Financials

• 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%.

• Martial law has been declared 11 times since 1945, but this is the first since Korea’s post-‘90 democratization.
• The Martial Law Command’s first proclamation blocks parliament, raising legal questions about its constitutionality and making any immediate attempt to end martial law uncertain.
• Defense and telecom stocks could outperform short-term due to martial law, making them strong trading targets to watch.

• China Investment Corp owns 7.84% of Goodman Group (GMG AU) and is looking to sell 50.4m shares (2.64% of shares out) at a price range of A$37.55-37.6/share, a tiny discount.
• Goodman Group (GMG AU) has run away from its peers over the last couple of years and there could be a move lower in the stock following the placement.
• There will be limited passive buying in the short-term coinciding with the placement. There will be some more passive buying in February.

• CIC is looking to raise around US$1.2bn, via selling around 2.6% of its stake in Goodman Group (GMG AU) , via a block trade.
• Goodman’s shares have performed exceptionally well over the past year, driven by its pivot towards data centers.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• DigiCo REIT (DIGICO AU) is looking to raise 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 IPO valuations.

• Chailease offers an alternative view on China lending than the large mainstream banks there
• Data through 9M24 shows very high growth of its China impairment costs at +62% YoY
• Its lending in China is slowing sharply, often a reaction to worsening credit metrics

• In a previous insight we presented a forecast where the Hang Seng Index could bounce after a 2-3 weeks pullback. The index started to rally from there.
• Currently the index is up for 2 consecutive weeks and from the charts and models that we will present here, you can see that it has room to go higher.
• Right now the index has not even reach the 25% (price) resistance level, and this confirms the bullish view.

• Equity Commonwealth is in late-stage liquidation; a $19/share dividend is set for December 6, with a remaining distribution expected in Q1 2025 between $1-$2/share.
• The Denver property, 17th Street Plaza, is expected to sell for $142 million, with potential risks of sale delays beyond Q1 2025.
• Wind-down expenses are estimated at $0.40-$0.50/share, mainly for executive compensation, with contingency reserves expected to be under $10 million.

• In Crypto Moves #44 from September 19, we stated that Ethereum would shine again.
• This prediction appears to be steadily materializing.
• Since the U.S. Presidential election, Ethereum has regained some of the ground it has lost against Bitcoin during the year.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: New World Development, Indofood CBP, Azure Power, Adani Green Energy, Meituan
• In the US, treasuries climbed in a holiday-shortened session on Friday, with yields falling 8-10 bps across the curve. The yield on the 2Y UST dropped 8 bps to 4.15%, while that on the 10Y UST declined 10 bps to 4.17%.
• Equities rallied, with the S&P 500 rising 0.6% to a new record high of 6,032.

• Moreover, reflecting discussions concerning TRC’s business, financial performance and other matters, TRC reached a standstill agreement last month with Nitor Capital, which had voiced concerns about the company’s direction and operations.
• We view the agreement as a positive outcome of their discussions, particularly in light of the new board composition.
• The substantial need for industrial, commercial and residential space near TRC’s land — likely heightened by the opening of the nearby Hard Rock Hotel & Casino Tejon next year — underscores the attractiveness of TRC’s property, in our view.

• The review period for the December rebalance ended on 29 November. There could be one deletion, plus there will be capping changes.
• Waypoint REIT (WPR AU) is the lowest ranked current index constituent and is very close to the deletion threshold.
• We estimate the one deletion and capping changes could result in one-way turnover of 3.6% resulting in a one-way trade of A$23m.

• Put trading was heavy in the Financial sector this week. ICBC and Bank of China were the main contributors to that with 73% and 63% of their volume in Puts.
• ANTA Sports Products had a notable pick up in Call activity this past week as the stock bounces around 3 year lows vs the Hang Seng index (graph at bottom)
• Energy and Real Estate sectors might be the best area to look for low vol opportunities.

• SpareBank 1 Sr-Bank (SRBANK NO) is the number one addition candidate following the merger with SpareBank 1 Sørøst-Norge which increased the security’s float shares.
• Schibsted ASA (SCHB NO) – Class B – is estimated to have surpassed Class A in liquidity which deems it eligible for selection with a high conviction.  
• Carnival PLC (CCL LN) is one of the top three addition candidates after experiencing a ~50% price rally over the last three months. 

