Category

Daily Briefs

Aug 05
0

Daily Brief Energy/Materials: CPMC Holdings, Copper and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • CPMC Holdings (906.HK) Privatization Update- Due to Risk Behind ORG’s Offer, Baosteel Is a Wiser Bet
  • Copper Tracker August 5th, 2024: Physical/​Equity Screens And Trades, Positive Signs For Copper

CPMC Holdings (906.HK) Privatization Update- Due to Risk Behind ORG’s Offer, Baosteel Is a Wiser Bet

By Xinyao (Criss) Wang

  • Baosteel’s choice to maintain its original Offer may partly reflect its “confidence” in the deal. If investors bet that Huarui Offer will succeed, they need to bear some risks.
  • If investors choose to arbitrage at HK$7.21/share, annualized return is 9% assuming privatization would be completed in mid-Jan 2025.Such return may not be attractive considering the uncertainties behind the deal. 
  • If investors are optimistic about Baosteel’s final acquisition of CPMC, they can consider buying Baosteel shares, as Baosteel will become the new industry leader, with greater upside potential for valuation.

Copper Tracker August 5th, 2024: Physical/​Equity Screens And Trades, Positive Signs For Copper

By Sameer Taneja

  • Copper declined below the 9,000 USD/ton levels (WoW by -0.5%) due to weakness in financial markets caused by the Federal Reserve’s slowness in cutting rates. 
  • Positive signs for copper were the Yangshan Copper Premium inflecting into positive territory and combined inventory on all exchanges being drawn down by almost 5%. 
  • Lundin Mining (LUN CN) and BHP Group Ltd (BHP AU) will acquire Filo (FIL CN) for 4.1 bn CAD and develop the Josemaria project in Argentina. 

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Aug 05
0

Daily Brief Health Care: Chongqing Taiji Industry (Group) A, Shanghai Henlius Biotech and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • China Healthcare Weekly (Aug.4)- Taiji Group & China TCM, TCM Formula Granules VBP, Keymed’s Trouble
  • Merger Arb Mondays (05 Aug) – Henlius, Asia Cement, Canvest, GA Pack, CPMC, A8, Fancl

China Healthcare Weekly (Aug.4)- Taiji Group & China TCM, TCM Formula Granules VBP, Keymed’s Trouble

By Xinyao (Criss) Wang

  • TCM formula granules VBP would cause some disturbance to related enterprises’ performance, but the substitution of TCM formula granules for TCM decoction pieces is a trend, indicating long-term optimistic growth.
  • Keymed’s CM310 would probably miss the NRDL negotiation this year, which will put the Company in passive situation. Based on competitive landscape, we are worried about the performance of Keymed.
  • Unsatisfactory performance of Taiji’s shares is related to concerns on China TCM’s privatization/24H1 results.However, even without the integration with China TCM, Taiji’s market value should be more than RMB20 billion.

Merger Arb Mondays (05 Aug) – Henlius, Asia Cement, Canvest, GA Pack, CPMC, A8, Fancl

By Arun George

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Aug 05
0

Daily Brief TMT/Internet: Shinko Electric Industries, Samsung Electronics Pref Shares, Nuvoton Technology, Taiwan Semiconductor (TSMC) – ADR, Black Sesame Technologies, United Microelectron Sp Adr, Microsoft Corp, Intel Corp, Daiwabo Holdings and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Update: Shinko Electric (6967) Shorter-Dated and Break Risk Small but GAP RISK Now Much Higher
  • Local Market Observations on Timing Samsung Electronics 1P Discount Narrowing
  • Yuanta/​P-Shares Taiwan Div+ ETF Rebalance Preview: Nuvoton Deletion & Positioning
  • Taiwan Dual-Listings Monitor: TSMC and ASE Premiums Break Down Again; ASE Spread Near 1-Year Lows
  • Black Sesame IPO – Paying Up-Front for Its Monetization Potential
  • Taiwan Tech Weekly: Tough Start for Nvidia and Apple Supply Chains; Asustek, Novatek Results Ahead
  • UMC Signals Non-AI Industry Inventory Correction Through 2024E; Why Intel Is Increasingly Important
  • Microsoft’s Strong Q2: Solid Revenue and Earnings Growth Despite Cloud Concerns
  • Intel’s Market Meltdown: Analyzing the Struggles of a Semiconductor Leader
  • Daiwabo Holdings (3107 JP): Q1 FY03/25 flash update

