Daily Brief Financials: CK Asset Holdings, Korea Stock Exchange KOSPI 200, New World Development, Aozora Bank Ltd, Goodman Group, Shriram Finance , USD, Precinct Properties New Zealand, Yanlord Land and more

• RTHK just reporting that HK Finance Secretary Paul Chan has said in his budget speech that HK will remove all property cooling measures in place, with immediate effect. 
• That would be That is Special Stamp Duty, Buyer’s Stamp Duty, New Residential Stamp Duty. “Measures no longer necessary given the current economic and market conditions.”
• This should cause people to get excited short-term about property developers.

• Insiders must disclose transaction details, complete deals within 30 days, limit deviations to 30%, and submit disclosures 30 days before transactions.
• Financial investors, including institutional ones, are exempt. This encompasses local pension funds (including NPS) and foreign financial investors. Deals under 1% of total shares and less than ₩5B are exempt.
• Confirmation of the timeline indicates many block deals before July. We should hunt potential deals for proactive setups. Also, we should monitor basis widening in futures due to short-selling ban.

• Hong Kong residential property prices declined 7% in 2023 and are down >20% from the 2021 peak in 2021. The average price of offices also declined ~7% in 2023.
• Scrapping property cooling measures, such as the special stamp duty applied to homes resold within 24 months, have been rumoured, to push up housing prices. 
• In today’s annual budget, we got those. And then some. 

• Murakami’s entity, City Index Eleventh, reported a 5.42% shareholding in Aozora Bank Ltd (8304 JP). Murakami started buying a day after the disastrous 3QFY23 results.
• Murakami’s average buy-in price is JPY2,137.88 per share, a 34% discount to the pre-3QFY23 results share price. 
• Murakami’s disclosure suggests two possibilities: the start of an activist campaign or a short-term trading play replicating the Pacific Metals (5541 JP) playbook.

• Yesterday after the close, well-known Japanese activist Murakami-san’s preferred entity City Index Eleventh filed a Large Shareholder Report. 
• The blast across Bloomberg was “*AOZORA 5.4% STAKE REPORTED BY CITY INDEX ELEVENTH.” Sounds exciting after the shares dropped 34% in two days earlier this month after reporting big writedowns. 
• But there has to be a question here. Why? And Why this way? And what kind of activism would be possible? 

• Goodman Group (GMG AU) has been moving higher recently and the stock has outperformed its peers handily over the last year.
• The stock trades marginally expensive compared to its peers and that could be partially attributed to the stock being a part of large indices.
• There is another index inclusion to come and that could lead to further outperformance in the short term.

• Shriram Finance (SHFL IN) will replace UPL Ltd (UPLL IN) in the NIFTY Index (NIFTY INDEX) at the close of trading on 27 March. This was a high probability change.
• Trent Ltd (TRENT IN) missed out on inclusion and that results in Bharat Petroleum Corp (BPCL IN) staying in the index.
• There is over 11 days of delivery volume to trade in the add and delete and there appears to be significant positioning in one of the stocks.

• The Federal Reserve was expected to announce tapering of quantitative tightening (QT) in March and implement it in April, but recent minutes suggest a more relaxed approach with no urgency to start the process soon.
• SOFR rates have trended lower in January, easing concerns over upward pressure, and there is plenty of liquidity in the marketplace, with significant RRP and reserve balances.
• Forecasting for the Fed’s balance sheet evolution suggests a less volatile TGA balance and a shift in the relationship between t-bill issuance and RRP balances, leading to a more stable scenario for reserves in the near term.

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• ADIA, via Haumi Co, is looking to raise NZ$262m (US$160m) from selling its entire stake in Precinct Properties New Zealand (PCT NZ).
• While the deal will be a clean-up share sale, the deal is a large one for the firm to digest at 344 days of its three month ADV.
• Momentum on the stock hasn’t been great, with the shares continuing to correct since the onset of the pandemic.

Yanlord’s FY 2023 results were robust in our view. The company reported solid top-line growth, albeit the margin contracted from a high base as projects were delivered outside of Shanghai. Still, cash flows were healthy, which supported meaningful debt reduction.

Yanlord’s near-term debt repayment risks have eased materially, after the company fully redeemed the YLLGSP 6.78 ’24s at maturity yesterday and successfully refinanced the USD syndication loan due in February 2024. The company’s next bond maturity will be in May 2026, when the USD 500 mn YLLGSP 5.125 ’26s come due.