Daily Brief Financials: Rakuten Bank , iShares Russell 2000 ETF, Aareal Bank AG and more

In today’s briefing:

Rakuten Bank – Big TOPIX Inclusion Next Week
Russell 2000 (IWM) Testing $180 Resistance; Rising Treasury Yields & DXY To Become a Problem?
Advent & CenterBridge/Aareal Bank AG: All Conditions Met

Rakuten Bank – Big TOPIX Inclusion Next Week

Rakuten Bank priced its IPO low and then immediately bounced. Earnings came in as forecast, and the forecast next year did too. Highish PBR, high ROE, not-so-high-PER on low ROA.
The stock fell on 16 May after Rakuten Bank announced its capital raising. That was probably a knee-jerk reaction, and had no reason.
Next week sees the TOPIX inclusion. And the Real World Float has gotten smaller since the offering. And some of those people aren’t going to sell near-term.

Since January 2023 we have anticipated 4165-4200 would cap upside on the S&P 500 for 2023, but that a rally to 4300-4325 is also possible; this remains our view.
So far there has not been much traction above 4200. Obvious problem is weak breadth, but this does not have to end badly if large-caps pause, and capital disperses elsewhere
To that end, we’re watching the Russell 2000 (IWM) which is testing 2.5-month resistance at $180; a break above resistance would signal improving breadth and would be a positive development

All conditions of the takeover offer have been fulfilled after the ECB approved the acquisition of a majority stake in Aareal. Settlement will take place by 7 June.
The shares closed 3.33% higher vs. prior trading session, above the offer price(!). Aareal is trading at an undemanding 0.6x P/BV and 10.7x NTM Fwd P/E. No dividend is expected.
The bidders specifically left open the possibility of a squeeze-out/delisting. If the 90% threshold is confirmed, I believe Atlantic will compulsorily acquire the remaining shares at €33/share.

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