Daily Brief Financials: Mitsubishi UFJ Financial (MUFG), Seoul Guarantee Insurance, S&P/ASX 200, KE Holdings , China Jinmao Holdings, JPMorgan European Smaller Comp and more

• The biggest Japan banks by assets, in spotlight as near ending of negative interest rates, with lowest LDR, so highest bonds, cash, can see major benefit from YCC relief
• Years of low ROE at 5-7% seem behind MUFG now with 12-17% in past two quarters, where leverage is not out of control, with cost improvements key
• Loss loans down 29% over past two years, can support low credit costs, which dropped sharply from 81bps to 15bps from 3Q23 to 1Q24, possibly moving to reversals

• Seoul Guarantee Insurance Corp is getting ready to complete its IPO in Korea in the next several weeks. The IPO price range is from 39,500 won to 51,800 won. 
• Market cap is from 2.8 trillion won to 3.6 trillion won. At the high end of the IPO price range, this could be the biggest IPO in Korea in 2023.
• Many investors will be skeptical on the bankers including two overseas comps (Travelers and Coface) which have much higher valuations.

• The S&P/ASX 200 (AS51 INDEX) closed down last week (CC=-1), this week is rising again, we analyze the new, reset resistance levels to see how far it can go.
• Our previous, recent insight discussed the fact that the index has been locked in a range for 2 years, an uptrend may be unfolding but it must breach 7600.
• The current trend pattern is bearish, the index won’t rise more than 2-3 weeks, and it would probably go not very far: 7300-7400 should be the limit

• We think the mild recovery is driven by the delayed orders in Jul. and Aug, thus expect transaction volume to be flattish MoM in Sep.
• We think the recovery is on-track and expect Oct. volume to begin recovery and expect more meaningful rebound in Mar.-Apr. 2024, supported by 1) strong leading indicators from property agents, 
• 2) refer to the recover trajectory in 2014-2015.  We maintain the stock as BUY rating and maintain TP at US$24/ADS.

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.

• China Jinmao Holdings
• Vedanta Resources

JPMorgan European Discovery Trust (JEDT) invests in European small-cap companies (excluding UK), with the aim of providing shareholders with long term capital growth. The investment case for this sector is clear and simple. European small caps have outperformed most other markets over the long term. JEDT’s disappointing performance during H122 prompted its managers to rotate out of high-growth IT software and medtech stocks, in favour of a more balanced approach focused on quality and value names. Many of these acquisitions are now contributing to returns.