Singapore

• Mapletree Commercial Trust (MCT SP)’s EGM, Mapletree North Asia Commercial Trust (MAGIC SP)/MNACT’s EGM and trust scheme meeting will take place on 23 May. The effective date is 8 August.
• The IFA considers the scheme consideration to be fair. We think that IFA’s valuation approach is broadly sound with some areas for improvement. 
• For a 17 August payment, the gross and annualised spread of the cash-only consideration (including permitted clean-up DPU) is 1.6% and 5.6%, respectively. 

• Since March we have consistently said we believe any bottoming process would likely take weeks or months and could come with more tests of the lows, or even an undercut.
• We are testing the March lows now in several global indexes, including the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US).
• While this is a logical spot for a bounce, we see rallies as selling opportunities at the index level

• For the month of April, 10 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$22bn.
• The average premium for the new deals announced (or first discussed) in April was ~36%.
• This compares to the average premium for all deals in 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 33%, 31%, and 31.5% respectively.

• Keppel (KEP SP) and Sembcorp (SMM SP) have announced the O&M business combination and it is a little more interesting than expected. It is a Very Big Desirable Order Book.
• Razer Inc (1337 HK)was trading at a 8% gross spread to terms a day before the vote, on headcount test concerns. But it was even close. 
• KKR and Hitachi Ltd (6501 JP) have a deal to get KKR to buy Hitachi Transport System (9086 JP) in a VLBO (Very Leveraged BuyOut).

• The Mapletree North Asia Commercial Trust (MAGIC SP) Scheme Doc and Mapletree Commercial Trust (MCT SP) Circular are both out this morning. 
• The IFA deems the deal FAIR and REASONABLE. This is not surprising. It was already going to be so with just the scrip, but with the cash bump it’s easier.
• But the situation is complicated. And the complications have complications. The trade is still to be long MCT, and long MCT vs MNACT is an interesting idea.

• Yangzijiang Financial Holding (YZJFH SP) started to trade on the SGX today following its spin-off from Yangzijiang Shipbuilding (YZJSGD SP). YZJFH’s last price was S$0.65/share.
• The FTSE Straits Times Index (STI) (STI INDEX) currently has 31 members and the lowest ranked constituent by full market cap at the close today will be deleted.
• At current prices, Yangzijiang Financial Holding (YZJFH) will be deleted from the FTSE Straits Times Index (STI) (STI INDEX) at the close on 4 May. Comfortdelgro avoids deletion for now.

• SEA sell volumes are deteriorating into new lows with two buy tranche levels outlined to align with the RSI near 25 as the primary long trigger.
• Selling exhaustion is noted as the descending price wedge matures. Sell volumes deteriorating into new low sets up the entry.
• 102 is the key hurdle to clear with macro targets at 132 and 170. Buy probe near 70 with a higher conviction buy near 54.

• Singapore Press Holdings (SPH SP) 58% to 42% to take cash instead of cash + SPH REIT units. 
• That was to be expected, but it means Cuscaden owns 47+% of SPH REIT and needs to conduct a Conditional Chain Offer on SPH REIT at S$0.9372/unit. 
• That provides a put option under SPH REIT for holders/buyers as Singapore opens up.

• Keppel Corp and Sembcorp Marine have announced the O&M business combination and it is a little more interesting than expected. It is a Very Big Desirable Order Book.
• Separately, there is the potential for more index inclusion flow based on the conclusion of the combination in Q4.
• The light at the end of the tunnel used to be far away, and one was never sure if it wasn’t an oncoming train. It’s closer and clearer now.

• The Keppel O&M / SMM Combination and Keppel Rig Asset Restructure were announced today and the arithmetic is both tough and interesting. There’s a little magic here.
• KEP shareholders receive SMM shares worth ~1/3 of today’s share price, and the rest is currently valued at well under Net Tangible Assets post-Restructuring/Transaction.
• That suggests Keppel has upside, but one must think carefully about the exposures.

• The terms for the proposed combination of Keppel O&M and Sembcorp Marine (SMM SP) were announced. The agreed equity value exchange ratio between Keppel O&M and Sembcorp Marine is 56%:44%. 
• The proposed combination will require Keppel Corp (KEP SP) and Sembcorp Marine shareholder approvals at separate EGMs and is expected to close in 4Q2022.
• The transaction is a big win for Keppel shareholders as the proposed combination creates S$9.4 billion of value, which is around 80% of Keppel’s market cap at the last close.

• Keppel Corp and Sembcorp Marine have announced a proposed combination of Keppel O&M and Sembcorp Marine to create a global player in offshore renewables, new energy and cleaner O&M solutions.
• Keppel Corp (KEP SP) and its shareholders will own 56% of the combined entity, while Sembcorp Marine (SMM SP) shareholders will own the other 44%.
• Depending on the combined entity market cap, there could be selling from MSCI Standard and FTSE Straits Times Index (STI) (STI INDEX) trackers at the time of implementation.

For our next Corporate Webinar we are glad to welcome UOB (UOB SP) Vice President, Investor Relations, Soh Yi Da.

In the upcoming webinar, Soh Yi Da will share a short company presentation, after which the IR team will engage in a fireside chat with Smartkarma Analyst Daniel Tabbush. A live Q&A session will follow.

The Corporate Webinar will be hosted on Tuesday, 10 May 2022, 17:00 SGT.

UOB is a leading bank in Asia with a global network of more than 500 branches and offices in 19 countries and territories in Asia Pacific, Europe and North America and has grown organically and through a series of strategic acquisitions. 

UOB is rated among the world’s top banks: Aa1 by Moody’s and AA- by both S&P Global Ratings and Fitch Ratings. UOB provides a wide range of financial services globally through its three core business segments – Group Retail, Group Wholesale Banking and Global Markets.

Corporate Webinars by Smartkarma Corporate Solutions feature discussions with IROs and Executives, discussing their companies, the challenges they face, and the opportunities in their sectors and markets. 

• DiDi Global (DIDI US) had serious data problems. It still listed itself, against the wishes of the regulators. Then it got in serious hot water. And it’s been getting hotter. 
• Ramsay Health Care (RHC AU) announced an unsolicited, non-binding Offer from KKR (and HISTA), at A$88.00/share, a 36.7% premium to last close, however, earnings have been left bedridden by the pandemic.
• Post-Deal, Keppel Corp (KEP SP) will look more like Sembcorp Industries (SCI SP). More engineering, less power generation infra assets, more other infra assets and more data centres. 

• Yangzijiang Shipbuilding (YZJSGD SP) is trading ex-spinoff today and is trading at S$0.85/share versus the last close of S$1.54/share, implying a price of S$0.69/share for Yangzijiang Financial Holding Ltd (YZJFH).
• At the last prices, Yangzijiang Shipbuilding (YZJSGD SP) will remain in the FTSE Straits Times Index (STI) (STI INDEX) while Yangzijiang Financial Holding (YZJFH) will be deleted on 4 May.
• To avoid index deletion, Yangzijiang Financial Holding (YZJFH) will need to trade at S$0.825/share or higher and that would result in the deletion of Comfortdelgro Corp (CD SP). 

• 20 months ago, Temasek walked away from a deal to buy control of Keppel Corp (KEP SP) as the O&M business saw large writedowns and covid stoppage losses.
• The story? A possible Keppel O&M and Sembcorp Marine (SMM SP) merger. SMM was recapped and spun out of Sembcorp Industries (SCI SP) then recapped again. 
• Now it’s crunch time. Keppel & SMM hope to update investors on a merger plan by end of April. This insight looks at what to look out for.