Financials

• Reportedly, Blackstone is running a ruler over Dexus Property (DXS AU), one of Australia’s leading fully integrated real estate groups. 
• The Australian article flips flops: “Blackstone is understood to have been back on the scene“; but “cooled on the opportunity for now“. 
• Almost exactly four year ago, Blackstone paid A$2.1bn for a 49% stake in the Dexus Australian Logistics Trust, a prime logistics portfolio managed and jointly owned by Dexus.

• Christmas came early for Corp Financiera Alba Sa (ALB SM)‘s shareholders as a 79% premium delisting offer for a holding that was last trading at a whoping 50.7% discount/NAV.
• For a while I had been saying that Alba was very cheap. Although it is difficult to disagree with such a premium, controling shareholders are buying at a 11.5% discount.
• They are value investors after all. Settlement should happen around April 4. Spread is 1.9%/6.4% (gross/annualised). Long Alba shares (not the holding spread).

• We update our views on ten Japanese midcap banks targeting attractively valued beneficiaries of the realization of big strategic shareholdings, as well as beneficiaries of the improving interest rate outlook
• We re-iterate our buys on Hachijuni Bank and Hokuhoku Financial; there is potential to realize their large strategic holdings relative to their market capitalizations combined with their attractive PTBV ratios
• We take Gunma Bank off the buy list, replacing it with Iyogin; Iyogin has a constructive mix of large strategic holdings, attractive valuations and healthy gearing to higher interest rates

• Going into CY25, Nuvama is one of our highest conviction ideas. It has potential to generate 75%+ upside, just from valuation gain.
• India’s wealth management industry is in nascent phase led by under-penetration and a growing affluent, HNI and UHNI clientele.
• Nuvama’s edge is its integrated platform bolstered by technology prowess and a solution-focused approach as opposed to a product-push model. It offers a holistic solution with a robust relationship-driven approach.

• Aviva is acquiring Direct Line for £1.297 cash, 0.2867 AV shares, and £0.05 dividend, totaling £2.70/share.
• Direct Line’s board is prepared to recommend the offer; Aviva is conducting due diligence with a PUSU date set for December 25.
• The offer values Direct Line at 1.6x BV and 2.6x TBV, with potential regulatory scrutiny due to market share.

• Kaspi superapp offers strong growth potential in Kazakhstan and plans for expansion into other countries
• Led by a top-notch management team with significant ownership stake and operates with high margins
• Despite concerns about investing in emerging markets, the authors see Kaspi as a compelling long-term investment opportunity with impressive growth potential

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• It should come as no surprise that inflation dominated headlines throughout 2022 and 2023.
• This was largely because central banks around the world, including the U.S. Federal Reserve (Fed) and the European Central Bank (ECB), had to respond to rising inflation by aggressively increasing interest rates.
• The chart below highlights these interest rate changes.

• In Q1 FY07/25, the company reported sales of JPY11.5bn and business profit of JPY1.2bn, showing YoY growth.
• Logistics Investment business saw increased leasing income, with sales of JPY5.9bn and segment profit of JPY820mn, up 70.5% YoY.
• The company sold LogiSquare Narita, resulting in sales of JPY4.5bn and segment profit of JPY583mn, reversing previous losses.

• VCredit Holdings Ltd (2003 HK), a provider of consumer financial services in China, was listed on the 21st June 2018 at HK$20/share. Shares are currently down 90%.
• Ma Ting Hung, VCredit’s chairman, held 35.6% at the time of listing, and currently holds 39.85%.  
• VCredit was suspended this morning pursuant to the Takeovers Code. Now might be the time for Ma to take VCredit back into the fold. 

• IOOF Holdings (IFL AU) shares rose 11% in the final minutes of trade, fueled by media reports suggesting that Bain was in the advanced stages of making a buyout offer.
• The presence of several substantial shareholders necessitates an attractive takeover premium. Takeover interest is unsurprising as Insignia trades at a material discount to peers.
• We use several methods to triangulate the likely offer, which suggests a price range of A$3.44-5.50 per share, with an average of A$4.67, a 37.4% premium to the last close.

