In today’s briefing:
- Trading Opportunities Targeting Potential ADR Discount Increases from Korea’s Short-Selling Ban
- Trading Strategy of Ecopro Materials IPO Post Book Building Results and Short Selling Ban
- Rent.com.au Ltd – Portal Back on Track, Capital Raise to Support RentPay
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Trading Opportunities Targeting Potential ADR Discount Increases from Korea’s Short-Selling Ban
- Given Korea’s blanket ban on short-selling, we should concentrate on the likelihood of these ADRs being significantly discounted compared to their underlying shares.
- It should persist for an extended period, highlighting the importance of continuously monitoring ADR spreads over the next 2-3 months to seize the opportune entry timing.
- Since all these carry single-stock futures, a flexible setup targeting this spread can be designed, ideally incorporating currency hedges.
Trading Strategy of Ecopro Materials IPO Post Book Building Results and Short Selling Ban
- Ecopro Materials reported disappointing IPO book building results. IPO price has been finalized at 36,200 won, which is at the low end of the IPO price range.
- The demand ratio was 17.2 to 1 which was low. Total IPO offering amount was 419 billion won. Ecopro Materials will start trading on 17 November.
- Our base case valuation of Ecopro Materials is target price of 37,436 won per share, which is 3.4% higher than the IPO price. We remain negative on this IPO.
Rent.com.au Ltd – Portal Back on Track, Capital Raise to Support RentPay
- Rent.com.au Limited (ASX:RNT) is a purpose-led company seeking to empower home renters through its technology platform and a growing number of aligned transactional services.
- The company has reported Q1 FY24 revenue of $0.786m, with the search engine, Rent.com.au, returning to positive EBITDA of ~$0.05m.
- Separately the company has launched a fully-underwritten entitlement offer to raise $1.95m at $0.017/share to support the commercialisation of its fintech platform RentPay.