In today’s briefing:
- Gap Trades in Korean Prefs Vs Common Share Pairs in 4Q 2022
- Is China Close to a Turning Point?
- The Game Is On: Malaysia’s Most Unpredictable Election Ever
- The Week That Was in ASEAN@Smartkarma – Metrodata Electronics, JCNC’s Discount, and SCB in Thailand
- Malaysia’s Budget 2023: A Sceptic’s Note
- The Philippines: All Indicators Flashing Green
- The Commodity Report #72
Gap Trades in Korean Prefs Vs Common Share Pairs in 4Q 2022
- In this insight, we discuss numerous gap trades involving Korean preferred and common shares in 4Q 2022.
- The excessive gaps in the preferred and common shares of Hotel Shilla and GS Holdings could reverse in the next several months, in our view.
- We see some attractive longer-term opportunities for Doosan Fuelcell, Amorepacific Corp, CJ Cheiljedang, and LG Chem, which have especially high discounts for the preferred shares versus their counterpart common shares.
Is China Close to a Turning Point?
- Policy support is being ramped up – in the last week, for instance, three additional support measures were announced for the property sector.
- The PBoC is also stepping up credit provision to favoured sectors by resuming the Pledged Supplemental Lending (PSL) programme with CNY108.2bn of such loans issued to the 3 policy banks.
- Then, there is growing talk about further relaxation of China’s stringent pandemic restrictions, as they are applied to foreigners.
The Game Is On: Malaysia’s Most Unpredictable Election Ever
- Three separate coalitions – Barisan Nasional, Pakatan Harapan and Perikatan Nasional – will duke it out. That makes for great uncertainty in a first-past-the-post election system.
- Much will hinge on electoral pacts, voter turnout and how tactical the voters are likely to be.
- The two most likely outcomes are a win by an UMNO-led coalition, or a hung parliament similar to the one dissolved today, although this is subject to considerable uncertainty.
The Week That Was in ASEAN@Smartkarma – Metrodata Electronics, JCNC’s Discount, and SCB in Thailand
- The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across South East Asia.
- The past week saw insights on PT Metrodata Electronics post results, Jardine Cycle & Carriage as its disc relative to Astra International narrows, and Betagro IPO in Thailand.
- There were also insights on Siam Commercial Bank, Singapore Medical,Eagle Cement Corp, BTS Group Holdings, and commentary on the Global Fund Manager’s Survey from a Thai perspective.
Malaysia’s Budget 2023: A Sceptic’s Note
- The budget tabled merely three days earlier may provide some clues to the government’s intentions if it is indeed re-elected.
- Much of the fiscal consolidation can be attributed to the withdrawal of COVID-era fiscal aid, rather than structural measures to improve government efficiency.
- Given that the government has attempted a modest contraction in expenditures despite the electoral pressures, our view is that the fiscal stance is broadly appropriate for the economic circumstances.
The Philippines: All Indicators Flashing Green
- In the Philippines, the bottom-up indicators paint a sanguine picture for the economy.
- Manufacturing held up, labour market conditions improved further, and NPLs trended down.
- Watch for lagged effects of rate hikes moving forward, with an expected ~300bps in rate hikes this year.
The Commodity Report #72
- The group announced to cut its output limits of as much as 2 million barrels a day, using current targets as a starting point.
- While a significant reduction, the impact on global supply will be much smaller because several countries are already pumping below their quotas.
- Most analysts expect that the real supply cut will be around 700 to 800 bpd.
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