Update: Shinko Electric (6967) Shorter-Dated and Break Risk Small but GAP RISK Now Much Higher

By Travis Lundy

  • When this deal was announced, it was light. But the timing, JSR influence, large-ish float, ensured FUD would make this trade wide. It traded wider.
  • Nearly 7mos ago, Shinko had much-underperformed peer Ibiden, meaning downside gap risk from undisturbed was negative as spreads were wide. I reco’d a buy. Then 5mos ago, recommended taking profits.
  • Ibiden has now underperformed Shinko by 25+% in 2-plus weeks. GAP RISK is higher but this is a short-timer. HUGE yield to “expected” start date, so everyone assumes a delay. 

Local Market Observations on Timing Samsung Electronics 1P Discount Narrowing

By Sanghyun Park

  • Local traders see interest rate cuts and value-up disclosures as key for timing Samsung Electronics 1P discount narrowing.
  • Samsung’s only realistic value-up goal beyond 50% FCF return is improving ROE, likely through a pref-skewed buyback or cancellation program.
  • If Samsung announces a value-up plan during the Bank of Korea’s rate cuts, local traders expect the 1P discount to reverse, targeting October-November for position entry.

Yuanta/​P-Shares Taiwan Div+ ETF Rebalance Preview: Nuvoton Deletion & Positioning

By Brian Freitas

  • Nuvoton Technology (4919 TT) should be deleted from the Yuanta/​P-Shares Taiwan Dividend Plus ETF in September and that will trigger selling of over 4 days of ADV.
  • Nuvoton Technology (4919 TT) has underperformed most of its peers since the start of the calendar year and shorts have started to increase in the stock.
  • Positioning appears light and the recent deletion from an index has increased the real float of the stock. Recent semiconductor weakness could further pressure the stock.

Taiwan Dual-Listings Monitor: TSMC and ASE Premiums Break Down Again; ASE Spread Near 1-Year Lows

By Vincent Fernando, CFA

  • TSMC: Premium Breaks Back Down to +8.3%; 5-15% Could Now Be the Key Range
  • UMC: -2.2% Discount; Good Level to Go Long the Premium
  • ASE: Premium Breaks Down Again, Now Only +1.5%; Consider Going Long

Black Sesame IPO – Paying Up-Front for Its Monetization Potential

By Clarence Chu

  • Black Sesame Technologies (BLACKSES HK) is looking to raise US$143m in its Hong Kong IPO.
  • Black Sesame International Holdings (BSIH) is an automotive-grade computing SoC and SoC-based intelligent vehicle solution provider.
  • In our earlier notes, we looked at the past performance of the deal. In this note, we discuss peers and share our thoughts on valuation.

Taiwan Tech Weekly: Tough Start for Nvidia and Apple Supply Chains; Asustek, Novatek Results Ahead

By Vincent Fernando, CFA

  • Tough Start to the Week — Negative News for Nvidia and Apple Supply Chains
  • Key Events: Asustek & Novatek Results; Mediatek & TSMC July Sales Data
  • UMC Signals Non-AI Industry Inventory Correction Through 2024E; Why Intel Is Increasingly Important 

UMC Signals Non-AI Industry Inventory Correction Through 2024E; Why Intel Is Increasingly Important

By Vincent Fernando, CFA

  • UMC’s latest results indicate a mild recovery for consumer, communications, and computing industries. UMC’s capacity utilization to continue improving but industry inventory correction could last until end-2024E.
  • UMC maintained 2024E capex guidance however it’s increasingly clear UMC can’t keep up the capex arms race alone. Hence we see UMC & Intel becoming closer and closer partners.
  • We continue to view UMC as a long-term accumulate, and rate the stock as Structural Long, this however requires a longer than usual multi-year holding period.

Microsoft’s Strong Q2: Solid Revenue and Earnings Growth Despite Cloud Concerns

By Uttkarsh Kohli

  • Q2 revenue of $64.73 billion and EPS of $2.95 surpassed expectations of $64.39 billion and $2.93, respectively. Intelligent Cloud revenue reached $28.52 billion but below analysts’ $28.68 billion expectation. 
  • Activision acquisition boosted revenue by 3 points but cut EPS by $0.06 due to lower operating income.
  • While Microsoft’s core cloud business slowed, it increased capex significantly. Uncertain GenAI monetization might shift wealth from Microsoft shareholders to Nvidia shareholders.

