Daily Briefs

• This final guideline formalizes earlier drafts by the FSS. Though not strictly mandatory, its detailed requirements mean it functions as a de facto rule that must be followed closely.
• The new, stringent requirements are likely to eliminate common stock borrowing practices in Korea, making timely transactions difficult.
• New trading patterns and market flows may emerge when short selling resumes in April, with increased importance of borrow balance data and potential rise in counter-flow trading.

• Increased exchange rate volatility affects the ADR premium, but past patterns show that exchange rate and ADR premium directions may not always align, requiring consideration of specific contextual factors.
• If the won appreciates below the 1,300s range, overseas institutions may shift to asymmetric selling of underlying shares for foreign exchange profit, as shown by rising ADR premiums.
• We should watch for peak conditions to capture significant ADR premiums. Trading options include borrowing underlying shares for ADR conversion, even under the current short-selling ban.

• Market Volatility Signals Prolonged Consolidation: Recent market chaos suggests a period of consolidation, not immediate recovery—critical insight for strategizing in crypto markets.
• Global Liquidity Concerns Dominate Market Trends: The BoJ’s struggle with interest rates highlights how global liquidity influences both traditional and crypto markets, driving current trends.
• Spotting Market Anomalies is Crucial: Identifying anomalies in trading behavior can uncover opportunities or warn of potential risks, vital for informed decision-making in volatile times.

• After a large sell-off, similar to other major global markets, the KOSPI 200 INDEX last week rebounded and closed strongly up. In this insight we want to evaluate what’s next.
• According to our pattern models, at the moment the index is not overbought yet, so in theory the index could rise higher, this week.
• Pay attention when the index reaches the 385 price area, from there the index could start to encounter some resistance.

• The crypto market has been pretty boring lately, with low volatility and no significant movements in either direction for weeks.
• The past week’s low volatility, combined with the ongoing drop in exchange balances for Bitcoin and Ether, strengthens our view that we are in an accumulation phase.
• This suggests the market is gearing up for a move upward rather than downward.

• Hero FinCorp (HF) is looking to raise around US$438m in its upcoming India IPO.
• HF is a non-deposit taking NBFC. It offers a suite of financial products catering primarily to the retail segment and the MSME customer segment in India.
• In this note, we talk about the not-so-positive aspects of the deal.

The Biotech Growth Trust (BIOG) has two experienced managers, Geoff Hsu and Josh Golomb, at leading global healthcare specialist OrbiMed. They remain very positive on the outlook for the biotech sector, believing that industry valuations became disconnected from positive industry fundamentals during a period of elevated interest rates. BIOG’s strategy favours emerging (smaller-cap) over large-cap biotech companies, as, while aggregate risks are higher, they can be more than outweighed by superior returns. This strategy has proved successful over the longer term, but was detrimental to the trust’s performance between Q121 and Q323. Investor focus is starting to return to company fundamentals but Hsu and Golomb also believe that when the US Federal Reserve starts to cut interest rates, it should be a positive catalyst for small-cap stocks, including those of emerging biotech companies.

• H&T 1H’24 results saw pre-tax profits rise 12.5% from 1H’23 to £9.9m.
• We have identified five key ongoing business messages, four of them favourable and one unfavourable.
• The scale of the latter, though, means we have reduced our FY’24 estimates by £3m, but still forecast double-digit profit growth.

• LICHF reported weaker than expected NIM due to lower than usual recoveries, however, adjusted for it, NIM was as expected. FY25 NIM is on track as per the 2.7-2.9% guided.
• Weak growth of 4% YoY was the biggest negative surprise; however, this is just random quarterly variation rather than any structural slowdown. LICHF is expecting 10%+ YoY growth for FY25. 
• Asset quality has been improving consistently. Q1FY25 Stage-3 assets declined to 3.30% vs 4.96% YoY and 3.31% QoQ. Stage-2 assets declined to 4.06% vs 5.74% YoY and 4.20% QoQ.

Foxtons Group’s H1 results clearly highlight the success of the strategy the company embarked on at the start of last year. Although there is still work to be done, significant progress has been made and it now appears likely that the medium-term target of reaching operating profit in the range of £25–30m can be achieved. Although we have maintained our existing forecasts and valuation, we believe the risks appear to be to the upside, considering that the underlying macroeconomic data appear to be supportive; something that has been lacking for some time.