• Our positive focus remains on three smaller cap Indian banks, namely Bandhan, Baroda and Union Bank of India (UBI); we stay negative on richly valued ICICI Bank and Kotak Mahindra
• Bandhan has its NPL challenges, but its pre-provision returns have improved and it is a value stand-out; Baroda remains our favourite and UBI has delivered better profitability and credit quality
• Kotak Mahindra is the peer group’s highest return bank post credit costs, but returns continue to erode; ICICI is on premium valuations and we expect credit costs to go higher

• The UK market currently has a lot of companies trading at very cheap valuations, some justifiably, some less so.
• Liquidity and investor interest has just dried up as UK equities have seen 2 straight years of record outflows.
• I’ve found success this year specifically looking at asset backed financial entities such as GABI and DNA2.

• TSE-Listed companies are asked to file “Management Conscious of Capital Cost/Stock Price” awareness reports/policies. Many have. Some are still working on it. And policies change, and CGR reports are updated.
• 344 new CGRs were filed since 31 October. Our tools show every report, links to every document, and now a new diff file tool. Input a name, see the changes.
• The TSE Council for the Followup to Market Restructuring met a month ago. They want more progress and more fairness in fair takeovers. Worth reading the docs (here).

• IV PercentRank metrics indicate middle-of-the-range Risk Premia. “High & Down” vol-state persists for the Vol Regime-Switching model.   
• Front-End IVs battered  as Weekly options expire prior to Friday’s tier-1 event risks. IVs marked down -3.6 vols. 
• IV Term-Structure shifts drastically – from Backwardation to Kinked-Shape. Year-end calendar effects causing Vol-surface distortions.

• dLocal Limited experienced a robust third quarter in 2024, demonstrating strong operational performance with record levels in both Total Payment Volume (TPV) and gross profit.
• Key developments indicate the company is effectively regaining momentum after a less-than-stellar start to the year.
• Positives from the quarter include a notable 41% year-over-year increase in TPV, reaching $6.5 billion.

• In response to a Nikkei article, WealthNavi (7342 JP) disclosed Mitsubishi UFJ Financial (MUFG) (8306 JP)’s tender offer at JPY1,950 per share, an 84.3% premium to the undisturbed price.
• The high premium reflects WealthNavi’s steep 46% YTD share price decline, i.e., the timing is opportunistic. The offer is below the Board’s requested price.
• While the irrevocable has a competing offer clause, a competing proposal is unlikely due to MUFG’s stake. However, a bump is possible if activist(s) take around a 15% stake. 

• Bank Rakyat Indonesia should have a stronger finish to the year with stable credit costs and continuing growth in micro recoveries driving fee income growth, with NIMs remaining stable 
• Loan growth will increase in 4Q2024 but may see a slowdown in 2025 but the bank should see stable credit costs and a rebound in earnings with lower provisions. 
• Foreign ownership and vaulations are back to 2015 lows apart from the pandemic at 2.1x PBV is also a 10-year ex-pandemic low of 1.8x, and trades on 9.6x PER. 

• Q2FY25 performance was mixed with good growth in AUM and volumes, however, loan losses were elevated. AUM growth came in at 29% YoY and 5.5%+ QoQ in Q2.
• Asset quality deteriorated led by retail and SME segments. GNPA worsened to 1.06% in Q2FY25 vs 0.86% QoQ. Credit cost has been around 2.1% vs 1.75%-1.85% guided.
• BAF successfully listed its housing finance subsidiary, BHFL, on Sep 16 2024. Its shareholding in BHFL is down to 88.75% from 100%.

• MUFG (8306) bought 15.5% of WealthNavi (7342 JP) in February at ¥1,718/share – zero premium. The shares fell. Now they are bidding for the rest 13.5% higher.
• WealthNavi forecasts fantastic growth. Dec29 OP is specifically estimated at ¥13.822bn. Everyone agrees there are synergies, but they’re not “valued” because they “cannot be specifically estimated at this moment.” 
• I believe investors should start demanding Synergy CVRs of acquirors when synergies are not included in the fair value calculations. 

