In today’s briefing:
- Capitaland Ascendas REIT Placement – Good Track Record and Most Deals Have Performed Well
- GLP J-Reit (3281 JP): Cheaper than Peers, Offering Could Be a Catalyst
- Edelweiss: Recent Volatility In The Stock Seems Unwarranted
- MVIS Australia A-REITs Index Rebalance Preview: Capping Changes & Flows
- Pavilion REIT Placement – Very Well Flagged, Has Been Expected for Some Time
- [Futu Holdings (FUTU US) Earnings Preview]: Steady Operation Albeit Regulation Concern Overhang
Capitaland Ascendas REIT Placement – Good Track Record and Most Deals Have Performed Well
- CapitaLand Ascendas REIT (CLAR SP) is looking to raise up to S$459m (US$344m) in its primary placement. The proceeds will be used for acquisition, redevelopment and debt repayment purposes.
- The deal will be a large one to digest at 15.8 days of three month ADV and 3.9% dilution.
- In this note, we’ll run the deal through our ECM framework and comment on deal dynamics.
GLP J-Reit (3281 JP): Cheaper than Peers, Offering Could Be a Catalyst
- On 15th May 2023, large-cap logistics JREIT GLP J-REIT (3281 JP) (“GLP”) announced a follow-on equity offering to fund part of their recently-announced property acquisition.
- The primary offer quantity is 209,991 units. In addition, there will also be an over-allotment quantity of 3,200 units. The total size of this offering could be roughly ¥30.6bn (~US$225mn).
- In this insight, we take a closer look at the details of this offering and the potential of this offering to trigger strong secondary market performance in the following weeks.
Edelweiss: Recent Volatility In The Stock Seems Unwarranted
- Edelweiss’ stock was down over -5% yesterday. The reason for downfall seems to be a media article which states that three large brokers are being investigated for money laundering activities.
- We think Edelweiss is not one of them as the article mentions that these brokers are being investigated since their involvement in the NSEL scam, where Edelweiss had no involvement.
- In fact, Edelweiss was among the few brokers that had come out unscathed in the NSEL scam, as it detected early on that there was some wrongdoing happening at NSEL.
MVIS Australia A-REITs Index Rebalance Preview: Capping Changes & Flows
- We do not expect any constituent changes in June (that could change though!). The only flows are likely to be from capping the constituents at 10% of the index weight.
- Capping changes will lead to a one-way turnover of 2.15% resulting in a one-way trade of A$14m. There are two stocks with over A$5m to trade.
- Stockland (SGP AU) will be the most affected stock with passive trackers needing to sell over 1 day of ADV. The stock has run up and shorts are increasing.
Pavilion REIT Placement – Very Well Flagged, Has Been Expected for Some Time
- Pavilion Real Estate Investment Trust (PREIT MK) is looking to raise up to MYR$517m (US$115m) in its primary placement.
- The proceeds will be used to partially finance its acquisition of Pavilion Bukit Jalil (PBJ) mall.
- In this note, we’ll run the deal through our ECM framework and comment on deal dynamics.
[Futu Holdings (FUTU US) Earnings Preview]: Steady Operation Albeit Regulation Concern Overhang
- We expect Futu to report 1Q23 revenue in-line with consensus, while net income beat consensus by 4.2%, mainly due to less operating expenses.
- The next catalysts in 2023 could be 1) gradual market share gain in HK region, 2) potential new markets in Japan and Southeast Asia.
- We maintain BUY rating on FUTU and maintain TP at US$51.
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