Daily Brief Financials: Macquarie Korea Infra Fund, Abacus Storage King, Nikkei 225, Mitsui Fudosan Logistics Park Inc, Lippo Karawaci, Bank of Nova Scotia, Sino-Ocean Group and more

• On 28 July, Macquarie Korea Infra Fund (088980 KS) announced that it will conduct a rights offering worth 361 billion won, representing 7.4% of its current market cap. 
• The major uses of funds from the rights offering include acquisition of a city gas supplier (128 billion won) and investment in Incheon-Gimpo Expressway private investment project (128 billion won).
• We have a positive view of this rights offering. We believe the acquisition of CN City Energy and the investment in Incheon-Gimpo Expressway will add additional value on the company. 

• Abacus Property (ABP AU) de-stapled Abacus Storage King (ASK AU), its self-storage business. 
• Offering 1 ASK share for every 5.6 ABP share, the REIT raised A$225m (US$150m) after the deal was priced at the bottom end of the indicative price band at A$1.41/share.
• The deal is effectively an IPO, and after having been in the making for some time now, it is well flagged as well.

• The Nikkei 225 (NKY INDEX) rallied +27% in the first 6 months of 2023. 6 months closed up, July closed (barely) down. The index can rise further in Aug/Sep.
• If August is down, a LONG opportunity: look at support prices between 32391 and 30600,  good probability to see the market going higher from there.
• If rallying in August, Nikkei could rise between +1.73% (33745) and +3.29% (34265). Continuation of the rally into September could reach higher prices but will encounter resistance at +8.29% (35922).

• Mitsui Fudosan Logistics Park Inc (3471 JP) is looking to raise US$106m in its primary follow-on offering to acquire three properties and two 50% co-ownership interests in two properties. 
• The deal is a somewhat large one to digest, at 20 days of three month ADV and 5.3% dilution. 
• In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Lippo Karawaci’s (LPKR) H1/23 results were much better than expected, and showed that the company was on track to achieve its turnaround goals. All business segments performed well, with healthcare again the largest contributor to revenue and earnings. Still, we note positively that the real estate segment’s performance was in line with guidance amid a challenging operating environment, with high and rising interest rates. Conversely, the financial risk profile remains weak, with elevated leverage ratios and thin fixed charge cover. Liquidity is barely adequate.

The healthcare segment continues to be LPKR’s key pillar, accounting for two-thirds of revenue and boasting strong (and improved) EBITDA. Moreover, we note that the segment should be relatively immune to the volatility in the economy.

• Many analysts have a bullish outlook on The Bank of Nova Scotia’s stock, which is arguably warranted.
• But plenty of risk factors are being overlooked, and late payments are mounting with short-term retail obligations in particular focus.
• Scotiabank’s emerging market strategy could present compelling trend growth.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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