Daily Brief Financials: Nikkei 225, Bitcoin, New World Development, S&P 500 INDEX, Road King Infrastructure, Flywire Corp, Regional REIT Ltd and more

• The market turmoil over the last few trading sessions has not been kind to a simple index rebalance strategy of buying the forecast adds and selling the forecast deletes.
• The overall returns and stock specific returns indicate that trades are more crowded in some indices as compared to others and traders should consider that when position sizing.
• Anecdotally, periods of negative returns are followed by periods of strong returns for the strategy as weak hands are shaken out of their positions.

• It has been a massive bloodbath across the financial markets, not just in crypto.
• The Japanese Nikkei 225 Index experienced its largest intraday percentage drop since 1987.
• The S&P 500 opened about 3.5% down, with the Magnificent Seven stocks plunging around 9% at the opening.

• In this update, we analyzed recent NWD’s corporate actions, which show their de-leveraging plan is on track
• NWD, having the highest gearing among HK RE names, will become the biggest beneficiary if Fed starts a new rate cut cycle
• Valuation is compelling.  There is ample upside assuming a bear case scenario.  It is a BUY

• We are downgrading our long-term outlook to neutral (had been bullish since early-November 2023) due to rapidly deteriorating market dynamics
• We still believe the S&P 500 is going through a 1- to 4-month consolidation phase, but odds have increased that this consolidation phase could be a topping pattern.
• SPX is initially holding at 5100-5191 as discussed last week, but we’re not interested in knife-catching or picking a bottom, want to see stabilization/price discovery before adjusting our still-defensive posture.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Road King’s ESG as “Adequate”, in line with the Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Adequate”.

• Flywire Corporation has been discussed as a potential acquisition target due to several leading factors that underline its attractiveness in the financial technology sector.
• Flywire’s substantial client base, marked by successful expansion to over 4,000 clients since its Initial Public Offering in 2021, signals strong company growth and market acceptance.
• Serving clients across more than 50 countries and capable of handling transactions in over 140 currencies, Flywire boasts significant global reach and operational capabilities in foreign exchange.

The completion of Regional REIT’s (RGL’s) £110.5m equity raise has reduced gearing, including repayment of its retail bonds, and provides additional flexibility to its capex and disposal programmes. With funding uncertainty lifted, investor attention is likely to refocus on operational performance and the wider outlook for the regional office sector. Robust occupier demand for good quality assets continues to generate rental growth and the tone of the investment market has begun to improve.