• As discussed in PA Gooddoctor (1833 HK) – The Arb Is To Take The Stock, Ping An increased its stake in Lufax (6623 HK) to 56.82% via a scrip dividend.
• This triggered a zero-premium MGO, which closed on the 28 October 2024 with negligible tendering.
• Via an amendment to a tri-party agreement, Ping An subsequently lifted its stake to 66.85%. It’s worth understanding how Ping An has taken its stake >50% and beyond. 

• After the market close on 12 December, the Financial Supervisory Service (FSS) put a break on Hyundai Motor Securities’ rights offering worth 200 billion won.
• The proposed rights offering included issuing 30.1 million new shares, representing 95% of its current outstanding shares (31.7 million).
• We would try to capitalize on the short term bullish upside on its shares of Hyundai Motor Securities and sell into strength.  

• IOOF Holdings (IFL AU) has received an indicative proposal from Bain Capital to acquire all of its shares at A$4/share in cash.
• The offer takes advantage of IOOF Holdings (IFL AU)‘s underperformance over the last couple of years and there could be competing offers from other investment managers. 
• Short interest in IOOF Holdings (IFL AU) is around 2% of shares out and 2.5% of float. There could be short covering in the next few days.

• Cross-Market volatility snapshot highlighting option opportunities. Today’s opportunities are in the Nifty 50 and in Bitcoin
• Nifty 50: The index crossed the 50-day moving average, signaling a bullish trend. Hedging gains is recommended due to expected macroeconomic uncertainty in Q1 2025.
• Bitcoin: Surpassed $100,000, driven by positive sentiment towards the incoming US President’s crypto-friendly stance. Options strategies are suggested, plus how a synthetic Bitcoin bond compares to a corporate bond.

• Insignia Financial (IFL AU), a wealth manager and previously known as IOOF, has announced a A$4.00/share non-binding and indicative proposal from PE outfit Bain Capital.
• The Offer, should it proceed, will be by way of a Scheme.  Apart from IFL’s shareholder approval, a firm bid requires FIRB signing off. 
• IFL’s board is weighing up the Offer’s pros and cons. This probably requires a small bump.

• Discussion on the performance and outlook of various assets, including Solana, Ethereum, and Bitcoin
• Analysis of market trends and potential factors that could drive asset valuations in the future
• Debate on the future dominance and valuation of different L1 networks such as Solana and Ethereum
• Speculation on the potential for an L1 network to surpass the market cap of Bitcoin and gold
• Mention of upcoming report release and the importance of becoming a subscriber for detailed insights

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Lions Gate Entertainment Corporation reported its fiscal second-quarter results, which were influenced by ongoing industry disruption, the lingering effects of the previous year’s strikes, and a disappointing performance at the theatrical box office.
• The company’s Television Group, particularly its unscripted segment, faced challenges due to a continuing market correction.
• In the Motion Picture Group, the poor box office performance of “Borderlands,” along with softer-than-anticipated results from other releases, impacted financial outcomes.

• In this edition: • ABN Amro / ING | both confirm CET1 ratios to be ahead of regulatory requirements • Ahold Delhaize | Albertsons files claim against Kroger after merger attempt was blocked • Shell / SBM Offshore | ExxonMobil plans to further increase oil production • TKH Group | awarded inter-array cable contract for Inch Cape offshore wind farm

• DigiCo REIT (DIGICO AU) raised around US$1.3bn in its Australian IPO.
• DigiCo REIT (DREIT) aims to be a diversified owner, operator and developer of data centres, with a global portfolio and broad investment mandate across stabilised, value-add and development opportunities
• We have looked at the company’s past performance in our previous notes. In this note, we will talk about the trading dynamics.

• In September 2023, TON Foundation and Telegram announced a strategic partnership with the ambitious goal of onboarding 30% of Telegram’s active users to TON by 2028. Serving as the infrastructure layer, TON leveraged Telegram Mini-App to reach and engage Telegram’s vast user base.
• The success of Notcoin paved the way for activating Mini-App users through social games. Subsequently, users were introduced to crypto through airdrops of game-launched tokens and meme coins. To support this growth trajectory, the foundation has utilized TON Grants, The Open League, and offline events to align with these objectives.
• By July 2024, Telegram Mini Apps reached 500 million monthly active users (MAUs), elevating Telegram’s MAUs to a new peak of 950 million. By October, 30 million of these users had transitioned into the cryptocurrency world.

