In today’s briefing:
- StubWorld: Swire Pac Trading “Rich” As Props Announces Big Write-Down
- EQD | The Nikkei Will Pullback Within 1-3 Weeks
- A closer look at stock bond correlation
StubWorld: Swire Pac Trading “Rich” As Props Announces Big Write-Down
- Swire Pacific (19 HK)‘s NAV discount has narrowed, and implied stub widened, after announcing its latest buyback. Separately, Swire Properties (1972 HK) flagged a HK$4.5bn writedown on its investment property.
- Preceding my comments on Swire are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
EQD | The Nikkei Will Pullback Within 1-3 Weeks
- The Nikkei 225 (NKY INDEX) is about to close up for the 3rd consecutive week (CC=+3), it’s towards the Q3 resistance level at 33984: it’s short-term overbought.
- There is a good chance that the index will pull back in the next 1-3 weeks, at the moment it looks like the rally has “stalled”.
- The pullback may be an opportunity to buy again, and ride a rebound to previous highs, we will discuss LONG levels in a separated insight.
A closer look at stock bond correlation
- For me, the most unexpected aspect of recent events has been that both bonds and stocks moved up together.
- My expectation for this year was that equities do well.
- But I thought they would eventually shake off bonds. Economic resilience (or in fact acceleration) would then force bond investors to chase equities.
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