Intel’s Market Meltdown: Analyzing the Struggles of a Semiconductor Leader

By Baptista Research

  • In a shocking turn of events, Intel Corporation, a long-standing leader in the semiconductor industry, witnessed one of its worst days on Wall Street, losing over a quarter of its market value in a single trading session.
  • The drastic drop followed the company’s announcement of a $1.6 billion net loss for the second quarter of 2024, a stark contrast to the $1.47 billion profit reported in the same period the previous year.
  • Intel’s share price plummeted by 27%, marking its steepest decline since 1974, as the company grappled with disappointing earnings, a bleak forecast, and a massive restructuring plan.

Daiwabo Holdings (3107 JP): Q1 FY03/25 flash update

By Shared Research

  • Revenue for FY03/22 was JPY227.8bn (+8.8% YoY), with IT Infrastructure Distribution segment revenue rising 17.4% YoY.
  • Operating profit for FY03/22 was JPY4.3bn (-13.4% YoY), with a temporary drop in profit margin due to competition.
  • Daiwabo Holdings’ FY03/25 forecast includes revenue of JPY1.0tn (+4.6% YoY) and net income of JPY21.8bn (+409.0% YoY).

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Aug 05
0

Daily Brief Financials: MS&AD Insurance, NIFTY Index and more

By | Daily Briefs, Financials

In today’s briefing:

  • Japan CorpGovReport Details: TSE “Mgmt Conscious of Capital Cost/Stock Price” Details (Aug24)
  • EQD / NSE Vol Update / Coffee Boost for Sleepy Vol Mkts as Risk Sentiment Sours into the Weekend

Japan CorpGovReport Details: TSE “Mgmt Conscious of Capital Cost/Stock Price” Details (Aug24)

By Travis Lundy

  • July saw 825 new Corporate Governance Reports filed and 8 new “Mgmt Conscious of Capital Cost/Stock Price” policies filed. June saw 1,673 and 5, respectively. That’s 2500 cos.
  • We created a tool show every report, provide links to every document, and now a new diff file tool. Put in a name, see the difference between the Old/New Reports.
  • We hope this tool will help. It is designed to be a shelf reference. We update the tool once a month, a couple of weeks ahead of the TSE.

EQD / NSE Vol Update / Coffee Boost for Sleepy Vol Mkts as Risk Sentiment Sours into the Weekend

By Sankalp Singh

  • Implied Volatilities (IVs) fell post-FOMC, but reversed course as market sentiment worsened late -week. IV-jump expected as Indian markets catch up to Friday’s U.S. price action 
  • Vol-Regime Model still in a “High & Down” vol state. Will switch if large IV change on the open. Short Vega & Risk-Reversal positions will need to be reevaluated. 
  • Low PCR, OI call bias & Skew compression: All point to unguarded downside in Nifty50. Next stop 24000.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Aug 05
0

Daily Brief Consumer: Sumitomo Forestry, KT&G Corporation, Ola Electric, BrainBees Solutions, Archer Daniels Midland Co, Dairy Farm International Holdings, TSE Tokyo Price Index TOPIX, New Wave Group Ab, Ferrari N.V., Corn Active Contract and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Sumitomo Forestry (1911 JP): Selloff Provides Entry for Potential Index Inclusion
  • KT&G: A Strong Candidate for Outperformance Amid Increased Signs of Market Fears
  • ECM Weekly (5th Aug 2024) – Ola Electric, Brainbees, WeRide, Sanil, CR Beverages, Carote, Fortescue
  • Brainbees Solutions (FirstCry) IPO: Valuation Insights
  • [Q2 Earnings Review] ADM Falls Short of Expectations on Weak Results in AS&O & Nutrition Businesses
  • DFI Retail (DFI SP): 1H2024.Pivoting to Profitable Growth with RTE Foods
  • Sustainability Has Many Companies Confused About Linking Financial and Non-Financial Information
  • New Wave – Vaulting to Glory?
  • Ferrari (RACE US) Q2 2024: Margin Uptrend Continues, No Demand Weakness
  • [CB 30/2024] Corn & Soy Tumble on Improving Weather; Chinese Demand Likely to Support Soy

Sumitomo Forestry (1911 JP): Selloff Provides Entry for Potential Index Inclusion

By Brian Freitas

  • Sumitomo Forestry (1911 JP) is a potential inclusion to a global index at the August rebalance. If added, passive trackers will need to buy over 6x ADV.
  • Sumitomo Forestry (1911 JP) has traded lower on risk-off sentiment and further downside provides an entry point that could pay off if the stock is added to the index.
  • Sumitomo Forestry (1911 JP) has outperformed its peers but trades at similar valuations to some stocks. A long/short trade could protect the downside.

