Daily Brief Financials: Rothschild & Co, Commerzbank AG, S&P 500, Bank Brisyariah, K3 Capital Group, Bakkt, Hopson Development, Binance Coin and more

• Concordia (38.9% stake) points out that none of Rothschild’s businesses require a high amount of capital thus a listing brings more troubles than advantages (the enlarged family concert owns 54.5%).
• Lo and behold, a possible €48/share cash offer, partly financed with Rothschild’s cash holdings (via dividend and extraordinary dividend) is the solution, arguably cheap for a high-quality firm.
• My conservative Fwd P/E-based SOTP valuation is €53.9/share. There’s some margin to improve the offer. Spread is 2.3%/5.6% (gross/annualised). I would be long the shares.

• In this insight, we take a look at the names leading the race to become ADDs/DELETEs for the DAX, MDAX, and SDAX Indices.
• In the March 2023 review, I do not see any changes for the DAX index although a couple names are close to the border.
• As it stands, I currently expect two more changes between MDAX and SDAX and one more ADD/DEL for the SDAX index based on the latest available data.

• January CPI is due on Tuesday 14th and the market is expecting the biggest rise since October
• The SPX has rallied over 7% since December but the Yield Curve has been moving higher and the equity rhetoric is turning negative
• We look at a short-term trading opportunity in the options market to play the print

• Relatively newly formed, increased free float, dominant Shariah market share
• All 9 peer Shariah banks combined have less branches than BRIS
• 57% market share of Shariah lending, where growth is highest

• On 10 February, the High Court made an order sanctioning the scheme of arrangement (effective on 14 February). 13 February will be the last day of dealings in the shares.
• The listing will be cancelled on 15 February. Although a cheap offer, the need of capital for growth will benefit both K3 and the main shareholders who will remain onboard.
• Considering the short timetable, from a risk arb point of view, this has been a good trade nevertheless.

• Bakkt is enhancing its focus onto scalable B2B2C products and sunsetting its consumer app.
• Bakkt will continue its core focus of providing businesses with crypto and loyalty experiences for their customers through SaaS and API solutions on a secure and compliant platform.
• President & CEO Gavin Michael commented that as the company continues to “gain traction with our B2B2C strategy, we are laser focused on providing our partners and clients with seamless solutions that best serve their needs.

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 SCE
• Hopson Development

• Price Movements: cbETH, Coinbase’s liquid staking derivative, started trading at a discount after news broke that the SEC had fined Kraken $30mn. 
• Market Liquidity: LocalBitcoins shut down after 10 years of service after competition and a prolonged bear market sapped trade volume. 
• Derivatives: ETH options markets look bullish but more volatile than BTC.