• GDS is the leader in China’s data center market.  GDS is well positioned to capture growing demand from generative AI cloud growth
• GDS consists of GDSH (China) and GDSI (international), both businesses are delivering growth and operational excellence
• GDS US share price has rallied 100% YTD, we believe there is further room to grow due to capital flows and attractive valuation

• Early this morning, a Nikkei article said Mitsubishi UFJ Financial (MUFG) (8306 JP) would buy out the remaining 85% of WealthNavi (7342 JP). Expected to be completed by March.
• MUFJ Bank and WealthNavi signed a Business Alliance in February. WealthNavi issued 9.11mm new shares to MUFJ at ¥1,718/share. That was a discount to market and shares are down ~40%.
• WealthNavi’s AUM is growing (¥1.3trln at end-Oct) and the goal is to launch a money advisory platform by FY2026. Now they need to decide on the premium.

• DXY strength through 1Q25 predicted with positive volatility
• Dollar correlations expected to remain firm, with potential pockets of soft cross correlations
• Systematic FX adoptions models highlight opportunities in FX carry via options, short volume strategy, volume reversal model, and volcurve model for 2025

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

• In this insight, we examine the key challenges facing the sector and discuss potential paths forward for MFI-focused lenders. 
• Companies in this sector have seen sharp declines, with stocks down 45% from their 52-week highs and showing negative returns of -37% YTD.
• Considering the Industry data, it would be fair to conclude that the pain in the industry is likely to persist.  CREDAG, SPANDANA, AUBANK, and IIB are key names to watch.

• President-elect Donald Trump has become a prominent figure with the cryptocurrency market, primarily because of his ambitious vision to transform the United States into the “crypto capital of the planet.” This outlook is undoubtedly positive, as the United States holds the title of the largest capital market globally and wields significant influence on the international stage.
• However, many in the crypto market appear to overlook another highly encouraging regulatory development.
• This involves the European Union’s comprehensive Markets in Crypto-Assets (MiCA) regulatory framework, which will be fully implemented across EU member states on December 30th.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Shui On Land
• The US market was closed for Thanksgiving yesterday.
• The Biden administration is weighing additional curbs on the sale of semiconductor and AI memory chips to China, reported Bloomberg on Wednesday.

Foxtons Group’s recent acquisition of estate agents in two London commuter towns highlights the outer-London potential for low-risk, value-added expansion. Furthermore, it adds to the developing success of the company’s strategic vision and implies that medium-term targets are now coming into focus. We have updated our forecasts for the deals, but additional profit from the acquisitions is broadly matched by the increase in employer’s National Insurance costs, hence we retain our valuation of 134p/share and believe that falling interest rates and property market stability are contributing to a buoyant sales market.

Edison Investment Research is terminating coverage on Tetragon Financial Group (TFG). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our website.

Partners Group Private Equity’s (PGPE’s) recent portfolio realisation efforts (supported by the gradual pick-up in M&A activity and an opening IPO window) included, most notably, the sale of SRS Distribution earlier this year (see our September 2024 note for details) and more recently Techem (3.8% of end-Q324 NAV, sold to a trade buyer in October 2024), as well as the successful IPO pricing of Galderma in March and KinderCare in October. The positive valuation effects from these activities (21% weighted average uplift to latest published NAV) were coupled with a 5.1pp contribution to portfolio performance in 9M24 from earnings growth (average 11% increase in last 12-month EBITDA across top 20 holdings) and a slight 1.2pp tailwind from peer multiples. This was partly offset by an increase in portfolio net debt amid several debt package refinancings at a lower spread to strengthen capital structures and in turn support growth. Moreover, the Q324 return was affected by a weakening US dollar, which makes up c 40% of the portfolio’s exposure by currency (although these FX headwinds have more than reversed so far in Q424). As a result, the company posted a moderate 3.1% NAV total return (TR) in 9M24.

• The onchain economy has experienced unprecedented growth in 2024, with a 70% increase in total value locked (TVL) across major networks, surpassing $70 billion.
• Key drivers include the adoption of stablecoins, Layer 2 solutions, gaming, collectibles, and institutional interest.
• Base, an Ethereum Layer 2 incubated by Coinbase, stands out with 1,600% growth in daily transactions and a 470% rise in TVL since January.

• An article in Japanese weekly magazine Bunshun this morning sent shares inSBI Sumishin Net Bank (7163 JP) limit up +17% with a headline that NTT Docomo was interested to buy.
• Without access to the article, I can’t go deep, but the base concept is that NTT Docomo is “worried” about KDDI (which has a bank, as does Softbank Corp)
• It is not clear how serious it is, SBI Sumishin is super-expensive, and buying a bank isn’t the same as buying a company. Hmmm…

• Avjennings Ltd (AVJ AU) disclosed a non-binding indicative proposal from AVID at A$0.67 per share, a 103.0% premium to the undisturbed price. 
• The proposal is subject to due diligence (till 31 January 2025), entry into a scheme implementation deed, and shareholder and regulatory approvals (FIRB and OIO).
• The largest shareholder supports the offer, which represents a 20-year high. AVID has completed initial due diligence, lending confidence that a binding proposal will materialise.

