Financials

• Nearly US$100bn has flowed into mainland China listed ETFs year to date and could be driven by the National Team led by Central Huijin supporting the market.
• Nearly all the net inflows have been focused on the CSI 300, CSI 1000, CSI 500, SSE50, ChiNext and STAR50 indices. Flows to sector ETFs have been mixed.
• Over 70% of the net inflows have gone to the CSI 300 Index with another 18% going to the CSI 500 Index and CSI 1000 Index.

• June/July/August saw 1,673/825/202 new Corporate Governance Reports filed and 8/5/9 new “Mgmt Conscious of Capital Cost/Stock Price” policies filed, respectively. The TSE’s very simple tool comes in 15 days.
• Our tools show every report, links to every document, and now a new diff file tool. input a name, see the difference between the Old/New Reports. We hope it helps.
• This tool is designed to be a shelf reference. We update it once a month, and every CorpGovReport and new “Management Conscious” report updated since a CGR update is here.

• On 22 August, the Psc Insurance (PSI AU) IE considered Ardonagh’s A$6.19 offer fair and reasonable as it is within the A$5.69 to A$6.65 valuation range. 
• The offer is conditional on shareholder approval of the scheme. No disinterested shareholder holds the 25% blocking stake. The scheme meeting is on 26 September.
• The offer is attractive and represents an all-time high. At the last close and for the 11 October payment, the gross/annualised spread is 1.3%/12.1%.

• Following SEBI’s review of eligibility criteria for entry/exit of stocks in the derivatives segment, there could be 18 deletions/79 inclusions in the F&O segment over the next 6 months.
• The introduction of some stocks in the F&O segment could lead to their inclusion in the NIFTY, SENSEX, Nifty Bank and CNXIT indices and weight changes in the Nifty Next50.
• The inclusion of stocks in indices with a fixed number of constituents will result in deletion of some stocks from these indices. There should be methodology changes too.

• Back on the 8th May, PSC Insurance (PSI AU), a diversified insurance service provider, entered into a Scheme with Ardonagh Group, at A$6.19/share, in cash.
• That’s a 27.6% premium to undisturbed, and a lifetime high. Directors and key executives holding ~39.6% of shares out, are supportive. 
• The Scheme Booklet is now out, with a Scheme Meeting to be held on the 26th September. Expected implementation on the 11 October. The IE says fair & reasonable.

• In last week’s Crypto Moves #40, we highlighted that we are on the verge of a significant surge in interest toward decentralized finance, or DeFi. We believe that only a select few DeFi-focused cryptocurrencies truly have the potential to benefit from this anticipated increase in DeFi interest, as this interest is likely to translate into greater monetary rewards for their token holders.
• As we have consistently emphasized, apart from Bitcoin, we only invest in productive cryptocurrencies – those that offer monetary rewards to their token holders, much like dividends from equities.
• In some cases, we may consider investing if we are confident that the cryptocurrency in question will soon become productive.

• In a previous insight we have postulated that a pullback may be behind the corner for the Hang Seng Index (HSI INDEX).
• We said the pullback could come the week after the insight was published, or the following week (i.e. this week). Last week closed up, the index could retrace this week.
• In this insight we want to update the levels to buy LONG for this week, to benefit from a highly probable continuation of the rally in September.

China Vanke’s H1/24 results were weak in our view. Revenue from the core property development business fell meaningfully amid fewer project deliveries. In addition, the 5% gross margin from property development was weaker than that reported by peers, as Vanke likely carried out aggressive discounting to boost sales. Cash flows were weaker than expected, leading to higher net debt and leverage deterioration. Moreover, liquidity was inadequate.

We note negatively that management did not mention its debt reduction plans. Still, we view positively that the company has reiterated its strong commitment to timely repayment of public debts and ensuring no defaults occur. In addition, Vanke’s proportion of offshore debt has decreased, which could enhance the recovery value against offshore assets in the event of a restructuring. We estimate that the company’s offshore assets may cover offshore debt by 0.7x.

We do not expect Vanke to default in FY 2024, as the company is able to obtain onshore loans for refinancing. Going forward, we believe Vanke’s ability to stave off default in FY 2025 may depend on the progress of its asset sales and asset monetisation initiatives.

• Bajaj Housing Finance (BHF IN) is looking to list on the exchanges by selling INR 65.6bn of stock at a valuation rumoured to be between INR 560-590bn.
• The anchor allocations will be completed later this week, and the stock is expected to start trading on 16 September.
• Bajaj Housing Finance (BHF IN)‘s maximum float will be around 10% and that will limit inclusion to just one global index in the following 6 months. 

