Daily Brief Financials: S&P 500, Kakao Pay, New World Development, Japan Post Holdings, Meritz Financial Group, KBW Bank Index, Times China and more

• SPX low due near March 27 that sets up a recovery sequence into April. Macro remains bearish into the summer months where financial sector risk is to resurface.
• Weekly MACD set to roll over from reliable resistance after the 4,000 rejection on the daily chart.
• USD holding firm in Asia and EM due to pending risk aversion. Euro rise is corrective in nature.

• Kakao Pay’s GICS sector movement from IT to FINANCIALS creates flow trading opportunities due to the subsequent transfer between KOSPI 200’s sector sub-indices.
• An outflow of ₩24.6B or 410K shares will occur. This is 0.6x ADTV. Given that the recent trading volume has further decreased, the actual impact will likely exceed 1.0x DTV.
• It will be a concentrated flow in a single trading day by a single ETF, which gives us plenty of reasons for preemptively designing a short position targeting this.

• Upcoming banking crisis will accelerate in the coming few weeks, it is very likely Fed will slow down rate hike or re-start a rate cut cycle
• To position for this:  BUY Hong Kong property developers New World Development 17 HK, Henderson 12 HK, Sun Hung Kai Properties 16 HK
• Apart from HK RE developers, buy China’s name Hang Lung (101 HK) and crypto-currency (BTC and ETH)

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments – SBI Sumishin Net Bank (7163 JP), Trial Holdings (5882 JP) and PT Trimegah Bangun Persada Tbk (Harita Nickel) (2230010D IJ) IPOs; Japan Post Bank (7182 JP) offering.
• Event-Driven developments – Toshiba Corp (6502 JP), Toyo Construction (1890 JP), Genesis Minerals (GMD AU), Pushpay Holdings (PPH NZ), Aag Energy Holdings (2686 HK), Halcyon Agri (HACL SP).  

• On 17 March (after market close), Meritz Financial Group (138040 KS) announced a share buyback program worth 400 billion won, which represents 5.4% of its market cap.
• Given the relative large size of this deal, it should have a positive impact on its share price, especially on a relative basis against its competitors. 
• The collapse of SVB Financial and uncertain investors’ reactions on the purchase of Credit Suisse by UBS will likely add to the global investors’ negative sentiment on the financial sector. 

• The UBS takeover of Credit Suisse was announced for $ 3.25 billion below Friday’s closing market capitalization of $7.87 billion.
• SNB will take the first loss of $9.7 billion and provide $100 billion of liquidity.
• Central Bank support triggers Credit Suisse AT1 capital write-downs of approximately $17.

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.

• Japfa Comfeed Indonesia
• Lippo Karawaci
• Times China