In today’s briefing:
- US Masters (URF AU): Almost Too Good To Be True
- Kenedix J-REIT Family Merger – Still Room (But Less Time) To Move (Redux-Ish)
- A Shift in TIGER Top 10 ETF December Rebalancing: KB Financial Newly In But Not Ecopro Co
- IndusInd Bank (IIB IN): Passive Buying Coming Up as Foreign Room Crosses Key Threshold
- Sponsor of Sankei Real Estate (2972) To Buy More Units in Revival Plan
- Country Garden’s Offshore Debt Issuance Structure May Be Less Favorable than that of Evergrande
- Hudco Oct 23 OFS – Momentum Has Been Strong, and Appears to Be Well Flagged
- Quiddity Leaderboard-DAX Dec 23: Two Changes for MDAX and Two Changes for SDAX
- Philippines Exchange (PSE PM): Deep Value Exchange With Growth Option Embedded
- EQD | KOSPI 200 Frail WEEKLY Rally Is Ending
US Masters (URF AU): Almost Too Good To Be True
- US Masters Residential Property Fund (URF AU), an ASX-listed real estate trust investing in single-family homes in gentrifying New York metropolitan neighbourhoods – what could go wrong?
- Quite a lot, apparently. Shares are down bigly from the 2011 listing; the responsible entity faced ASIC-backed court proceedings for misleading clients; plus dissent emerged over appointing a new RE.
- URF is gradually offloading its entire portfolio, and buying back shares, which are trading at 0.49x price-to-book. So, where’s the rub?
Kenedix J-REIT Family Merger – Still Room (But Less Time) To Move (Redux-Ish)
- A month ago I wrote there was still time, and room, to move on the Kenedix Merger.
- Now there’s less time, but the situation and relationships are better understood.
- Tracking Excess Volume during the period since the announcement is interesting. And it may tell you less than you think.
A Shift in TIGER Top 10 ETF December Rebalancing: KB Financial Newly In But Not Ecopro Co
- While Ecopro Co’s stock has undergone significant corrections since August, KB Financial has sustained an upward trajectory, leading to a significant reversal in float-adjusted market cap.
- The current disparity between the two exceeds ₩2T, making it challenging to anticipate another reversal until the screening period.
- Ecopro Co and LG Energy Solution also warrant attention due to the narrow gap in their float-adjusted market capitalization. We should monitor any changes in their market capitalization moving forward.
IndusInd Bank (IIB IN): Passive Buying Coming Up as Foreign Room Crosses Key Threshold
- Foreign investors sold ~5.7m shares of Indusind Bank (IIB IN) from July to September. That selling has pushed foreign room above the key 15% threshold.
- With foreign room crossing 15%, passive trackers will need to buy a chunk of Indusind Bank (IIB IN) stock at the end of November.
- There will be positioning on Indusind Bank (IIB IN) though it appears some of that was taken off in the last couple of days.
Sponsor of Sankei Real Estate (2972) To Buy More Units in Revival Plan
- On 16 October, the Asset Management Co of Sankei Real Estate (2972 JP) announced earnings, the execution of a Revival Plan, and said the sponsor, Sankei Building would buy more.
- They’ll buy for up to 220 days starting sometime before Feb-end. Presumably after the Revival Plan transactions have been executed.
- The REIT is cheap to peers. It is small to peers. It needs some reviving. But when a sponsor promises to buy, it pays to take a look.
Country Garden’s Offshore Debt Issuance Structure May Be Less Favorable than that of Evergrande
- Country Garden’s offshore debt default is happening. Its time to investor to revisit their position as restructuring is looming.
- Investors may not have any access to Country Garden’s onshore assets under its current offshore issuance structure.
- Evergrande’s offshore debt issuing structure could be more favourable compared to that of Country Garden in bankruptcy, depending on how the court interprets its Keepwell agreement.
Hudco Oct 23 OFS – Momentum Has Been Strong, and Appears to Be Well Flagged
- The Government of India (GoI) is looking to raise up to US$130m from trimming its stake in Housing and Urban Development Corporation Limited (HUDCO IN).
- The base deal includes a 3.5% stake sale, with an option to double it up to 7%. The selldown is targeted at meeting SEBI’s minimum public float requirements of 25%.
- At 7.5 days of three month ADV, the deal isn’t a very large one for the firm to digest.
Quiddity Leaderboard-DAX Dec 23: Two Changes for MDAX and Two Changes for SDAX
- 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 December 2023 Rebalance.
- Currently, I see two index changes for the MDAX index and two index changes for the SDAX index.
- I do not see any changes for the DAX index in December 2023.
Philippines Exchange (PSE PM): Deep Value Exchange With Growth Option Embedded
- Philippine Stock Exchange (PSE PM) is a monopoly making >60%>/45% EBITDA/NPAT margins across its history with ex-cash ROCE’s >30% (cash at five bn pesos is 33% of market cap).
- With a relatively low penetration of brokerage accounts (1.5%), an underowned market with 100mn USD volume, and low fee structures, there is ample low-hanging fruit on earnings growth.
- The stock trades at 18x PE (9x ex-cash and real estate). With an 80-100% payout, the dividend yield is 5-6%, so you are paid to wait for future catalysts. Our meeting with management in Manila last week gives us added confidence.
EQD | KOSPI 200 Frail WEEKLY Rally Is Ending
- The KOSPI 200 Index is currently rising for the 3rd week in a row and approaching the Q2 WEEKLY resistance level, but it’s a very weak rally.
- Between 329 and 331 there id a good area to go SHORT, the index could fall for 2-3 weeks from here, into early November.
- A negative close in October would be =3 months down in a row (CC=-3), November in that case would have good odds for a rebound and close up.
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