KT&G: A Strong Candidate for Outperformance Amid Increased Signs of Market Fears

By Douglas Kim

  • In this insight, we provide an update of KT&G Corporation (033780 KS) which is a strong candidate for outperformance amid increased signs of market fears. 
  • We continue to believe that there is an increasing probability of cigarette price hikes in Korea in 2H24. Last time that KT&G hiked its cigarette prices was in January 2015.
  • The company’s shareholder return policy is to provide cash dividends of 1.8 trillion won and share buyback/cancellations worth 1 trillion won from 2024 to 2026. 

ECM Weekly (5th Aug 2024) – Ola Electric, Brainbees, WeRide, Sanil, CR Beverages, Carote, Fortescue

By Sumeet Singh

Brainbees Solutions (FirstCry) IPO: Valuation Insights

By Arun George

[Q2 Earnings Review] ADM Falls Short of Expectations on Weak Results in AS&O & Nutrition Businesses

By Srinidhi Raghavendra

  • ADM’s Q2 results underperformed analyst expectations with both EPS and revenue missing analyst estimates.
  • Operating profit declined for Ag Services & Oilseeds (ASO) and Nutrition, while Carbohydrate Solutions saw an uptick, driven by margin and volume expansion in Starches and Sweeteners.
  • ADM expects weak Q3 for AS&O and Carbohydrate Solutions, with improvements expected in H2 2024. Nutrition is expected to perform strongly due to cost efficiency and volume expansion.

DFI Retail (DFI SP): 1H2024.Pivoting to Profitable Growth with RTE Foods

By Devi Subhakesan

  • Strong recovery in 1H2024 profit growth YoY was driven by margin improvements in the food and convenience segments.
  • Double-Digit sales growth in the Ready-to-Eat (RTE) foods segment boosted margins, offsetting reduced cigarette volumes from last year’s tax increases in Hong Kong.
  • While weak consumer confidence in North Asia impacted sales, good growth in the expanding Southeast Asia business provided a positive offset.

Sustainability Has Many Companies Confused About Linking Financial and Non-Financial Information

By Aki Matsumoto

  • Sustainable management should be considered in the sustainable expansion of corporate value, including shareholders’ interest, and non-financial information should provide direction based on information that isn’t feasible, including financial information.
  • Starting with appointing people who are diverse in nationality and gender to the board of directors will lead to discussing management issues with diverse opinions.
  • Significant differences exist between those companies that have improved their efforts to improve board practices and capital profitability and achieved results, and those that have only formally put board practices.

New Wave – Vaulting to Glory?

By Investment Talk

  • After a warm-up week of swimming, rowing and archery, the Olympics now kicks into top gear with the athletics.
  • Among the hottest of track and field gold medal prospects is Armand ‘Mondo’ Duplantis of Sweden.
  • On Monday evening, the 24-year-old will contest the men’s pole vault final as the defending champion from Tokyo. 

Ferrari (RACE US) Q2 2024: Margin Uptrend Continues, No Demand Weakness

By Sameer Taneja

  • Ferrari N.V. (RACE US) reported another strong Q2 2024, with revenues up 16% and profits up 25% YoY. EBITDA margins expanded to 39% due to pricing/personalization(20%). 
  • The company raised its guidance on revenue/EPS by 2.3%/5%, flagging Q3 would be weak as it transitions to its new ERP, but we believe the company is being conservative. 
  • Trading at 48.7x FY24e, the stock seems a tad expensive, but it’s up 28% YTD because of upgrades, which we believe will continue. 

