In today’s briefing:
- Pullback Continues; Japan & India Remain Attractive
- STOXX Europe 600 Sep 2022 Rebal: ADDs Could Outperform DELs for the Next Few Weeks
- Leapmotor IPO: Valuation First-Look
- Shanghai/Shenzhen Northbound Connect: Weekly Moves (2 September 2022)
- Chongqing Hongjiu Fruit IPO Trading – Scraped Through with Tepid Subscription Rates
- Home Depot: B2B Platform Enhancements For Pros & Other Drivers
- Lowe’s Companies: Major Drivers
Pullback Continues; Japan & India Remain Attractive
- We continue to see global equities as being in pullback mode, with the MSCI ACWI index (ACWI-US) already testing important support in the $86-87 range, highlighted last week.
- A bounce here would be ideal for the bullish case, but we could easily see a test of the YTD lows near $81.50 if $86 fails to hold.
- Japan’s TOPIX/Nikkei225/TOPIX Small remain bullish, as does India’s SENSEX — add exposure. Seeing some failed breakouts in Europe, notably the EURO STOXX 50 and STOXX Europe 600; a concerning development.
STOXX Europe 600 Sep 2022 Rebal: ADDs Could Outperform DELs for the Next Few Weeks
- The September 2022 index changes for the STOXX Benchmark Indices were announced yesterday.
- There will be 16 ADDs/DELs for the STOXX Europe 600 Index and there will be 5 ADDs and 6 DELs for the EURO STOXX Index.
- In this insight, we take a closer look at the index flow expectations and the historical performance of Rebal events.
Leapmotor IPO: Valuation First-Look
- Leapmotor (2007699D HK), a Chinese EV manufacturer, is pre-marketing a US$1.5 billion HKEx IPO, according to press reports.
- We previously discussed the IPO in Leapmotor IPO: The Bull Case, Leapmotor IPO: The Bear Case and Leapmotor IPO: Look Before You Leap.
- In this note, we present our forecasts and take the first look at Leapmotor’s potential valuation range.
Shanghai/Shenzhen Northbound Connect: Weekly Moves (2 September 2022)
- Inside is a recap of movements in the last week relating to the Hong Kong Stock Exchange -Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry
- Overall, net inflow over the past week was ~US$0.7bn, split between Shanghai (US$0.3bn) and Shenzhen (US$0.4bn).
- The largest inflows were into Gree Electric Appliances (000651 CH) and CATL (300750 CH). The largest outflows were in Industrial Bank (601166 CH) and China Merchants Bank (600036 CH).
Chongqing Hongjiu Fruit IPO Trading – Scraped Through with Tepid Subscription Rates
- Chongqing Hongjiu Fruit (6689 HK) raised around US$71m in its Hong Kong IPO.
- CHJF’s subscription rates were lackluster with weak coverage on the institutional tranche and the retail portion being undersubscribed.
- However, after applying a discount to the local peer average, we think there still remains some upside for investors given its higher revenue and profitability growth.
Home Depot: B2B Platform Enhancements For Pros & Other Drivers
- Home Depot had a surprisingly good quarter unlike its rival, Lowe’s and delivered and all-around beat.
- All of the merchandizing departments of Home Depot posted positive comps; hardware, paint, millwork, plumbing, and building materials were all above average.
- Home Depot launched new capabilities on its B2B website to enhance the interconnected quoting and shopping business for its Pros.
Lowe’s Companies: Major Drivers
- Lowe’s had a disappointing quarter and saw a decline in its total revenues.
- Pro sales remained strong for the quarter.
- The trends of underlying home improvements during the quarter remained strong in the quarter, but the sales of DIY have been lower.
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