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In today’s briefing:
- HK Connect SOUTHBOUND Flows (To 28 June 2024); Still a Net Buy, but Less Strong. Financials Dominate
- New World Development – ESG Report – Lucror Analytics
- Target Healthcare REIT – Enhanced portfolio metrics and interest savings
- The Merchants Trust – Termination of coverage
- Crypto Crisp: A Trump Win Is A Win For Crypto
- Alpha Bank – Moody’s raise to investment grade
- Banamex Update and Mexican Banks’ April Data – First Look at Early 2Q 2024 Trends
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HK Connect SOUTHBOUND Flows (To 28 June 2024); Still a Net Buy, but Less Strong. Financials Dominate
- SOUTHBOUND was again a net buyer, for HK$9.3bn this week, on smallish two-way volumes. Banks were a big buy.
- It is not clear how much of this is H/A discounts, expected dividend tax removal, shareholder return KPIs for SOE CEOs, upcoming Third Plenum policy, or national team buying…
- But valuations are acceptable. Flows are good. Policy changes are afoot. SOUTHBOUND may continue to see inflows – national team and otherwise.
New World Development – ESG Report – Lucror Analytics
Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess New World Development’s ESG as “Strong”, in line with its Environmental score, while the Social and Governance scores are “Adequate”. Controversies are “Immaterial” and Disclosure is “Strong”.
Target Healthcare REIT – Enhanced portfolio metrics and interest savings
Target Healthcare REIT has sold four of its care homes for £44.5m to the incumbent tenant, modestly ahead of the carried value. The homes have performed well since being acquired as part of the significant portfolio transaction in late 2021, but their sale enhances key portfolio average metrics such as age, floor space and unexpired lease term, has been completed at a lower yield than the portfolio average and enables the company to reduce exposure to more expensive debt.
The Merchants Trust – Termination of coverage
Edison Investment Research is terminating coverage on Oxford Cannabinoid Technologies (OCTP), Britvic (BVIC), Ultimovacs (ULTI), DFR Gold (DFR), The Merchants Trust (MRCH), PB Holding (PBH) and Biodexa Pharmaceuticals (BDRX). 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.
Crypto Crisp: A Trump Win Is A Win For Crypto
- As we step into July, anticipation surrounds the distribution of 141,686 bitcoins from the defunct Mt. Gox exchange to its creditors, most of whom are former clients.
- Despite the looming release of these bitcoins, which have been locked away for over a decade, the crypto market saw an uptick over the weekend.
- This rise occurred even after the German government transferred an additional $94 million worth of bitcoins to exchanges this morning.
Alpha Bank – Moody’s raise to investment grade
On 27 June, Moody’s upgraded Alpha Bank’s long-term senior-unsecured debt rating by two notches to Baa3 (Ba2 previously), its long- and short-term deposit ratings by one notch to Baa3/P-3 (Ba1/NP previously) and its long- and short-term counterparty credit risk (CCR) rating by one notch to Baa2/P-2 (Baa3/P-3 previously). The move takes Moody’s key ratings on Alpha to investment grade for the first time in 14 years. This is a further positive development for Alpha as it continues to execute its strategy and demonstrate recurring profitability and capital generation. S&P, Fitch and Capital Intelligence currently assign BB- (sub-investment grade) long-term debt ratings to Alpha Bank.
Banamex Update and Mexican Banks’ April Data – First Look at Early 2Q 2024 Trends
- We review Citibank’s upcoming division of CitiBanamex and the forthcoming legacy Banamex IPO; given the market’s recent wobbles, we shave down the Banamex IPO valuation
- Sector trends to January show continued loan growth; although funding costs have not risen to April, credit costs are worsening, with some evidence of rising NPL ratios
- BanBajio generates an ROE of 27%, whilst well capitalized and on very modest multiples; we are now neutral on Banorte, from being cautious, due to its less demanding valuation