In today’s briefing:
- JL Mag Rare-Earth H-Share Listing: Valuation Insights
- STAR50 Index Rebalance Preview (March 2022): What Will The Index Committee Do?
- Macro; New Bond Issues; Rating Changes; Talking Heads; Top Gainers and Losers
- Porton Pharma Solutions (300363.CH) – Not Easy to Get into the First Tier
- Morning Views Asia: Evergrande, China South City, Future Retail Ltd, Tata Motors ADR
JL Mag Rare-Earth H-Share Listing: Valuation Insights
- JL Mag Rare-Earth Co Ltd (300748 CH) is a leading producer of high-performance rare earth permanent magnets. It has launched an H-Share listing to raise $570 million at the mid-point.
- In JL Mag Rare-Earth Secondary Listing: Magnetic Moments, we stated that it has attractive fundamentals and the secondary listing is worth a closer look.
- Our valuation analysis suggests that the H-Share price range is fair. Pricing is expected on 17 January with an H-Share listing on 14 January.
STAR50 Index Rebalance Preview (March 2022): What Will The Index Committee Do?
- The main question, for yet another rebalance, is whether the index committee chooses a 6 month minimum listing history or increases it to 12 months in line with the methodology.
- That decision will result in either 4 or 5 changes at the rebalance. The deletions remain the same, while there is only 1 inclusion common across both lists.
- There is a fair bit to trade on the potential inclusions and exclusions and we expect the inclusions to outperform the deletions over the next couple of months.
Macro; New Bond Issues; Rating Changes; Talking Heads; Top Gainers and Losers
US equity markets ended lower on Friday, with the S&P and Nasdaq down 0.3% and 0.6% respectively. The indices ended 27% and 21% higher during the whole year 2021. US 10Y Treasury yields were flat at 1.51%. European markets were mixed with the DAX up 0.2% while CAC and FTSE were down 0.3% each. Brazil’s Bovespa was up 0.7%. In the Middle East, UAE’s ADX was up 0.5% and Saudi TASI ended 0.4% higher on Sunday. Asian markets have opened mixed – Shanghai and STI were up 0.6% and 0.3% while HSI and Nikkei were down 0.3% and 0.4% respectively. US IG CDS spreads tightened 0.2bp and HY CDS spreads tightened 1.7bp. EU Main CDS spreads were flat and Crossover CDS spreads were 0.2bp wider. Asia ex-Japan CDS spreads tightened 0.2bp.
Porton Pharma Solutions (300363.CH) – Not Easy to Get into the First Tier
- Porton made a successful turnaround and the CGT business layout is also in the right direction. The US$217 million new order would improve the certainties of its 2022 performance.
- The concerns on potential deterioration of international relations and the broken logic in CXO sector also apply to Porton Pharma Solutions (300363 CH), which should be aware of by investors.
- So, there is a long way to go for Porton to truly get into the first tier. It may not be a good buying point currently considering the high valuation.
Morning Views Asia: Evergrande, China South City, Future Retail Ltd, Tata Motors ADR
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.
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