• Last week, we missed an intriguing story that several clients have asked us to explore.
• China issued $2 billion worth of USD-denominated bonds, which might not seem groundbreaking at first glance—it’s not uncommon for China to issue bonds in dollars.
• However, two aspects of this issuance stand out:The Venue: These bonds weren’t issued in the typical financial hubs like New York or Shanghai but in Riyadh, Saudi Arabia—a first of its kind.

• Headline NPL figures at KB Financial (105560 KS) are already of major concern rising by 49% in the past year to 3Q24
• Granular loan classification data is of even greater concern, where substandard loans are up from KRW1,153bn to KRW1,715bn over the same period
• This more benign bucket of NPLs well overshadows loss loans, can migration can mean a substantial rise in credit costs

• On the 28th November, AVJennings Ltd (AVJ AU), a widely recognised home builder in Australia/New Zealand, entered into a deed granting the AVID consortium exclusive confirmatory due diligence.
• AVID, comprising Proprium Capital Partners and AVID Property Group, have pitched an NBIO (by way of a Scheme) of A$0.67/share, in cash, a punchy 103% premium to last close. 
• Apart from entering a SIA after DD (expected end-Jan completion), the Offer requires FIRB and OIO to sign off. AVJ’s board, controlled by Singapore’s SC Global (54.5% shareholder) is supportive.

• Market expectations that the BoJ’s monetary policy meeting will raise benchmark interest rates in December are reflected in the rising JGB yields, and in the domestic lending rate trends
• We reiterate our core recommendations of Resona and Mizuho for their leverage to higher interest rates, their low LDRs and their high share of strategic holdings relative to market capitalisation
• We reduce Chiba to neutral from buy, keep our buy on Concordia; we add Shizuoka for its gearing to higher interest rates and very high share of strategic shareholdings

• A company visit with Bank Central Asia (BBCA IJ) in Jakarta revealed a more cautious view on loan growth looking into 2025, with expectations for high-single-digit YoY growth.
• There is increasing caution amongst customers around the soft economy and the risk of more aggressive tax collection in 2025, reflected in strong growth in holdings of government bonds.
• A company visit with Bank Central Asia (BBCA IJ) in Jakarta revealed a more cautious view on loan growth looking into 2025, with expectations for high-single-digit YoY growth.

• Warren Buffett’s house in Omaha attracts fans from around the world, reflecting his legendary status as an investor
• Succession planning at Berkshire Hathaway raises questions about the future leadership and challenges facing the company after Buffett’s tenure.

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

• Travelers Companies, Inc. reported strong financial performance for the third quarter of 2024, demonstrating a balanced strategy of growth, profitability, and prudent risk management, though not without its challenges.
• Key positives from the earnings call include a significant rise in core income, reaching over $1.2 billion or $5.24 per diluted share, which represents stellar results amidst complex market conditions.
• This increase was driven by a combination of factors such as a 73% surge in underlying underwriting income compared to the prior year, derived notably from net earned premiums at a record $10.7 billion, marking a 10% increase, and a marked improvement in the underlying combined ratio to 85.6%, down by 5 points year-over-year.

• W.
• R.
• Berkley Corporation demonstrated solid financial performance in its third quarter of 2024, despite sector-wide challenges, notably from natural catastrophes.

• Today, Hulic Co Ltd (3003 JP) announced a large secondary offering where about a quarter of the crossholdings will sell down holdings. Some exit entirely. Some partially. 
• After this selldown, there is a fair bit more to go later, but more of that will be corporate. It’s a BIG offering: 55d of ADV and 55% of MRWF. 
• It is “only” about $800mm and retail gets 80% of it. The high div yield will be a selling point but there is a lot of debt.

• For March KOSPI 200 futures, expect a 0.95% to 1% yield for spot-futures arbitrage, with contango depending on year-end ex-div trends and passive inflows.
• Passive inflows into the value-up index in January and spillover effects into K200 futures, potentially fueling year-end contango due to overlap with KOSPI 200.
• Prop trader dynamics are cooling off: Tax-driven buying in December, selling in January likely to ease, reducing the past backwardation. Without it, expect higher volatility in K200 futures.

