Daily Brief Financials: Rakuten Bank, iShares MSCI Emerging Markets, Korea Stock Exchange Kospi 200 Index, Target Healthcare REIT PLC, Deutsche Beteiligungs AG and more

• Rakuten Bank, the online banking arm of Rakuten Inc (4755 JP), aims to raise around US$500m (estimated) in its Japan listing in April 2023. 
• RB is the largest internet bank in Japan, by number of accounts. As of Mar 2023, it had 13.39m deposit accounts with a total deposit base of JPY8.6tn. 
• In this note we take an early look at the IPO and talk about the positive aspects of its past performance.

• EEM topped ahead of the DXY 101 bottom (lead) showing strong synergy with our bull DXY and bullish yield charts from last week.
• Bull divergence implies a 2-3 month USD and yield up cycle is in store. EEM rising channel breakdown due.
• HK was the first to crack trendline support. Korea is a weak link. India is one of the clearer shorts. Australia, Taiwan and then Japan are set to roll over.

• KOSPI2 Index trading off the highs but supported by the 200-dma
• Implied vols are trading cheap offering a good entry point
• Options continue to be priced cheaply and we look at simple upside plays

For Q223, Target Healthcare REIT declared a second quarterly DPS of 1.69p, supported by inflation-linked rental growth and improving rent collection, which are in turn protected by fixed costs on 96% of borrowings. Yield widening across the broad property sector affected the portfolio’s property valuations, although the effect was significantly mitigated by the quality of Target’s portfolio and long-term, indexed leases.

Deutsche Beteiligungs (DBAG) posted a 7% increase in NAV per share in Q123 (ending 31 December 2022), supported by a €23.9m positive effect related to the higher earnings of portfolio companies, mostly due to the shift from 2022 to 2023 budgeted earnings in their carrying values. This was further strengthened by €36.5m valuation tailwinds from higher multiples amid the rally in public equities in the last quarter of 2022, as well as the recognition of agreed disposal prices (most notably for BTV Multimedia). DBAG’s shares trade at a 6% discount to NAV, while historically they have traded at a premium (6% on average in the last five years), reflecting the value of the fund services business.