• Sui Network, a blockchain platform from Mysten Labs, is redefining scaling with its object-centric architecture, parallel execution model, and Move programming language.
• By combining innovative consensus mechanisms like Mysticeti and upgrades such as Adelie and Mahi-Mahi, Sui is advancing beyond traditional L1 architectures to support high-throughput and low-latency operations.
• Its ecosystem spans diverse sectors, from DeFi to gaming, while its robust tokenomics and cryptographic features enhance usability and security.

• The Nikkei 225 Index continues its going nowhere trend: there is a pattern however in what it does and it’s quite repetitive as of lately.
• While we don’t attribute predictive value to chart patterns, we do know that a flat trend sooner or later breaks out.
• Our models see limited upside for the current range-bound mini rally (2 weeks in the making). Next we will have a pullback, and it could happen already after this week.

• EAAA India Alternatives Ltd (1619210D IN) (EAAA) is planning to raise about US$177m through its upcoming India IPO. The lead bookrunners for the deal are Axis Capital, Jefferies, Motilal Oswal, Nuvama.
• EAAA is a fund management house with a diversified, multi-strategy platform in large, under-tapped, and fast-growing alternative asset classes, focusing on providing income and yield solutions to its clients.
• As per CARE report, EAAA is one of the leading alternatives platforms in India, in terms of assets under management (AUM) of INR572.62bn (US$6.7bn) as of Sept 24.

• Discussion of ins and outs of option pricing and market risk
• Examples of price volume spirals in meltdown and melt up scenarios
• Exploration of value and instability in market dynamics

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Trump is gradually building a team to “make America great again” in the crypto space—a move that certainly cannot come soon enough.
• The most significant news from the past week includes the following highlights.
• Trump Names David Sacks as White House AI and Crypto Czar’ at Bloomberg

• Not so Outrageous Commodity Predictions Saxo Bank published their annual “outrageous predictions” for 2025.
• I actually found a few theses that I don’t even find that outrageous in its directionaly.
• For example: “The crypto market quadruples to more than USD 10 trillion, the US dollar falls 20% against major currencies and 30% versus gold.

• Intercontinental Exchange, Inc. (ICE) reported record results for the third quarter of 2024, underscoring strong performance across its diverse business segments.
• The company achieved record net revenues of $2.3 billion, marking an increase boosted by both transaction and recurring revenues.
• Notable growth came from its recent acquisition of Black Knight, contributing to a 7% increase in total pro forma revenue compared to the previous year.

• Marsh & McLennan Companies (MMC) delivered a solid financial performance in the third quarter of 2024, continuing its positive growth trajectory.
• The company achieved underlying revenue growth of 5%, supported by strong execution in Risk and Insurance Services (RIS) and Consulting.
• Adjusted operating income increased by 12%, and the adjusted operating margin expanded by 110 basis points, reflecting effective cost management and operational efficiency.

• What you need to know: • Moon River provided a review of its 2024 milestones as well as an outlook for an exciting 2025.
• • 2024 was a busy year for the Company, publishing a PEA on the Davidson Project and acquiring its interest in the Endako Mine.
• • MOO is setup for an active 2025 with several major catalysts planned, including an updated mineral resource estimate and an updated PEA.

• GSHD is a home and auto insurance broker with a mixed corporate and franchised model
• GSHD earns commissions on policy sales through distribution agreements with insurance companies
• Recent quarters have shown significant growth slowdown, leading to concerns about sustainability of franchise model due to high franchisee churn rates

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• There are 2 changes for the S&P 500 INDEX, 2 changes for the S&P Midcap400 Index and 6 changes for the S&P SmallCap600 Index at the December rebalance.
• Apollo Global and Workday will have large flows from S&P 500 INDEX trackers while AppLovin misses out. The SPX adds will have large inflows from the Select Sector index trackers too.
• The outright adds are up a lot in the after-hours and there could be further upside over the next couple of weeks as positioning ramps up.

• On Friday post-close, S&PDJI announced the changes to the S&P500, S&P MidCap400, and S&P SmallCap600 Indices. The S&P500 names will get added to/deleted from the S&P500 Equal-Weight Index too.
• Apollo Global Management (APO US) and Workday Inc Class A (WDAY US) are IN to the S&P500. Qorvo Inc (QRVO US) and Amentum Holdings (AMTM US) are demoted to SmallCap600.
• There is a theoretical quantity to trade, and an expected quantity to trade

• Price action has been mired in a sideways range since hitting these levels in Feb 2024.  Implied’s have come full circle and are at the same levels they were in Feb.
• Option volumes over the past week look to be playing for a break above the sideways range of the last two months or a break below it.
• Skew is very steep with heavy Put volumes and open interest at levels under the current range.

