In today’s briefing:
- Breaking: Korea Drops Martial Law, Local Markets in Turmoil—What’s the Short-Term Trade Play Here?
- Goodman Group (GMG AU) Placement: Limited Index Flows
- Goodman Group Placement – Large Shareholder Looking to Raise US$1.2bn but Discount Is Tight
- DigiCo Infrastructure REIT IPO – Looks Decent – After All the Adjustments
- Chailease – A Window on China Lending, +62% Impairment Costs, Decelerating Loan Growth in China
- EQD | The Come Back Of The Hang Seng
- Equity Commonwealth Liquidation: Potential 40%-60% Upside Amid Real Estate Asset Sales and Wind-Down Challenges
- Crypto Crisp: Indeed, Ethereum Shines Again
- Lucror Analytics – Morning Views Asia
- TRC: Optimistic That Recent Actions Signal Improved Commitment to Delivering Shareholder Value
Breaking: Korea Drops Martial Law, Local Markets in Turmoil—What’s the Short-Term Trade Play Here?
- Martial law has been declared 11 times since 1945, but this is the first since Korea’s post-‘90 democratization.
- The Martial Law Command’s first proclamation blocks parliament, raising legal questions about its constitutionality and making any immediate attempt to end martial law uncertain.
- Defense and telecom stocks could outperform short-term due to martial law, making them strong trading targets to watch.
Goodman Group (GMG AU) Placement: Limited Index Flows
- China Investment Corp owns 7.84% of Goodman Group (GMG AU) and is looking to sell 50.4m shares (2.64% of shares out) at a price range of A$37.55-37.6/share, a tiny discount.
- Goodman Group (GMG AU) has run away from its peers over the last couple of years and there could be a move lower in the stock following the placement.
- There will be limited passive buying in the short-term coinciding with the placement. There will be some more passive buying in February.
Goodman Group Placement – Large Shareholder Looking to Raise US$1.2bn but Discount Is Tight
- CIC is looking to raise around US$1.2bn, via selling around 2.6% of its stake in Goodman Group (GMG AU) , via a block trade.
- Goodman’s shares have performed exceptionally well over the past year, driven by its pivot towards data centers.
- In this note, we will talk about the placement and run the deal through our ECM framework.
DigiCo Infrastructure REIT IPO – Looks Decent – After All the Adjustments
- DigiCo REIT (DIGICO AU) is looking to raise around US$1.3bn in its Australian IPO.
- DigiCo REIT (DREIT) aims to be a diversified owner, operator and developer of data centres, with a global portfolio and broad investment mandate across stabilised, value-add and development opportunities
- We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.
Chailease – A Window on China Lending, +62% Impairment Costs, Decelerating Loan Growth in China
- Chailease offers an alternative view on China lending than the large mainstream banks there
- Data through 9M24 shows very high growth of its China impairment costs at +62% YoY
- Its lending in China is slowing sharply, often a reaction to worsening credit metrics
EQD | The Come Back Of The Hang Seng
- In a previous insight we presented a forecast where the Hang Seng Index could bounce after a 2-3 weeks pullback. The index started to rally from there.
- Currently the index is up for 2 consecutive weeks and from the charts and models that we will present here, you can see that it has room to go higher.
- Right now the index has not even reach the 25% (price) resistance level, and this confirms the bullish view.
Equity Commonwealth Liquidation: Potential 40%-60% Upside Amid Real Estate Asset Sales and Wind-Down Challenges
- Equity Commonwealth is in late-stage liquidation; a $19/share dividend is set for December 6, with a remaining distribution expected in Q1 2025 between $1-$2/share.
- The Denver property, 17th Street Plaza, is expected to sell for $142 million, with potential risks of sale delays beyond Q1 2025.
- Wind-down expenses are estimated at $0.40-$0.50/share, mainly for executive compensation, with contingency reserves expected to be under $10 million.
Crypto Crisp: Indeed, Ethereum Shines Again
- In Crypto Moves #44 from September 19, we stated that Ethereum would shine again.
- This prediction appears to be steadily materializing.
- Since the U.S. Presidential election, Ethereum has regained some of the ground it has lost against Bitcoin during the year.
Lucror Analytics – Morning Views Asia
- In today’s Morning Views publication we comment on developments of the following high yield issuers: New World Development, Indofood CBP, Azure Power, Adani Green Energy, Meituan
- In the US, treasuries climbed in a holiday-shortened session on Friday, with yields falling 8-10 bps across the curve. The yield on the 2Y UST dropped 8 bps to 4.15%, while that on the 10Y UST declined 10 bps to 4.17%.
- Equities rallied, with the S&P 500 rising 0.6% to a new record high of 6,032.
TRC: Optimistic That Recent Actions Signal Improved Commitment to Delivering Shareholder Value
- Moreover, reflecting discussions concerning TRC’s business, financial performance and other matters, TRC reached a standstill agreement last month with Nitor Capital, which had voiced concerns about the company’s direction and operations.
- We view the agreement as a positive outcome of their discussions, particularly in light of the new board composition.
- The substantial need for industrial, commercial and residential space near TRC’s land — likely heightened by the opening of the nearby Hard Rock Hotel & Casino Tejon next year — underscores the attractiveness of TRC’s property, in our view.
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