Daily Brief Industrials: Sembcorp Marine, Fujitec Co Ltd, Alight Inc, Adani Ports & Special Economic Zone and more

• Keppel Corp (KEP SP) shares will trade ex-distribution on 23 February and the settlement of the new Sembcorp Marine (SMM SP) shares is expected to take place on 1 March.
• MSCI has announced the inclusion of Sembcorp Marine (SMM SP) in the MSCI Singapore Free Index (SIMSCI INDEX) at the close on 1 March.
• There are a lot of recent shorts on Sembcorp Marine (SMM SP) and there could be buying on the stock following the announcement of the MSCI inclusion.

• Last night, MSCI announced Sembcorp Marine (SMM SP) will be added to MSCI Standard effective 2 March as the KOM Consideration Shares become tradable. This is something of a surprise.
• That other index family announced a temp line would be added to the index on receipt by Keppel shareholders. This dramatically changes the Day1 overhang arithmetic. 
• It erases most but not all of the Day 1 passive overhang, and means adding shares for the existing SMM portion. Medium-long-term active overhang is unchanged.

• Fujitec management is under the gun. Last week, both major international proxy advisors – ISS and Glass Lewis – generally favoured Oasis’ Spill The Board candidate slates.
• Fujitec Co Ltd (6406 JP), of course, had their opinion on the matter (Additional Explanatory Material, Response re ISS, Response re Glass Lewis) 
• How this breaks is a question. Shareholder structure analysis may take us there, but this could end mixed.

• Alight (NYSE: ALIT, $4.5b market cap) is a well-established company providing health, wealth, payroll administration, and human capital management cloud advisory services to most of the leading companies in the United States.
• The company exhibits many qualities that make it an attractive long-term investment: this is an extremely sticky business with 97% revenue retention, high levels of recurring revenues, a market-leading position, and a blue-chip customer base.
• Management also has many levers to accelerate growth further and improve profitability.

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.

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