• Miserable economic data continues. Trade geopol is mixed. Territorial geopol getting more serious. SOUTHBOUND gross volumes up, but not high. 
• SOUTHBOUND rebounded cutting its weekly net sell streak at one. ETFs again a net sell. NORTHBOUND net data is not not released on a daily/weekly basis; only quarterly.
• As expected (with AH 20d Premia returns at multi-year highs 3wks ago), AH Premia fell slightly, narrow premia falling more than wide premia. I continue to expect more H-vs-A gains.

• Recovery in Risk-Premia was short-lived. Pressure from a lack of upcoming event-risk has driven short-dated IVs lower.
• Nifty50 at All-Time-Highs – PCR & Skew extend further towards puts. Implying active hedging of core long equity positions using OTM puts. 
• “High & Down” Vol-state persists. Expect a continued slide lower in IVs. Retain previous week’s tactical stance – allocations to Short Iron Condors & Skew Harvesting structures.   

• Edelweiss Financial Services (“Edelweiss”) continues to scale up well its asset management and insurance businesses. The credit business has been also turning around led by the co-lending model.
• In particular, the asset management business has been growing rapidly. The alternatives asset management AUM grew 17% YoY, of which fee-paying AUM grew 32% YoY.
• With all its businesses now running independently, Edelweiss is focusing on unlocking value. It already demerged Nuvama and is now close to unlock value in its Alternative Asset management business.

• 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: Midea Group Co Ltd A (000333 CH) premarketing its H Share listing, Terumo Corp (4543 JP) placement and 99 Speed Mart Retail Holdings (99SPD MK) US$530 million IPO.
• Event-Driven developments: ESR Group (1821 HK), Canvest Environmental Protection Group (1381 HK), China Traditional Chinese Medicine (570 HK), CPMC Holdings (906 HK), Shinko Electric Industries (6967 JP). 

• Bank Negara Indonesia (BBNI IJ) presented an optimistic picture from 2Q2024, with management upgrading the loan growth forecast range for the year by a notch with an improving liquidity backdrop.
• Credit costs remain low with the SME segment the only segment with lingering problems from vintage pre-2022 loans but otherwise, LAR are in decline with room to cut coverage ratios.
• BNI made a big fanfare of the launch of its brand new “wondr” banking app which is already off to a strong start with more active users. Valuations are attractive. 

• RLI Corp. reported strong financial results for the second quarter of 2024, reflecting a comprehensive picture of growth and financial stability across its various segments.
• The company, with its broad portfolio of insurance products, demonstrated robust underwriting profitability and significant net investment income growth.
• The deep dive into each segment reveals both strengths and areas with scope for vigilance.

• Globe Life Inc., in the second quarter of 2024, reported a net income of $258 million, or $2.83 per share, compared to $215 million, or $2.24 per share, a year ago—an impressive growth of around 20%.
• The net operating income also saw a notable increase to $271 million, or $2.97 per share, reflecting a 14% rise from the previous year.
• This indicates a robust improvement in profitability, underscoring the company’s operational efficiency and financial strength.

• For the month of August 2024, 10 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$56bn.
• The average premium for the new transactions announced (or first discussed) in August was ~47%. The average premium YTD is ~44%.
• This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.

• Radian Group Inc. has reported a robust set of results for the second quarter of 2024, indicating consistent progress across its primary sectors of business operations amidst a variable interest rate environment.
• The highlights of the quarter included an increase in book value per share by 12% year-over-year, reaching $29.66, and a revenue surge to $321 million.
• Additionally, the firm achieved a net income of $152 million.

• Reinsurance Group of America, Incorporated (RGA) reported robust second quarter 2024 results, delivering adjusted operating earnings of $5.48 per share, showcasing strong performance across its business lines and geographies.
• This was supported by a pipeline of robust new business activities, contributing to an adjusted operating return on equity of 15.3% for the past 12 months, surpassing intermediate-term targets.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Ryan Specialty Holdings continued its robust growth trajectory in the second quarter of 2024, achieving impressive financial results with an 18.8% year-over-year increase in total revenue to $695 million, driven by robust organic growth of 14.2%.
• This growth is underpinned by the company’s clear focus on niche market specialization and talent.
• Adjusted EBITDAC saw a considerable rise of 27.6% to $248 million, while the adjusted EBITDAC margin expanded by 240 basis points to 35.6%.

