In today’s briefing:
- HS Holdings (8699 JP) Buyback – Adds More to BVPS
- Quiddity Leaderboard ASX Sep 23: Many Changes Ahead
- Japan Post Bank – Weak Yen, High Topix, US CLO’s, Many Moving Parts, Profit Risk
- KFin Tech Lock-Up – US$183m Lockup Expiry Could See PE Investor Trim Further
- BlackRock: Higher Entry Fees And Incentives Inbound (Rating Upgrade)
- Japan and Taiwan Add Levels
- Australia Banks – MQG Funding Cost, NPLs Far Worse, With Higher Rates, Longer
HS Holdings (8699 JP) Buyback – Adds More to BVPS
- HS Holdings (8699 JP) remains an interesting hodgepodge of assets. It owns just under 50% of Mongolia’s biggest bank, recently IPOed Khan Bank (KHAN MO).
- It has a pile of cash. And it has a glorified pawn shop business in Japan. The bank shares must be sold, to a significant degree, by end of year.
- Today it announced a buyback tomorrow of 6.4% of shares out. I expect it is one of two large individual holders. We’ll probably know more within a week.
Quiddity Leaderboard ASX Sep 23: Many Changes Ahead
- In this insight, we take a look at the potential index changes for ASX 300, 200, 100, 50, and 20 in the run up to the September 2023 Rebalance.
- I currently expect one change for the ASX 100 index and five changes (including one intra-review change) for the ASX 200 index.
- There could be 7 ADDs and 5 DELs for the ASX 300 index.
Japan Post Bank – Weak Yen, High Topix, US CLO’s, Many Moving Parts, Profit Risk
- Japan Post Bank is no ordinary bank, without much loans, and mostly investments
- It is well-known for its US CLO exposure, but also moving more into private equity
- Many moving parts to the bank’s earnings, where we see downside risk on profit
KFin Tech Lock-Up – US$183m Lockup Expiry Could See PE Investor Trim Further
- KFin Technologies (1804170D IN) was listed on 29th Dec 2022, when it raised around US$180m in its India IPO. Its six-month lockup will expire on 24th Jun 2023.
- KFin Technology (KFin) is a technology driven financial services platform providing comprehensive services and solutions to the capital markets ecosystem.
- Coming up for six-month expiry is General Atlantic (the Promoter) and other pre-IPO shareholders. The Promoter had been the sole selling shareholder in the IPO.
BlackRock: Higher Entry Fees And Incentives Inbound (Rating Upgrade)
- BlackRock, Inc. stock is overlooked, as most market participants have yet to recognize the firm’s recent inflection points.
- The firm’s base rates improved in Q1, which we think will continue into late 2023 and early 2024.
- However, we still back BlackRock’s stock to succeed.
Japan and Taiwan Add Levels
- Japan and Taiwan have been top bull bets in Asia and still a space we like adding. Dips to date have been shallow and must be factored into entry levels.
- Japan and Taiwan have both shown impulsive rally structures as has India’s Nifty (a bit tired amid overbought readings).
- An SPX bull turn will be used as a long trigger for the Nikkei and Taiwan (Asia). Late June cycle peak approaching.
Australia Banks – MQG Funding Cost, NPLs Far Worse, With Higher Rates, Longer
- MQG is seeing far higher NPL growth than traditional bank peers
- Funding costs pressure are far higher and NIM contraction is substantial
- High rates for longer & greater risks of recessionary-conditions can weight more on MQG
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