities in exchanges; MexBolsa, B3 and Deutsche Borse feature positively multiple times in our value screens and they are all diversifying revenue streams</li>
<li>Coinbase remains the exchange to avoid, in our view, despite its share price collapse; aside from negative news-flow, its revenue streams are heavily exposed to low volumes of crypto transactions</li>
</ul>


Exchanges continue to seek revenue streams outside of the traditional trading fees in post-trading, as well as capitalising on “big data” in financial transactions and data services
We identify three relative value opportunities in exchanges; MexBolsa, B3 and Deutsche Borse feature positively multiple times in our value screens and they are all diversifying revenue streams
Coinbase remains the exchange to avoid, in our view, despite its share price collapse; aside from negative news-flow, its revenue streams are heavily exposed to low volumes of crypto transactions


Global Exchanges – The Quest for Recurring Revenues

Germany

Deutsche Boerse AG provides a variety of stock exchange introduction, trading, and operational services to institutions and private investors. The Company offers electronic trading systems for buying and selling of securities on stock exchanges in Europe.  Deutsche Boerse offers indices such as DAX, MDAX, SDAX, and XTF, as well as trading in options and futures.

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Deutsche Boerse (DB1 GR)

Quiddity Leaderboard SE600 Sep 23: One Intra-Review Change and 4 Regular ADDs/DELs Likely

In the June 2023 Rebal Trade, the suggested SHORTs have generated an average return of around -5.0% and the SE600 index has generated a return of ...

Janaghan Jeyakumar, CFA

Deutsche Börse/Simcorp: Recommended Offer

Deutsche Börse wants to grow in data & analytics and therefore offers a full price in a recommended offer for software solutions developer SimCorp.

Jesus Rodriguez Aguilar

Global Exchanges – Conviction Picks for 2023

Our 2023 picks of HKEx, LSEG, MexBolsa and Deutsche Borse feature positively multiple times in our value screens and they are all diversifying...

Victor Galliano

U.S. Dollar Topping?; Bullish Reversals Continue; Ideas in Growth/Cyclicals, Financials

This is now the third week in a row where we are discussing an increasing number of country indexes with bullish 3.5-9-month downtrend reversals,...

Vermilion Research

Global Exchanges – The Quest for Recurring Revenues

We identify MexBolsa, B3 and Deutsche Borse as exchanges that feature positively multiple times in our value screens and that are diversifying away...

Victor Galliano

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