Daily Brief Energy/Materials: Aag Energy Holdings, Liontown Resources, Jindal Steel & Power, ABM Investama, Crude Oil, Omai Gold Mines, Ppg Industries, Agnico Eagle Mines, Alcoa and more

• Aag Energy Holdings (2686 HK)’s latest AGM results show a strong dissent from minorities. The number of NO votes per resolution varied from 590.9-652.5 million or 17.40%-19.22% of outstanding shares.
• The AGM voting shows that Xinjiang Xintai Natural Gas (603393 CH) will struggle to pass the scheme even if the record date is changed and some NO votes are invalidated.
• The risk-reward profile remains unfavourable as the downside to a scheme fail (12.1% to 17.0% downside) is greater than the upside to a scheme pass (+12.1% to HK$1.85 offer).

• On the 28 March, lithium play Liontown Resources (LTR AU) rejected Albemarle Corp (ALB US)‘s third proposal of $2.50/share, citing the revised terms as opportunistic.
• Since, that date, it’s been “crickets.” Preliminary due diligence was not provided to Albemarle. Liontown responded to media speculation today saying it has received no new takeover proposals. 
• Yet behind the scenes, an interested party has been building a stake, paying up to $2.75/share, 1.5% above the last close.

• Halfway through the review period, we see 5 potential changes for the Nifty Next 50 Index (NIFTYJR INDEX)/ Nifty 100 Index (NSE100 INDEX) at the September rebalance.
• All the potential adds are expected to migrate from MidCap to LargeCap at the AMFI June reclassification, while we expect two of the potential deletes to move the other way.
• Of the potential deletes, one is a high probability deletion from the MSCI India Index at the May QCIR while there is another that is a lower probability deletion.

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks. The Asia Monthly is intended to broaden investors’ understanding of the Asian USD high-yield market.

• In unprecedented fashion, AAG Energy Holdings (2686 HK)‘s board adjourned the Court Meeting on the 27 April due to some voting instructions not being duly processed.
• That reasoning had a whiff of nonsense. And just under a week later, there has been no update. Perhaps this is moot though.
• At yesterday’s AGM, disinterested shareholders turned up in record numbers to vote against stock-standard resolutions. If a similar turnout were present at the Court Meeting, the Scheme would have failed. 

• In its latest Commodity Markets Outlook report the World Bank said last week that global commodity prices are expected to decline this year at the fastest pace
• The agency expects prices to fall 21% compared to last year during 2023.
• For 2024 the World Bank expects prices to remain stable. 

• The Company has completed 6 drill holes, totalling 1,364m
• A new diamond drill is on site which will commence drilling next week and will improve drilling capabilities and productivity
• The Company has commenced preliminary studies for a future preliminary economic assessment

• Despite macro-challenges like weak global industrial activity, high cost inflation, ongoing geopolitical issues, and waning demand in U.S. construction-related end-use markets, PPG Industries delivered an all-around beat in its recent result.
• During the quarter, PPG gained several new clients, including Walmart’s 3,800 paint-related retail locations.
• Besides, with more global rollouts planned, the company expects the automotive refinish industry to have 1,400 MOONWALK machines installed.

Agnico Eagle Mines (AEM) started the year with strong quarterly production of 813koz at an US$832/oz total cash cost and a US$1,125/oz all-in sustaining cost (AISC). A number of records were achieved, including in cash flow and safety. This marks the final quarter incorporating 50% of production from Canadian Malartic. From 30 March, this will increase to 100%, following AEM’s acquisition of Yamana’s Canadian assets, which will add c 80–90koz in attributable production per quarter. Guidance for FY23 remains unchanged at 3.24–3.44Moz at a cash cost of US$840–890/oz and AISC of US$1,140–1,190/oz. An unchanged quarterly dividend of US$0.40/share was declared.

• AlcAlcoa Corporation’s first quarter of 2023 was a disaster as the company failed to meet the revenue expectations of Wall Street and delivered wider-than-expected losses.
• Its revenues remained flat at $2.7 billion on lower shipments, realized prices were higher for both aluminum and alumina, with aluminum up 7% and alumina up 8% sequentially.
• Besides, Alcoa announced the addition of some grades of non-metallurgical alumina to the company’s EcoSource low-carbon alumina brand.