Financials

• Mitsubishi UFJ Financial (MUFG US) and 92.7%-held Adira Dinamika Multi Finance (ADMF IJ) have entered into SPAs with key shareholders to acquire an 80.6% stake in Mandala Multifinance (MFIN IJ).
• MUFG and Adira appear to be paying IDR 3,297/share or IDR 7tn all-in. The SPAs are subject to regulatory approvals with completion expected in early 2024. 
• Upon completion, MUFG will hold 70.6% in Mandala and Adira 10% in the Indo car/motorcycle loan lender. This will trigger a Mandatory Tender Offer for the remaining 19.4%.

• Bitcoin briefly hit yearly highs over the weekend and is up 15% week-on-week.
• What’s driving this rapid surge in prices?
• While news of a Blackrock ETF filing is certainly a bullish catalyst, let’s see what the data says. 

• Private debt platform Kilde has raised US$1.1 million in seed funding from investors including Big Sky Capital, Borderless Capital, AXL Ventures, and Algorand Foundation.
• The fresh funds will help the Singapore-based firm expand its private credit offerings and develop SafeBay, its securities tokenization project.
• Founded in 2019, Kilde caters to accredited and institutional investors by giving them access to private credit deals, which can yield annual returns of up to 13.5%. The company said that its investors have seen annual returns of 11.9%.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Central China Securities
• UPL Ltd

• This article delves into the intricacies of Rabby Wallet, an innovative browser extension wallet devised by DeBank.
• The wallet is engineered to respond effectively to the needs of participants within the increasingly complex and rapidly expanding arena of Decentralised Finance (DeFi).
• In the realm of blockchain technology, where DeFi continues to grow and evolve, wallets such as Rabby are of paramount importance. 

• There are 44 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• No new deals were announced this week although the major shareholders of Amara Holdings (AMA SP) are in discussions with a third party
• Key updates took place for SBI Shinsei Bank (8303 JP), Yashili International Holdings (1230 HK), and Eoflow (294090 KS) 

• JMT Network services does debt collection for banks in Thailand
• Earnings are good but not relative to its asset growth with worsening provisions
• Its ROA appears to be in structural decline, with worsening credit metrics in 1Q23

• In this China banks screener; we focus on the potential for increased credit quality headwinds going forward, given the weak GDP growth outlook
• China bank shares have been poor performers and still we see selective buy opportunities, with better credit quality metrics
• We favour Industrial Bank and CCB both of which have attractive valuations; Minsheng, on the other hand, remains exposed to a worsening of the credit quality cycle

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. China Jinmao Holdings
2. Lifestyle International Holdings
3. Geely Auto
4. First Pacific Co
5. Tata Motors Ltd

and more…

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Yanlord Land’s ESG as “Adequate”, in line with its Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Strong”.

• Bank Rakyat Indonesia (BBRI IJ) continues to march to the tune of its micro-lending capabilities with recent moves focused on growing its higher-yield Kupedes and ultra-micro loans. 
• Upward pressure on funding costs in 1Q2023 was more than offset by a shift to higher-yield loans and lower cost of credit, with greater efficiencies through digital initiatives.
• Bank Rakyat Indonesia (BBRI IJ) is somewhat overcapitalized which allows for higher dividend payout and higher ROEs over time. The bank remains a core holding in Indonesia 

• Curve Finance’s CEO Michael Egorov briefly found himself in the spotlight last week as Crypto Twitter spotted him depositing more CRV to Aave V2 in 3 large transactions worth a total of $35mn USD (represented by the orange plus signs below). 
• Currently, his position stands at nearly $200mn CRV deposited and $60mn USDT borrowed, making it one of the largest loans in DeFi history.
• So, why is this significant? And what are the implications for Aave and CRV?

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Powerlong Commercial Management Holdings

• CI Financial is a publicly owned asset management holding company.
• Through its subsidiaries, the firm manages separate client focused equity, fixed income, and alternative investments portfolios.
• It also manages mutual funds, hedge funds, and fund of funds for its clients through its subsidiaries.

• HS Holdings (8699 JP) remains an interesting hodgepodge of assets. It owns just under 50% of Mongolia’s biggest bank, recently IPOed  Khan Bank (KHAN MO). 
• It has a pile of cash. And it has a glorified pawn shop business in Japan. The bank shares must be sold, to a significant degree, by end of year. 
• Today it announced a buyback tomorrow of 6.4% of shares out. I expect it is one of two large individual holders. We’ll probably know more within a week.

• In this insight, we take a look at the potential index changes for ASX 300, 200, 100, 50, and 20 in the run up to the September 2023 Rebalance.
• I currently expect one change for the ASX 100 index and five changes (including one intra-review change) for the ASX 200 index.
• There could be 7 ADDs and 5 DELs for the ASX 300 index.

• Japan Post Bank is no ordinary bank, without much loans, and mostly investments
• It is well-known for its US CLO exposure, but also moving more into private equity
• Many moving parts to the bank’s earnings, where we see downside risk on profit

• KFin Technologies (1804170D IN) was listed on 29th Dec 2022, when it raised around US$180m in its India IPO. Its six-month lockup will expire on 24th Jun 2023.
• KFin Technology (KFin) is a technology driven financial services platform providing comprehensive services and solutions to the capital markets ecosystem.
• Coming up for six-month expiry is General Atlantic (the Promoter) and other pre-IPO shareholders. The Promoter had been the sole selling shareholder in the IPO.