• Just two days ago, Bitcoin surged past the $100,000 milestone for the first time, reaching a peak of $104,000.
• This achievement is highly significant, not only because it represents a critical psychological threshold but also due to the immense media attention such milestones attract.
• Historically, this kind of coverage has often spurred increased interest from retail investors, who may be prompted to purchase Bitcoin as a result.

• In the US, the November nonfarm payrolls came in marginally above expectations at 227 k (220 k e), and were up significantly from the upwardly revised 36 k figure for October (which was impacted by two hurricanes and a strike at Boeing).
• Still, the three-month average payroll growth slowed from earlier in the year to 173 k.
• Meanwhile, the unemployment rate inched up to 4.2% (4.1% e / 4.1% p). Average hourly earnings growth remained steady at 0.4% m-o-m (0.3% e / 0.4% p) and 4.0% y-o-y (3.9% e / 4.0% p).

• Gordan Tang (& his wife Celine) acquired 2.14% in Suntec REIT (SUN SP), lifting their stake to 31.45% from 29.31%, triggering a MGO.
• The Offer Price is $1.16/share against a recent close of $1.17. The Offer will be conditional on a 50% acceptance hurdle. That’s it. This is purely a technical Offer. 
• Share popped 7% on the news, and closed up ~5%. This appears unwarranted. Tang is not going to take Suntec private. But ESR Group (1821 HK) may be exiting. 

• There are 8 adds and 7 deletes for the Yuanta/​P-Shares Taiwan Dividend Plus ETF in December. We had a 100% hit rate on our forecasts.
• Estimated one-way turnover is 22.1% resulting in a one-way trade of TWD 78.8bn (US$2.4bn). There are 16 stocks with over 5 days of ADV to trade.
• There has been a big increase in short interest on some of the deletions and there could be some short covering the stocks closer to implementation date.

• Short-Date IVs reprice higher as active contract rolls over to 12.12.2024 expiry. Elevated risk-premia justified as contracts capture RBI rate decision & U.S. NFP event risks.
• Re-Pricing of front-end IVs has kicked Vol term-structure into Backwardation. Monthly & Quarterly IVs remain unchanged. Current Vol curve shape is at odds with improving sentiment in underlying Index.
• Strategic Implications: (1) Avoid Short Gamma exposure. (2) Continue allocation to Short Vega + Short Smile structures. (3) Look for Nifty50 trading range to stabilize as trigger for Skew harvesting.   

• Ares Management (ARES US) entered into a definitive agreement a $3.7 billion acquisition of GLP Capital Partners’ international operations.
• The acquisition is structured with a mix of cash and stock, including performance incentives.
• The deal, subject to regulatory approvals, will impact Ares’ presence in a global and a major US index, potentially creating significant passive demand.

• Donald Trump’s election and the subsequent bull run to 100k has emboldened Bitcoiners. Many of them are now calling for the US government to build what they call a Strategic Bitcoin Reserve.

• This idea has been floating around for a while. Robert Kennedy Jr. gave it a big boost in July when he promised to make the Treasury buy a quarter of all Bitcoin in circulation was he elected as president.

• Since the election, various crypto celebrities have chimed in and politicians at the state and the federal level have come up with policy proposals to push this agenda.

• Aviva’s sweetened 275p proposal for Direct Line, with a 73.3% premium, aims to strengthen its UK insurance market leadership and achieve £100M+ cost synergies, enhancing profitability and competitiveness.
• The proposal values Direct Line at an 13.05x forward P/E multiple, higher than its five-year average of 9.95x. The acquisition is a transformative move for Aviva amidst ongoing sector consolidation.
• PUSU deadline is 25 December. Gross spread is 8.8%. I believe Aviva will make a firm offer and would be long the spread. 