[CB 30/2024] Corn & Soy Tumble on Improving Weather; Chinese Demand Likely to Support Soy

By Srinidhi Raghavendra

  • North Dakota accounts for 51% of total US spring wheat production. The region’s projected 2024 crop yield 15% higher YoY at an average of 54.5 bushels per acre.
  • Large old-crop corn inventories record yield of 183-185 bpa collectively dragging corn prices down.
  • Wheat vols rebounded last week after falling the prior week. Prices face uncertainty as strong exports, lower production in EU & China provides support against massive US harvest.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Aug 04
0

Daily Brief ECM: Weekly Deals Digest (04 Aug) – Ola and more

By | Daily Briefs, ECM

In today’s briefing:

  • Weekly Deals Digest (04 Aug) – Ola, Brainbees, A8, Asia Cement, CPMC, Fancl, Sun Corp, Heiwa

Weekly Deals Digest (04 Aug) – Ola, Brainbees, A8, Asia Cement, CPMC, Fancl, Sun Corp, Heiwa

By Arun George

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Aug 04
0

Daily Brief Thematic (Sector/Industry): Japan Weekly | BOJ Surprises; Lots of Results and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Japan Weekly | BOJ Surprises; Lots of Results

Japan Weekly | BOJ Surprises; Lots of Results

By Mark Chadwick

  • The Bank of Japan’s decision to raise the overnight rate to 0.25% significantly impacted financial markets this week
  • The Federal Reserve’s decision to keep rates unchanged fueled concerns that it might be lagging in rate cuts.
  • Advantest’s share price surged 15% this week due to a positive outlook and strong Q1 results

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Aug 04
0

Daily Brief Equity Bottom-Up: Otsuka Holdings (4578 JP): H1 Revenue Rises 17% on Rexulti; Picks Up Jnana Therapeutics for $800M and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Otsuka Holdings (4578 JP): H1 Revenue Rises 17% on Rexulti; Picks Up Jnana Therapeutics for $800M
  • [Earnings Review] BP Surges Past Profit Estimates on Soaring Oil Prices and Robust Retail Earnings

Otsuka Holdings (4578 JP): H1 Revenue Rises 17% on Rexulti; Picks Up Jnana Therapeutics for $800M

By Tina Banerjee

  • During 1H24 Otsuka Holdings (4578 JP) reported 18% YoY growth in revenue from pharmaceuticals segment to ¥767B, mainly driven by a 27% YoY growth in Rexulti revenue to ¥122B.
  • The company has revised upward 2024 revenue and business profit, while reduced 2024 operating and net profit guidance due to the recording of an impairment loss.
  • Otsuka is acquiring Jnana Therapeutics for $800M. The transaction includes JNT-517, a potential first-in-class oral treatment for Phenylketonuria, a rare inherited metabolic disorder. The acquisition will close in 3Q24.

[Earnings Review] BP Surges Past Profit Estimates on Soaring Oil Prices and Robust Retail Earnings

By Suhas Reddy

  • BP’s operating revenue declined by 2.55% YoY, falling short of estimates by 9.78%, while underlying net profit increased by 6.45% YoY, exceeding EPS estimates by 8.75%.
  • Strong performance from the Oil Production & Operations and Customers & Products segments drove underlying net profit growth.
  • BP announced a 10% increase in its interim dividend to 8 cents/share and completed USD 1.75 billion in share buybacks in Q2.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Aug 04
0

Daily Brief Event-Driven: (Mostly) Asia-Pac M&A:Ansarada and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • (Mostly) Asia-Pac M&A:Ansarada, Southern Cross Gold, A8 New Media, CPMC, Mandala Multifinance, Fancl
  • HK Connect SOUTHBOUND Flows (To 2 Aug 2024); ETFs Get Sold; Tencent, SOEs, Utilities Bought
  • A/H Premium Tracker (To 2 Aug 2024): Policy Commentary Supports Consumers, AH Premia Drifting Wider
  • Asia Cement China (743 HK): Scheme Vote on 26 August Has a High Deal Break Risk
  • Asia Cement (743 HK): 26th August Vote. Shareholders Should Reject Terms
  • Last Week in Event SPACE: Rio Tinto, Ryohin Keikaku/Fast Retailing, WH Group, ThaiBev/F&N, PCCW
  • Mainland Connect NORTHBOUND Flows (To 2 Aug 2024): Small Net Positive Week But…

(Mostly) Asia-Pac M&A:Ansarada, Southern Cross Gold, A8 New Media, CPMC, Mandala Multifinance, Fancl

By David Blennerhassett

HK Connect SOUTHBOUND Flows (To 2 Aug 2024); ETFs Get Sold; Tencent, SOEs, Utilities Bought

By Travis Lundy

  • SOUTHBOUND was again a net buyer, for HK$9.2bn this week (now 26wks in a row of net buying), on smallish two-way volumes.
  • I’ve thought national team was buying banks for months. They were gone for a couple of weeks. Feels like they are back. 
  • There were three ETFs in the top five SOUTHBOUND sells this past week, reversing last week. Energy, Utilities, Telecoms bought. 