• Selective Insurance Group Inc. delivered a mixed performance in the second quarter of 2024, navigating challenges that reflect broader industry-wide issues affecting insurers.
• John Marchioni, the CEO, highlighted the company’s commitment to disciplined underwriting, pricing, and reserving practices, which remain intact despite the pressures of social inflation affecting liability lines, particularly general liability.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• The carry trade involves borrowing in lower yielding currencies like the yen and investing in higher yielding assets
• The recent unwind of the carry trade caused temporary market stress, but quickly settled down
• The actors involved in the carry trade range from speculators to institutions, making it a diverse ecosystem with varying motivations and impacts

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

• Bank Mandiri’s recent results reflect the success of the bank’s strategy to grow higher-yielding loans and its strength in corporate, commercial, and consumer loans, with micro showing slower growth.
• The bank funding base remains solid with strong CASA growth, helping it to maintain NIMs. Mandiri’s mobile banking under Livin’ continues to drive its transactional banking, loan and deposit growth.
• Bank Mandiri‘s upgrade to its loan growth projects speaks volumes about its confidence. With credit costs at less than 1% and ample liquidity, the bank is well-positioned for growth.

• Equitable Holdings’ second quarter earnings report for 2024 highlighted the company’s strategic financial performance and growth initiatives.
• Non-GAAP operating earnings reached $494 million, translating to $1.43 per share, a 23% increase year-over-year.
• Adjusted for non-recurring items, the earnings per share stood at $1.52, surpassing the annual growth target.

• F&G’s latest quarterly results showcase a robust performance with significant growth across various metrics.
• The company, under the leadership of CEO Christopher Blunt and CFO Wendy Young, has effectively implemented strategies that are yielding fruitful results, aligning with the targets set out during the Investor Day in October 2023.
• Starting with asset growth, F&G reported a substantial increase in assets under management (AUM), which stood at $61.4 billion, marking a 21% increase year-over-year.

Edison Investment Research is terminating coverage on CoinShares International (CS). 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.

• Cincinnati Financial has reported a strong performance for the second quarter of 2024, reflecting a robust financial position and sustained growth across various segments.
• The company registered a net income of $312 million, bolstered by an after-tax increase of $112 million due to the appreciation in the fair value of equity securities.
• Non-GAAP operating income also saw an uptick, rising by $13 million from the previous year to $204 million, a change attributed primarily to a $17 million increase in investment income.

• First American Financial Corporation recently disclosed its financial results for the second quarter of 2024, navigating a market fraught with challenges yet buoyed temporarily by a seasonal uplift in demand.
• The company reported a total revenue of $1.6 billion with an adjusted earnings per diluted share of $1.27.
• The title segment, a primary revenue generator for the company, saw an adjusted pretax margin of 11.9%, a slight decrease from the previous year’s 12.6%.

• American Financial Group delivered a mixed performance in their second quarter of 2024, reflecting strength in several areas alongside areas of strategic pullback.
• The company reported an 18.5% annualized core operating return on equity, denoting a robust utilization of equity in achieving profits.
• Their specialty property and casualty (P&C) businesses continued to show strength with underwriting margins outperforming expectations due to higher rates, driving a 15% year-over-year increase in P&C net investment income excluding alternatives.

• Manulife Financial recently held its second-quarter 2024 earnings call to review its financial and operating results.
• The material focused on the company’s strategic updates, recent accomplishments, and future directions.
• Positively, Manulife Financial showcased a transition from a high-risk, low Return on Equity (ROE) entity in 2017 to a lower-risk, high ROE company today.

• Allstate Corporation reported its second quarter 2024 results with varied performance aspects.
• The company recorded a net income of $301 million and an adjusted net income of $429 million, or $1.61 per diluted share.
• Revenues increased to $15.7 billion, reflecting higher property-liability earned premiums primarily from rate increases in auto and homeowners insurance, and a significant rise in net investment income, which was $712 million higher than the prior year quarter.

• This Insight focuses on lenders operating in the affordable housing space.
• Companies in focus are Aavas Financiers Ltd (AAVAS IN);  Home First Finance (HOMEFIRS IN) & Aptus Value Housing Finance India (APTUS IN). 
• Recent IPOs of Aadhar Housing Finance Ltd (1218027D IN) & India Shelter Finance (0570670D IN)  are also covered. 