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments: Kioxia Holdings (285A JP) IPO, Hulic Co Ltd (3003 JP) and Sanrio (8136 JP) placements.
• Event-Driven developments: ESR Group (1821 HK), HKBN Ltd (1310 HK), Lifestyle China (2136 HK), Seven & I Holdings (3382 JP), De Grey Mining (DEG AU), Sg Fleet (SGF AU). 

• JB Financial is a Korean regional bank involved in traditional banking services such as mortgage loans, auto loans, and asset management
• The bank has a stable performance with a 10-12% return on common equity and a strong 12.5% CET1 ratio, but trades at a low valuation of .56xTBV and 4-5x earnings
• Activist fund Align Partners has influenced JB’s capital allocation decisions, advocating for buybacks and higher capital returns, while the bank offers a significant 6.6% dividend that has been growing at a double-digit rate

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• I tally 52 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Five new deals this week: De Grey Mining (DEG AU)‘s scrip merger; and cash Offers for ESR (1821 HK), HKBN (1310 HK), Lifestyle China (2136 HK), and Suntec (SUN SP).
• Key updates/news took place on: Latin Resources (LRS AU), Hotel Property Investments (HPI AU), Sg Fleet (SGF AU), Malaysia Airports (MAHB MK), Greatview Aseptic Packaging (468 HK), and MPHB (MPHB MK).

• St. James’s Place plc experienced a 50% decline in shares due to changes in fee structure impacting earnings
• Despite challenges like regulatory provision and dividend cut, the company’s long-term SaaS conversion remains promising
• Estimates project a 6% decline in earnings power but potential for significant value increase by 2030, making the current low valuation an opportunity for investors

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Back in August 2021, ESR Group (1821 HK) acquired unlisted ARA Asset Management for US$5.2bn. This was discussed in ESR Cayman (1821 HK) Takes Out ARA Asset Management. 
• Included in the transaction (completed early-2022) was ARA’s ~30.7% stake in office play Cromwell Property (CMW AU). 
• ESR has in the past said Cromwell was a non-core holding. With ESR now expected to be privatized by Warburg/Starwood, does this accelerate the narrative?

• The index changes for the T50/100 index family and the TDIV index were confirmed after market close on Friday 6th December 2024.
• There will be one ADD/DEL for T50, five ADDs/DELs for T100, and 8 ADDs/7 DELs for TDIV. All of these are perfectly in line with our final expectations. 
• In this insight, we take a look at Quiddity’s final flow expectations for the December 2024 index rebal event and potential trade ideas based on the flow dynamics.

• Michael discusses the journey from being a non-believer in bitcoin to a strong advocate and investor in the asset class
• He compares his investment strategy in bitcoin to Warren Buffet’s investment in Apple, emphasizing the importance of owning and holding onto assets
• Michael explains his belief that there are three ways to make money: making something, trading something, or owning something, and highlights his focus on owning and holding assets as a key to success.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• RHB Bank is our Malaysian bank top pick, with its real turnaround potential for returns; CIMB remains a buy but is less compelling than RHB given its marked re-rating year-to-date
• Our new buy RHB Bank is stand-out value versus its Malaysian peers and it is improving returns from low levels; its main delinquency challenges are concentrated in small overseas portfolios
• We reiterate our buy on CIMB; management continues to drive credit quality with cost of risk improvements, and we see potential for operating efficiency gains, combined with its attractive valuations

• Our previously posted view on an upcoming KOSPI 200‘s rally has not been changed by the attempted political coup. The market pulled back a bit, no big deal.
• The index is in the process of bottoming, as we will see from the analysis of our QUANTCHARTS / models.
• Even if the index suddenly crashes, we have identified an area for support in that event (keep reading).

• The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
• The rankings used for the December 2024 index rebal event will be based on yesterday’s (4th December 2024) opening prices. Announcement date will be 
• Inside we take a final look at the potential ADDs and DELs leading the rankings for the upcoming review. 

• Declaring its Offer unconditional was always a possibility as Hotel Property Investments (HPI AU) board continues to reject terms. The alternative was a likely deal fail.
• Charter Halls currently has 31.37%, including 6.66% via the acceptance facility.  That facility has now closed following this unconditional statement. 
• It will be challenging for Charter Hall to clear 50% without board support. But IF they get 50%+, expect the board to change their mind and recommend shareholders accept terms.

