In today’s briefing:
- Australia: Potential Passive Selling in November Will Be Big
- CMCDI (133 HK): Concessions Don’t Go Far Enough
- EQD | Short-Term BUY Opportunity For The Nikkei 225
- Crypto Crisp: Excessive Futures Open Interest
- Auswide Bank (ABA AU)/MyState Ltd (MYS AU): 2nd Dec Merger Vote
- Rayonier Advanced Materials, Inc: Jesup Fire’s Transient Impact on 2024 EBITDA
Australia: Potential Passive Selling in November Will Be Big
- There could be two or three Aussie names that are deleted from global passive portfolios in November. In each of the cases, there is a lot to sell from passives.
- One name is very high probability while the deletion of the others depends on the day of the week chosen.
- Shorts have been built up on the stocks and there are strong indications of positioning. But the extent of the positioning varies, and the stocks could have differently.
CMCDI (133 HK): Concessions Don’t Go Far Enough
- On the 27th September, China Merchants China Direct Investments (133 HK) (CMCDI) teased a share buyback and a special dividend. But as of today. no firm details have been forthcoming.
- CMCDI has also now offered to reduce management fees by 25 basis points in the new management agreement, which will be voted on by independent shareholders in November/December.
- This concession does not go far enough. Especially when 45% of the management fees are received by founder Victor Chu.
EQD | Short-Term BUY Opportunity For The Nikkei 225
- The Nikkei 225 INDEX continues to move chaotically in highly unpredictable and fragmented fashion. At the moment it’s been falling for 2 weeks (CC=-2 to be confirmed on Friday).
- Since the index is in a phase where it keeps going up and down with no trend, we see an opportunity to accumulate short-term LONG positions on the current pullback.
- A small bounce from current levels, rising towards the 41k target, could generate some good returns in a short span of time. This would be a reversal trade.
Crypto Crisp: Excessive Futures Open Interest
- A new all-time high for Bitcoin is within reach, which aligns with the strength we anticipated in last week’s Crypto Crisp.
- As we have repeatedly emphasized, this quarter is primed for significant price growth due to a convergence of favorable factors.
- These include increased U.S. Dollar liquidity, strong seasonal trends, Chinese economic stimulus, and the post-fourth Bitcoin halving phase, which has historically led to substantial returns.
Auswide Bank (ABA AU)/MyState Ltd (MYS AU): 2nd Dec Merger Vote
- On the 19th August, MyState Ltd (MYS AU), Tassie’s largest bank, entered into a merger agreement by way of a Scheme with Queensland-based Auswide Bank (ABA AU).
- MyState will issue 1.112 new shares for every share held by Auswide shareholders, with MyState/Auswide investors holding 65.9%/34.1% ownership in the MergeCo.
- The Scheme Booklet is now out, with a Scheme Meeting to be held on the 2nd December Expected implementation on the 18th December. The IE (Kroll) says fair & reasonable.
Rayonier Advanced Materials, Inc: Jesup Fire’s Transient Impact on 2024 EBITDA
- Cellulose specialties production affected. RYAM issued a press release last Monday with respect to a fire that took place at the company’s largest plant in Jesup, GA plant on October 11 that will likely keep two cellulose specialties production lines offline until October 28, while the cause is investigated and repairs are made.
- Two of three production lines at Jesup affected. The fire, which occurred during scheduled maintenance work, was quickly contained without death or injury to plant employees or safety personnel, and has not affected the operations of Line C, which produces fluff pulp (270K mt annual capacity).
- Management believes the two-and-a-half-week disruption in the operations of Lines A and B, which manufacture cellulose specialties (330K mt annual capacity), will not materially affect its ability to supply its current customers.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