• 3i is a unique publicly traded investment company with a major stake in the European retailer Action
• 3i operates differently from traditional private equity firms by investing its own balance sheet funds
• 3i has a complex history dating back to pre-World War II and is difficult to categorize in traditional investment vehicle terms

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

• Chubb Limited’s second-quarter earnings for the period ending June 30, 2024, revealed a robust financial performance, characterized by significant growth in premium revenue and substantial increases in both core operating and investment income.
• The insurer reported a core operating EPS of $5.38, marking a 9.3% increase from the previous year.
• This was supported by a growth in net premiums of 11.8% (or 12.3% on a constant dollar basis) facilitated by a diversified portfolio across geographical regions and business segments.

CoinShares International (CS) redovisade en stark justerad EBITDA under Q224 på 26,6 miljoner pund (jämfört med 11,4 miljoner pund under Q223), vilket inkluderade två engångsfaktorer: den fullständiga nedskrivningen på 21,8 miljoner pund av innehavet i FlowBank och en återföring av nedskrivningen på 28,8 miljoner pund, efter den framgångsrika försäljningen av CS FTX-fordran. Ledningen betonade att CS-verksamheten inte på något sätt har störts av den senaste tidens turbulens på finansmarknaderna (inklusive marknaden för digitala tillgångar). CS betalade nyligen ut de två första delarna av sin utdelning på 9,3 miljoner pund (0,13 pund per aktie) från FY23-resultatet, där helårsbetalningen nu innebär en direktavkastning på ca 2,6 %. Dessutom deklarerade de en särskild utdelning på 31,4 miljoner dollar (ca 24,3 miljoner pund), vilket motsvarar 86 % av den ersättning som de fick för FTX-kravet, som ska betalas ut i oktober 2024.

• Huafa Property (982 HK) shareholders overwhelmingly approved (99.52% [of shares present and/or via proxy] FOR; 0.48% AGAINST) the Scheme yesterday. This part was expected. The headcount test was less certain.
• The final headcount tally, on a look-through basis into HKSCC Nominees by CCASS Participants, was 111 FOR, 14 AGAINST. Again, a pretty clear pass.
• Normally a Scheme Vote, if approved, wouldn’t warrant a full note. But when the headcount test is involved, it is worthwhile understanding the mechanics.

• Niva Bupa Health Insurance (1226871D IN) is looking to raise US$360m from its upcoming India IPO. The IPO will consist of both primary and secondary shares.
• Niva Bupa Health Insurance (Niva Bupa) is a health insurance firm. Its portfolio consists of health (including retail and group), personal accident, and travel insurance.
• In this note, we look at the firm’s past performance.

• Woori Financial’s value-up plan centers on improving the CET1 ratio to boost shareholder returns, with the total return ratio directly tied to the CET1 ratio.
• The market believed that if the acquisition cost stayed under ₩1.9 trillion, the CET1 ratio impact would be minimal, potentially leading to mid-term gains from non-banking profits.
• Though this may hurt Tongyang Life’s short-term stock, it opened the door for local institutional investors, especially NPS, to consider Woori Financial for value-up investments.

• We stick with Bradesco as the key pick in big-cap Brazilian and LatAm banks, for its earnings recovery prospects; the very low PEG and PBV ratio reflect its re-rating potential
• NuBank is a digital bank success story, but one that we see has challenges in terms of credit quality and it has potential capital constraints given its fast loan growth
• We are neutral on Itaú and Banco do Brasil; Itaú seems to be fairly valued whilst Banco do Brasil is optically attractive, but it is more exposed to political risk

• Powell’s Pivot: A New Era for Crypto Markets as Interest Rates Shift. Discover how the Fed’s changing stance may ignite new demand in the crypto market.
• BTC’s Rally: Can It Sustain Its Momentum Amidst Shifting Economic Policies? Explore the critical market movements and the implications of BTC’s recent surge.
• Stablecoin Growth: The Catalyst for the Next Crypto Boom? Understand the vital role of stablecoins and credit in the future of crypto market growth.

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.

• Anton Oilfield
• Meituan
• Yuexiu Property

• Ahead of Huafa Property Services Group (982 HK)‘s Scheme Meeting tomorrow, the 28th August, 42.57% of shares outstanding moved out of CCASS on the 8th July.
• One argument for Huafa trading wide-ish to terms is due to “suspicious” CCASS moves between the Offer announcement and the vote. 
• Some investors even cite the Golden Throat Holdings (6896 HK) debacle. This is not a Golden Throat situation. Not even close. It is decidedly less interesting and benign.