• Hulic Co Ltd (3003 JP) has announced a secondary offering of up to 85.4 million shares (98.2 million including overallotment), worth around US$800 million (US$920 million including overallotment).
• Unlike the 2021 offer, this is a pure secondary offering. It is smaller in terms of outstanding shares and 1-year ADV. The shares are hovering around all-time highs.
• Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 10 and 12 December (likely 10 December).

• A group of domestic financial institutions are looking to raise US$775m from trimming their stakes in Hulic Co Ltd (3003 JP).
• The deal will be a large one to digest at 48 days of the stock’s three month ADV, representing 11% of its shares outstanding.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Overnight, Hulic Co Ltd (3003 JP) announced a placement of 85.37m shares to unwind crossholdings and improve corporate value. There is an overallotment option for another 12.8m shares.
• There will be limited passive buying in the short-term and the number of shares offered is a very large percentage of real float of the stock.
• A price drop of 20% or more puts Hulic Co Ltd (3003 JP) at risk of deletion from a global index and could lead to a further price drop.

• Quick trading idea:  S&P 500 INDEX DAILY is overbought. Has been closing up for 7 days in a row, soon there will be a DAILY reversal (lasting => 1 day).
• The ideal area to go short is the price area above yesterday’s Close (6021.63).
• Alternatively go SHORT today at the Close. The interactive chart for the SPX DAILY can be freely accessed here.

• With 42 years under its belt, ERA Asia Pacific, a wholly owned subsidiary by APAC Realty, embraces technology to empower agents in delivering elevated services with a personal touch.
• In recent years, APAC Realty – which operates a real estate brokerage in Singapore under the ERA brand – has embraced technology, viewing digital tools not as threats but assets to support its agents and enhance their work.
• Together, agents from ERA Asia Pacific account for 57.4% of ERA’s global network of real estate agents.

• SYF, DFS, and ALLY are spinoffs from larger companies in consumer finance and create shareholder value through focused strategies and good management culture.
• ALLY is particularly interesting due to rate-cycle dynamics and a shift from investing in competitive strength to harvesting from past investments.
• The onboarding of a new CEO at ALLY suggests potential developments in the company’s strategy, with a focus on management culture, competitive strength investment, and the impact of the current rate cycle on earnings power.

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.

• Hyundai Motors Securities announced a rights offering worth nearly 200 billion won involving a 49% shares dilution. 
• The amount of shares dilution is excessive which is likely to result in a share price weakness in Hyundai Motor Securities in the coming weeks.
• The expected rights offering price for now is 6,640 won per share which is 24.5% discount to the closing price on 26 November.

• DigiCo REIT (DIGICO AU) is looking to raise nearly A$2bn in its IPO by selling 399.1m shares at A$5/share. Stock is expected to list on the ASX on 12 December.
• HMC Capital (HMC AU) will own 18.2% of DigiCo REIT (DIGICO AU) after the IPO while IPO investors will own 72.5% of the company.
• Subject to DigiCo REIT being an eligible stapled security, we expect the stock to be included in global and local indices between March and June mopping up 11.7% of float.

• Last Thursday, I shared my conviction in our Telegram crypto chat:
• My two cents: We touch $100,000 (or very close) but we do not comfortably get on the other side.
• This makes all the leverage and open interest (and retail euphoria) turn against us.
• After witnessing the Bitcoin price face repeated rejections since then, I am even more confident in this view.

• The Nikkei 225‘s trend is uncertain at the moment: the new N225 WEEKLY QUANTCHART presented here (freely accessible 24/7 clicking here) shows us the current MRM models’ support and resistance.
• In the last few months the index stalled, currently it is stuck in a range roughly between 37650 and 40250, and it has closed down for 2 consecutive weeks (CC=-2).
• At the moment we expect the index to fall maybe another week (closing this week down) and then a LONG reversal the following week.

• Old Republic International Corporation reported its third-quarter 2024 earnings, revealing mixed results influenced by a range of market factors.
• The company’s consolidated pretax operating income declined to $229 million, down from $251 million in the prior year.
• Similarly, the consolidated combined ratio rose to 95% from last year’s 92%, indicating a deterioration in underwriting performance.