A/H Premium Tracker (To 2 Aug 2024): Policy Commentary Supports Consumers, AH Premia Drifting Wider

By Travis Lundy

  • The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
  • SOUTHBOUND inflow strong. SOEs, Tencent, and Xiaomi leading. NORTHBOUND down four of five days this week, but net inflows on the week. Consumer discretionary bad.
  • Hs underperformed As again. 20d AH Premia performance is at the top of its multi-year range. I’d expect AH Premia to decline the next couple of weeks.

Asia Cement China (743 HK): Scheme Vote on 26 August Has a High Deal Break Risk

By Arun George

  • Asia Cement China (743 HK)’s IFA opines that Asia Cement (1102 TT)’s HK$3.22 privatisation offer is fair and reasonable. The scheme vote is on 26 August. 
  • The IFA valiantly justifies that an offer materially below net cash is fair and reasonable. The crux of the justification lies in the fortuitous disclosure of material capex requirements.
  • While no shareholder holds the 10% blocking stake, the high AGM minority participation rates, retail opposition and unconvincing IFA report suggest a high chance of a deal break.

Asia Cement (743 HK): 26th August Vote. Shareholders Should Reject Terms

By David Blennerhassett

  • Back on the 5th June, Chinese cement play Asia Cement China (743 HK) announced a rubbish HK$3.22/share Offer from its parent Asia Cement (1102 TT).
  • This best & final cash Offer was a ~ 45% premium to undisturbed, and a 37% discount to FY23’s net cash. It’s a 39% discount to 1H24’s net cash.
  • The Scheme Doc is now out, with a 26th August independent shareholder vote. And payment (if it were to occur) on 20th September. The IFA (unsurprisingly) says fair and reasonable. 

Last Week in Event SPACE: Rio Tinto, Ryohin Keikaku/Fast Retailing, WH Group, ThaiBev/F&N, PCCW

By David Blennerhassett

  • At a time when the LSE has dumbed down the checks and balances for listed companies, now may be the right time to consider collapsing Rio Tinto (RIO AU)‘s DLC.
  • Re: Sep24 Nikkei 225 Rebal, long Ryohin Keikaku (7453 JP) vs. Fast Retailing (9983 JP), but this may not last. It has worked very well. 
  • Unless we see a significant (and sustainable) reversal in WH Group (288 HK)‘s US/Mexican ops in the interim results, now hardly appears the opportune time for a Smithfield IPO.

Mainland Connect NORTHBOUND Flows (To 2 Aug 2024): Small Net Positive Week But…

By Travis Lundy

  • The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
  • Last week saw NORTHBOUND net BUY RMB 3.2bn of A-shares. Wednesday was a BIG buy day. Every other day was a net sell. 
  • HK and Mainland large caps generally performed equally, down but much better than the rest of the world, but Hs in H/A pairs underperformed.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Aug 04
0

Daily Brief Macro: Heard From Fortress Hill: Weekly Market Observations (2 Aug 2024) and more

By | Daily Briefs, Macro

In today’s briefing:

  • Heard From Fortress Hill: Weekly Market Observations (2 Aug 2024)
  • US July Job Reports: Shifting Away to Services Sector

Heard From Fortress Hill: Weekly Market Observations (2 Aug 2024)

By Alex Ng

  • The FED FOMC ended on Thursday and most analysts predict two to three rate cuts this year, while we forecast there will only be an one off rate cut.
  • Our forecast already incorporate the nil prediction we were aiming at earlier, since the FOMC members have leaked their intents towards more rate cut.
  • But we are still affirmative that there will only be a one-off rate cut this September, as various currencies like JPY have rebounded visibly.

US July Job Reports: Shifting Away to Services Sector

By Alex Ng

  • Employers added just 114,000 jobs in July — 35% fewer than expected — and unemployment, now at 4.3%, is the highest since October 2021, the Labor Department reported Friday.
  • Hourly wages rose just 3.6% from July 2023, the smallest year-over-year gain since May 2021, and another sign that inflation could be heading closer to the Fed’s target.
  • July job gains were concentrated in healthcare and social assistance firms, which added 64,000 jobs last month, accounting for 56% of hiring. Restaurants, hotels and bars added nearly 26,000 jobs.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free