• The review period for the September rebalance ends on 30 August. We do not see any constituent changes for the index but there will be capping changes.
• Home Consortium Ltd (HMC AU) is just outside inclusion zone at the moment and outperformance over the rest of the week could result in inclusion.
• Home Consortium Ltd (HMC AU)‘s inclusion and capping changes will result in a one-way turnover of 5% and in a round-trip trade of A$62m. 

• Over the weekend, both Bitcoin and Ethereum reached their highest levels since the crash three weeks ago.
• As we have emphasized repeatedly in recent weeks, we continue to anticipate a gradual yet steady recovery of the crypto market, with prices to return to their pre-crash levels over the next month.
• Now, let us dive into this week’s top news.

• Bajaj Housing Finance (BHF IN) is looking to raise around US$830m in its upcoming India IPO.
• BHF is a non-deposit taking housing finance company engaged in mortgage lending since FY18. Its mortgage products include home loans, loans against property, lease rental discounting and developer financing.
• We have looked at the company’s past performance and undertaken a peer comparison in our earlier notes. In this note we talk about valuations.

• The Nikkei 225 INDEX has rebounded strongly in the past 2 weeks, there is a chance that it starts to pull back this week.
• This insight will try to evaluate what support levels could be good to buy, assuming the index resumes its uptrend after the pullback.
• The index could fall for 1 or 2 weeks, the current pullback pattern is bullish (i.e. buy-the-dip).

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.

• AAC Technologies Holdings
• China Jinmao Holdings
• Greentown China
• JSW Infrastructure
• Citicore Renewable Energy

• We continue to believe TRC has an opportunity to strengthen its management team and improve its interaction with public shareholders with the upcoming retirement of the CEO and search for his replacement.
• The new CEO should steer the company on a path that creates sustainable value for shareholders.
• We believe the 2023 appointment of Brett Brown as TRC’s new CFO added strength to the C-suite and see another opportunity for the company to improve the senior management team.

• A state-owned Offeror pitching a lifetime high Offer Price – with a solid premium –  for an illiquid company? Sounds like a slam dunk.
• Yet  property manager Huafa Property Services Group (982 HK) has perennially traded wide to Huafa Industrial Co., Ltd. Zhuhai (600325 CH)‘s terms. This is not justified. 
• The Scheme Meeting/SGM is tomorrow (28 August), with payment on (or before) the 30 September. Or a gross/annualised return of 4%/46%. Buy here. Then buy some more. 

• KRX plans to launch the Value-Up Index as two separate indices: the “Excellent Value-Up Index” and the “Promising Value-Up Index.”
• The universe will include 150 constituents from KOSPI 200 and KOSDAQ 150. Allocation between indices is undecided, with sector limits on number and weight confirmed.
• The key indicators (ROE, PBR, shareholder return rate) remain unchanged. The Promising Index’s weights are undisclosed, but the Excellent Index favors financial and automotive stocks.

• BFI Finance Indonesia (BFIN IJ) adopted a cautious stance to new bookings in 2Q2024 given domestic and geopolitical risks but total receivables remained steady as did credit costs.
• The company remained focused on non-dealer 4W financing, increased heavy equipment, and reduced 2W exposure, with a move towards dealer-used 4W financial and generally loans with higher value collateral. 
• BFIN maintains solid funding from banks at a lower cost than its peers and it is expected to start to move to higher-yielding assets in 2H2024. Valuations remain attractive.

• The biggest shift in FX markets is a lower range of interest rates in the US, signaling a regime shift towards Fed rate cuts.
• Dollar strength is diminishing due to lower rates and softer US inflation, impacting carry trades and high yield currencies.
• Euro-Dollar may benefit from lower yields, but its upside potential is uncertain amidst ongoing market volatility and economic uncertainty.

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

• Terrafina is an industrial REIT in Mexico with a strategic portfolio in key regions
• Nearshoring trend during COVID-19 has helped lower vacancy rates and increase asking rents for Terrafina
• Fibra Prologis intends to acquire Terrafina, attracting interest from other potential bidders as the market consolidates

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.

• Funding Circle is in the investment phase in the US, working towards profitability
• The company’s current valuation reflects a conservative and streamlined approach
• With a net tangible asset value of 65p per share compared to a stock price of 80p, investors may see 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.