• BlackRock, Inc. stock is overlooked, as most market participants have yet to recognize the firm’s recent inflection points.
• The firm’s base rates improved in Q1, which we think will continue into late 2023 and early 2024.
• However, we still back BlackRock’s stock to succeed.

• Japan and Taiwan have been top bull bets in Asia and still a space we like adding. Dips to date have been shallow and must be factored into entry levels.
• Japan and Taiwan have both shown impulsive rally structures as has India’s Nifty (a bit tired amid overbought readings).
• An SPX bull turn will be used as a long trigger for the Nikkei and Taiwan (Asia). Late June cycle peak approaching.

• MQG is seeing far higher NPL growth than traditional bank peers
• Funding costs pressure are far higher and NIM contraction is substantial
• High rates for longer & greater risks of recessionary-conditions can weight more on MQG

• The Tender Offer by SBI Holdings (8473 JP) to take private SBI Shinsei Bank (8303 JP) is almost done. The tender closes on 23 June. 
• The stock has not traded below theTOB Price since the announcement. People have built positions. Expect minimal liquidity from here on out. I expect a somewhat ‘weak’ result.
• Now starts a series of ‘technical’ events and deadlines which will culminate for some in delisting at end-Q3/start-Q4 and for some ends in years after an Appraisal Rights case.

• Piramal Enterprises (PIEL IN) plans to raise around US$600m via selling its entire 8.3% stake in Shriram Finance.
• The deal is very well flagged with Piramal having sold half its stake in 2019 and having publicly stated its intention to completely exit as well.
• In this note, we will run the deal through our ECM framework and comment on other deal dynamics.

• In this insight, we take a look at the potential index changes for F100 and F250 in the run up to the September 2023 Rebalance.
• I currently see one change for the F100 index and two separate changes for the F250 index.
• There are several names lurking just outside the borders and could be involved in index changes in September 2023 if there are sharp price changes.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Aberdeen Asset Management (ADN LN) plans to raise around US$500m via selling its remaining 10% stake in HDFC Asset Management Co Ltd (HDFCAMC IN). 
• We have covered one of the past deals in HDFC AMC Placement/OFS – Forced to Sell, but It’s Not the Best of Times to Be Selling or Buying.
• In this note, we will run the deal through our ECM framework and comment on other deal dynamics.

• Erstwhile Citibank India’s retail customers are high-income, high spending and demand excellent customer service
• In FY2022, as per the latest data, Axis Bank has the dubious distinction of becoming the customer complaints market leader in private sector banking
• If Axis Bank does not improve its customer service, erstwhile Citibank’s lucrative retail customers will flee to competitors

• Last week, there was a possible attempt to depeg Tether (USDT), the world’s largest stablecoin.
• The company has since claimed the destabilization was caused by manipulation ahead of a big documents release, which shed new light on the firm’s banking relationships and commercial paper exposure. 
• While the facts remain blurry, the selling started a few days before USDT dipped to as low as $.995 on both centralized and decentralized exchanges, suggesting some holders may have had advanced warning of the release. 

• UOB saw bad loans rise 22% during the GFC where DBS saw bad loans rise 146%
• During oil price collapse at FY16, DBS saw NPLs up 83%, UOB saw NPLs up 41%
• In current downturn, a market capitalization decline may be less at UOB vs DBS

• Our proposed USD bull trade from DXY 102.60 (104.80 target zone) is in jeopardy after the ECB induced Euro spike. 
• Sterling has been our top USD short and the USD/JPY a top USD long. The Euro is under scrutiny but has been capped under 1.11.
• We will be looking for further evidence of USD bearish elements. DXY below 102 would be more bearish but would be in line with a near term slide in yield.

• Human beings are engineers. Our historical narrative is marked by our constant ability to control our environment through innovative strides known as technology.
• Typically, our most significant collective progress is linked with technologies that enhance our capacity to distribute information and foster trust.
• Consider the societal transformation that occurred after the invention of the printing press. It was not just about more books – the dissemination of knowledge it facilitated catalysed the Scientific Revolution, forever altering our understanding of the world. 

• Puradelta Lestari (DMAS IJ) remains one of the most interesting industrial estate developers in Indonesia with a high-quality tenant base across growth sectors including autos, 2W, pharmaceuticals, and data centres.
• The completion of a new AEON Mall will provide a further draw for the estate as a destination and a place to live and work and is increasingly well-connected.
• DMAS had a slower start to the year for revenues but marketing sales are running ahead of schedule having beat last year, with bookings expected to pick up in 2023.

• Thai Life Insurance (TLI TB) and WHA Corp Pcl (WHA TB) will replace Jaymart PCL (JMART TB) and JMT Network Services (JMT TB) in the SET 50 Index in June.
• Estimated one-way turnover is 1.7% and will result in a one-way trade of THB 1,533m. The Financials and Real Estate sectors gain at the expense of the other sectors.
• The largest impact of passive buying will be on Thai Life Insurance (TLI TB) in terms of days of ADV to buy and in terms of free float to buy.