In today’s briefing:
- Shinko Electric (6967) – Break/Gap Risk Early June 2024 Update
- MSC May Rebalance: SA & China Net Sells, NPN, PRX & Tencent Sold Down on Buybacks
- HSI/HSCEI/HSTECH June 2024 Rebal Final Re-Capping (Or Re-Re-Capping) Flows
- Raspberry Pi IPO Valuation Analysis
- Tech Supply Chain Tracker (05-Jun-2024): Gelsinger forecasts Intel Taiwan party for 40th anniversary.
- Using AI to Detect Fraud and Protect Your Investments
Shinko Electric (6967) – Break/Gap Risk Early June 2024 Update
- When this deal was announced, it was light. But the timing, JSR influence, large-ish float, ensured FUD would make this trade wide. It traded wider.
- Nearly 5mos ago, Shinko had much-underperformed peer Ibiden, meaning downside gap risk from undisturbed was negative as spreads were wide. I reco’d a buy. Then 12wks ago, recommended taking profits.
- Shinko had outperformed Ibiden, gross spreads had narrowed 5+% on JSR approval. Spreads are now 2.6% wider than at narrowest. In May, gap risk narrowed as Shinko underperformed Ibiden.
MSC May Rebalance: SA & China Net Sells, NPN, PRX & Tencent Sold Down on Buybacks
- MSC indices were rebalanced in the closing auction on Friday. Turnover for the day on the JSE was R41.9bn, R25bn traded in the closing auction (60%).
- Turnover at the February rebalance was R25.6bn. Most SA constituents were pushed lower in the closing auction and for the day, consistent with the downweighting of SA Inc.
- China was downweighted in the ACWI and EM indices for a second straight quarter, reducing the country weight in ACWI by 6bps to 2.69%.
HSI/HSCEI/HSTECH June 2024 Rebal Final Re-Capping (Or Re-Re-Capping) Flows
- The HSI added BYD Electronics (285 HK) and deleted Country Garden Services (6098 HK). HSCEI added Zijin Mining Group Co Ltd H (2899 HK) deleted Xinyi Solar Holdings (968 HK)
- HSTECH had no changes, but lots of flow. The index team sets capping levels, then resets them a three days before the actual rebalancing. There were some capping/recapping changes.
- Below we offer tables showing all the changes and flows across the indices for each stock, ranked by Flows, ADV, and Ticker. And a spreadsheet with all the relevant data.
Raspberry Pi IPO Valuation Analysis
- Raspberry Pi is expected to raise about £157 million in this IPO. The conditional trading for this IPO is expected to be take place on 11 June.
- We estimate Raspberry Pi to generate sales of US$342.1 million (up 28.7% YoY) and operating profit of US$48.5 million (up 29.3% YoY) in 2024.
- Our base case valuation of Raspberry Pi is market cap of £772 million or £4 per share (43% higher than the high end of the initial IPO price range).
Tech Supply Chain Tracker (05-Jun-2024): Gelsinger forecasts Intel Taiwan party for 40th anniversary.
- Gelsinger excited for AI PC breakthrough at Computex 2024, plans Intel’s 40th anniversary event in Taiwan next year.
- MediaTek unveils AI and wireless advancements at Computex 2024, demonstrating commitment to technology innovation.
- Nvidia CEO predicts rise of robots in the future; Taiwan’s LEO satellite program delayed by funding and tech transfer issues.
Using AI to Detect Fraud and Protect Your Investments
- Accounting fraud costs the global economy at least US$1 trillion each year in losses to investors, suppliers and consumers
- Detecting accounting fraud early gives investors valuable intel to rethink certain stock or bond holdings.
- Transparently.AI’s AI-powered solution is highly accurate in measuring and detecting accounting manipulation and fraud.
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