Longfor Group’s H1/24 results were acceptable. Earnings declined in line with expectations, driven by lower revenue and margins in the Property Development segment. That said, earnings growth from rentals and services remained robust, with LTM profit from recurring income covering interest expense by 1.6x (FY 2023: 1.4x).

Negatively, net debt increased marginally in H1/24, even though total debt declined. Going forward, we expect the company to continue reducing debt using OCF and refinance its maturing debt using additional operating loans backed by its investment properties. Overall, we believe near-term default risk for Longfor remains low, as the company’s pipeline of new malls should continue to support its access to secured bank loans for refinancing.

Greentown’s H1/24 results were acceptable, given the above-industry sales and top-line growth. While gross profit declined, the property development gross margin was stable from FY 2023, and remained robust relative to peers. In addition, net debt was stable from FYE 2023. More importantly, the company’s access to onshore financing appears healthy, and liquidity is adequate.

The company remains active in land acquisitions and has a good quality land bank, mostly in high-tier cities in the Yangtze River Delta. Although Greentown is considered a pure-play developer (as its recurring income businesses are small), the company appears to have navigated the industry downturn well, thanks to its cautious approach towards land investments and operating efficiency to support a fast-churn model.

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.

• China Oil And Gas
• First Pacific Co

• After rumours were rekindled a week earlier, on 22 August 2024, Taishin Financial Holding (2887 TT) and Shin Kong Financial Holding (2888 TT) announced they would merge.
• The ratio is 0.6022 shares of Taishin for every share of Shin Kong putting NEWCO assets at about the level of Taiwan #3 CTBC Financial. That’s bad.
• There’s history here. LOTS of history. This would need approvals from the FSC and FTC, but CTBC is already a spoiner, and the SKFH Board Meeting was anything but clean.

• The Huafa Property Services Group (982 HK) vote on Huafa Industrial Co., Ltd. Zhuhai (600325 CH)’ HK$0.29 offer is on 28 August. However, shares trade wide ahead of the vote.
• Several readers have enquired about the unusually high spread ahead of the vote of a seemingly clean deal. The conversations raised several concerns. 
• The concerns are unwarranted, and this remains a clean deal. At the last close and for the 30 September payment, the gross/annualised spread was 5.5%/68.9%. 

• IVs have moved to new lows for the summer, breaking below the floor set through June & July. Nifty50 IVs now trading at 11.0% levels.
• Spectacular turnaround in IVs since early-August vol-spike. In spite of this, Vol Regime remains steady in its “High & Down” vol-state.  
• Nifty50 Vol surface characteristics have compressed for Monthly-expiry contracts. Smile & Skew for Quarterly contracts remain unchanged.

• A media outlet that Reports on Deals reported that the consortium will offer HK$14.50 per share, a 22.1% and 61.8% premium to the last close (HK$11.88) and undisturbed price (HK$8.96).
• While not a knockout offer, the consortium’s impending binding proposal suggests confidence that the offer price and structure would gain the support of the substantial shareholders. 
• The downside to a deal break is low as ESR’s valuation is undemanding. Its forward EV/EBITDA multiple is at a 30% discount to the median peers’ multiple.

• In line with our forecast, Canara Bank (CBK IN) will replace Bandhan Bank Ltd (BANDHAN IN) in the NSE Nifty Bank Index (NSEBANK INDEX) at the close on 27 September.
• Bandhan Bank Ltd (BANDHAN IN) will be deleted from a global index at the close on 31 August, so real float will increase a lot over the next month.
• Passive trackers will need to buy over 2 days of ADV in Canara Bank (CBK IN) and sell 1 day of ADV in Bandhan Bank Ltd (BANDHAN IN). 

• This Insight focuses on PSU owned Housing Finance companies – PNB Housing Finance Ltd (PNBHOUSI IN) , LIC Housing Finance (LICHF IN) and Can Fin Homes (CANF IN). 
• PNB Housing aims to focus on affordable housing, LIC Housing Finance is possibly struggling due to its size and a conservative risk appetite.
• Can Fin Homes exhibits some serious questions regarding its internal controls and underwriting policies.

• StoneCo has showcased a robust performance in the second quarter of 2024, aligning closely with its strategic goals for the year.
• Despite facing an evolving competitive landscape and a complex economic environment, StoneCo demonstrated commendable growth and operational efficiency across its multiple segments.
• In the payments sector, StoneCo reported impressive year-over-year growth with a 30% increase in its client base and a 25% expansion in total payment volume (TPV).