• The Hanover Insurance Group’s recent financial results for the third quarter show a complex but generally positive picture of the company’s performance.
• The firm reported an operating income of $3.05 per diluted share, with an operating return on equity of 14.4%.
• This performance reflects improvements driven by strategic initiatives such as enhanced pricing, adjustments in insurance value, and targeted underwriting actions.

• Lincoln National Corporation delivered a strong performance in the third quarter of 2024, showcasing its highest quarterly adjusted operating income in over two years.
• This reflects positive momentum across all its business lines, driven by strategic initiatives focused on capital foundation, operating model optimization, and profitable growth.
• The company has made considerable progress in aligning its operations with these strategic goals, although it acknowledges that the transformations required are part of a multiyear journey.

• CNA Financial Corporation reported strong financial performance in the third quarter, reflecting robust growth in core income and investment results, as well as strong underwriting performance.
• The core income for the quarter was $293 million, driven by a $73 million increase in net investment income to $626 million pre-tax.
• This surge in investment income was propelled by the positive performance of CNA’s alternatives portfolio and the growth of its fixed-income investments, which benefitted from higher book yields and a larger asset base.

• Chubb Limited delivered a robust third quarter of 2024, posting significant growth in its Property and Casualty (P&C) underwriting, investment income, and life insurance segments.
• Core operating income increased by 14.3% year-over-year to $2.3 billion, contributing to a 16.9% rise in net income.
• The global P&C premium revenue grew by 7.6%, translating to an 8.5% increase in constant currency, reflecting strong performance across its diversified international markets and business segments.

• Treasuries surged yesterday, with yields falling 10-13 bps across the curve after a strong auction of 2Y notes and in the wake of US President-elect Donald Trump’s nomination of Scott Bessent as the next Treasury Secretary.
• Mr Bessent is expected to implement Mr Trump’s tax cuts, while reducing the budget deficit and boosting GDP growth through deregulation and other pro-growth policies.
• The yield on the 2Y UST fell 10 bps to 4.27%, while that on the 10Y UST declined 13 bps to 4.28%. 

• Using data from the close on 25 November, there could be 6 adds and 5 deletes for the Yuanta/​P-Shares Taiwan Dividend Plus ETF in December.
• There will also be capping and funding flows that will lead to a one-way turnover of 17.3% and a one-way trade of TWD 60.6bn (US$1.86bn).
• On average, the forecast adds have started to outperform the forecast deletes. Positioning should continue in stocks that have large flow/impact or have recently joined the list of forecast adds/deletes.

• In this insight, we take look at Quiddity’s expectations for index changes and capping flows for the TDIV Index for the December 2024 index rebal event.
• Today is the base date for the final ranks and we see five ADDs and four DELs.
• We estimate one-way flow to be around US$1.68bn with multiple names having 5x ADV or more to trade.

• UniCredit SpA (UCG IM) launches an all-share takeover bid for 100% of Banco BPM SpA (BAMI IM). The exchange equation is 0.175 UCG IM x 1 BAMI IM.
• The implied value of Banco BPM shares is €6.6658/share, just a 0.3% premium. The transaction offers strong financial appeal, with Banco BPM trading at 0.72x P/BVPS and 11.52% dividend yield.
• The gross spread of +7.4% suggests UniCredit may need to enhance the offer—adjusting the exchange ratio and/or adding cash—unless its share price approaches the IBES median target.

• IVs trade higher in spite of a late-week recovery in equities. Negative correlation between Index & option premiums reasserted as multiple holidays fall off the calendar.    
• Vol-Regime Switching Model firmly lodged in “High & Down” state. Allocation to Iron Condors/ Iron Butterflies recommended.   
• Vol surface characteristics also reflecting increased risk premia – Skew extends away from overly compressed levels. Vol term structure swings from Contango to Backwardation.

• The NIFTY Index (NIFTY INDEX) finished last week in positive territory. A longer rally could ensue.
• This Insight provides option strategies based on the resistance and support levels identified in the quantitative Insight EQD | NIFTY 50: State Of The Odds.
• Volatility skew and option liquidity inform three strategies, which include a Capped Risk Reversal, a Risk Reversal, and a Call Spread.

• On November 7, 2024, Migalo Holdings Inc. (hereafter, the Company) announced its Q2 FY2025/3 earnings results.
• In H1, sales increased 23.3% YoY to JPY 30,001 mn, and operating profit fell 15.6% YoY to JPY 1,935 mn.
• Q1 saw a decline in sales and profit due to the impact from last year’s concentration of new property deliveries.