In today’s briefing:
- Punters Take A Gamble on Genting Singapore
- WISE Theme Indexes Rebalancing: Conformity of Passive Flow to Price Return
- Genting Singapore in the Crosshairs of Potential Suitors
- AGL – Down, Not Out. Tight Coal Vs FIDs. And MCB Waiting
- Shanghai/Shenzhen Northbound Connect: Weekly Moves (15 July 2022)
- Shanghai/Shenzhen Southbound Connect: Weekly Moves (15 July 2022)
- Shaftesbury/Capco: Unattractive Spread
- ASX200 Index Rebalance: West African Resources (WAF) In; Uniti Group (UWL) Out
Punters Take A Gamble on Genting Singapore
- Bloomberg is reporting Genting Singapore (GENS SP) has been attracting suitors, including MGM Resorts International (MGM US).
- With Macau all-but emulating a Shanghai-style lockdown, including the recent shuttering of all casinos, large global casino operators will be looking to diversify their revenue base.
- But with Singapore potentially emerging as Asia’s go-to gaming destination going forward, it’s unlikely the Lim family will exit their Genting flagship.
WISE Theme Indexes Rebalancing: Conformity of Passive Flow to Price Return
- The ETF operator (TIGER)’s index tracking conformity was high enough to create trading opportunities aimed at the rebalancing flow.
- Flow/Price directions were mostly synched with only a few exceptions. Of particular importance is that the price impact was substantial compared to the passive flow size.
- The yield of the tradable names suitable for a basket based on the projected passive impact size was 4.51%.
Genting Singapore in the Crosshairs of Potential Suitors
- Bloomberg reported MGM Resorts International (MGM US) recently approached Genting Singapore (GENS SP)’s controlling shareholder, Genting Bhd (GENT MK), to express an interest in a deal.
- While the discussions with MGM Resorts have fizzled out, other potential suitors are reportedly interested. Shares are in a trading halt pending a response to an SGX query.
- Genting Singapore trades at a discount to peers. Precedent transactions suggest a potential privatisation price of at least S$1.00 per share, a 33% premium to the last close.
AGL – Down, Not Out. Tight Coal Vs FIDs. And MCB Waiting
- In the last six weeks, AGL Energy Ltd (AGL AU) has fallen and is now at the low end of its post-Brookfield bid trading range. Now below the A$8.25 bid.
- AGL has one generator down – the Loy Yang A Unit 2 – which will be back in late Sep. Guidance is left… unguided. There will be a related loss.
- In the meantime, the rest of the producing assets have probably been having a field day. But given shareholder structure, we’re still in limbo.
Shanghai/Shenzhen Northbound Connect: Weekly Moves (15 July 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 outflow over the past week was ~US$1.28bn, split between Shanghai (-US$0.85bn) and Shenzhen (-US$0.43bn)
- The largest inflows were into Aier Eye Hospital (300015 CH) and Shenzhen Mindray (300760 CH). The largest outflows were in China Merchants Bank (600036 CH) and Sungrow Power (300274 CH).
Shanghai/Shenzhen Southbound Connect: Weekly Moves (15 July 2022)
- Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry.
- Overall, the net outflow over the past week was ~US$0.56bn, split (-US$0.44bn) for Shanghai and (-US$0.12bn) for Shenzhen.
- The largest inflows were into Geely Auto (175 HK) and Hang Seng H Share Index ETF (2828 HK). The largest outflow was in Meituan (3690 HK) and CNOOC (883 HK).
Shaftesbury/Capco: Unattractive Spread
- Capco agreed to acquire Shaftesbury in a stock swap reverse takeover transaction (1 SHB LN x 3.356 CAPC LN). Shaftesbury shareholders will own 53% while Capco shareholders will own 47%.
- The market is not reacting positively to the deal. As per the exchange ratio, the deal implies a transfer of value from Shaftesbury to Capco, in my view.
- The spread is trading at a 3.4% premium. Although the premium is tightening, I am still unsure many Shaftesbury shareholders would like to accept the offer in its current terms.
ASX200 Index Rebalance: West African Resources (WAF) In; Uniti Group (UWL) Out
- West African Resources (WAF AU) will replace Uniti Group Ltd (UWL AU) in the S&P/ASX 200 (AS51 INDEX) at the close of trading on 21 July.
- We estimate passive trackers will need to sell 45.3m shares (A$226m; 10.2 days of ADV) on Uniti Group Ltd (UWL AU) at the close on 21 July.
- With over 10 days of ADV to buy from passive trackers and only 4 days to implementation, West African Resources (WAF AU) could outperform its peers till 21 July.
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