• Implementation of SEBI’s new F&O circular to remove weekly option contracts, is expected to significantly impact BSE’s market share in derivatives. 
• The new F&O circular is anticipated to considerably affect BSE’s topline and bottom line. Management believes the initiatives will ultimately enhance market efficiency and benefit investors. 
• With removal of weekly contracts, it is expected that volumes will increase in existing contracts, which will benefit more to BSE vs NSE. 

• By driving double-digit sales and OP growth at both Wealth Consulting and Real Estate Solutions during Q1-3 FY12/24, the company continues to demonstrate positive earnings momentum as well as its ability to ride the powerful trend in Japan’s aging demographics.
• Management continues to show improvement in capital allocation by announcing an earnings- accretive acquisition of the Chester Group, a domestic inheritance specialist firm, together with a 5.12% share buyback program.
• This approach to reinvesting capital into the growth of the business together with the buyback shows an effort to offset dilution, demonstrating a commitment to shareholder value and financial strength.

• Investors are cautious about EPR Properties due to concerns about the movie theater industry’s impact on its financial performance
• EPR has a diversified portfolio, strong lease metrics, and potential for growth in other leisure sectors
• Despite short-term industry challenges, EPR Properties offers long-term value and potential for growth with solid underlying property fundamentals and a track record of success

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• ESR Group (1821 HK)’s preconditional scheme offer from the consortium is either cash (HK$13.00), scrip or a combination of cash/scrip. The offer is final.
• The precondition relates to several regulatory approvals. The precondition satisfaction does not carry the same risk as the China Traditional Chinese Medicine (570 HK) deal break.   
• The irrevocable (31.03% of outstanding shares) ensure that shareholders with blocking or close to blocking stakes are supportive. This is a done deal, with timing the key risk. 

• HK$13.00/Share (deemed final). That’s the key takeaway here as the Starwood/Warburg Pincus Consortium (finally) tables a firm offer, by way of a pre-conditional Scheme.
• Pre-Conditions are extensive, with a long stop date of the 4th September 2025.
• HK$13.00 is below prior expectations of a HK$14+ handle. But with irrevocables of 30.79% of the register (and 51.24% of Scheme shares), this is done. A scrip option is afforded.

• GEM banks Bradesco, Hana and Bank of Baroda are buys due to deep value with positive returns catalysts; the sell on premium-valued Nubank is due to fundamental return headwinds emerging
• In the Japanese banks we identify Mizuho and Resona as key beneficiaries of higher benchmark rates going forward, alongside very attractive valuations and supported by strategic share portfolios
• CME Group is our 2025 pick in global exchanges, as a flow monster with a very strong competitive position; PagSeguro is the deep value, contrarian pick in payments

• The KOSPI 200 is in a steady bear market with political turmoil further depressing the outlook. Volatility increased in the near term, leading to an inverted term structure.
• The Nifty 50 is approaching its 50-day average from below. Call options profit from low implied volatility and present an attractive opportunity to profit on the upside.
• The Hang Seng continues to stand out as the index with positive correlation between implied volatility and index performance. Interestingly, the relationship is not symmetric between up- and down moves.

Georgia Capital’s (GCAP’s) net asset value (NAV) per share increased by 6.2% q-o-q in Q324 in Georgian lari terms (3.3% in sterling). The private portfolio companies performed well operationally, whereas the stock value of GCAP’s holding in Bank of Georgia (BoG) remained flat quarter-on-quarter, after de-rating in Q224 amid political uncertainty. Meanwhile, international strategic investors seem to remain confident in Georgia’s prospects, as highlighted by GCAP’s strong uplift on the disposal of the beer and distribution business to Royal Swinkels, which added 1.8pp to its NAV performance. GCAP continues NAV-accretive buybacks (+2.4pp accretion in Q324) financed by record-high recurring dividends received from the portfolio. However, its shares continue to trade at a wide discount to reported NAV of 48.9% (narrowing slightly versus the one-year average of 54.6%).

Q324 DPS was fully covered by adjusted earnings and despite a delay in resolving rent collection with My Space, one of the two recent problem tenants, we expect this to remain the case. My Space has ceased its partial rent payments since June but rent collection on the assets re-tenanted from Parasol to Westmoreland is expected to increase. With a My Space resolution taking longer, our forecasts for FY24 are reduced but are sufficient to cover DPS., while the shares continue to yield more than 9%.