In today’s briefing:
- Shanghai/Shenzhen Southbound Connect: Weekly Moves (27 May 2022)
- Beauty Farm Medical and Health Industry Pre-IPO: Near-Term Operating Environment Is Not Beautiful
- BGH Capital in Pole Position at Virtus
- Harding Loevner Emerging Markets Equity Fund Q1 2022 Letter
Shanghai/Shenzhen Southbound Connect: Weekly Moves (27 May 2022)
- Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry.
- Overall, net inflow was ~US$1.1bn, split evenly (roughly) between Shanghai and Shenzhen.
- The largest inflows were into China Mobile (941 HK) and CNOOC Ltd (883 HK). The largest outflows were in Kuaishou Technology (1024 HK) and BYD (1211 HK).
Beauty Farm Medical and Health Industry Pre-IPO: Near-Term Operating Environment Is Not Beautiful
- Beauty Farm Medical and Health Industry (BFM HK), second largest body and skin care service provider in China has filed for IPO on the Hong Kong Stock Exchange.
- Large and growing addressable market, comprehensive service offering, nationwide store network, and sound financial position are the major strengths of the company.
- BFM’s operation faces uncertainties over COVID and related restrictions. This IPO is not expected to see listing gain unless general market condition and China’s economic growth outlook improve.
BGH Capital in Pole Position at Virtus
- The Virtus Health (VRT AU) Board changed their recommendation that the BGH takeover offer rather than the CapVest offer is in the best interest of shareholders.
- BGH and CapVest represent 22.38% and 1.13% of outstanding shares, respectively. Press reports suggest that it is unlikely that CapVest will increase its offer (scheme: A$8.15, takeover: A$8.10).
- The BGH takeover offer of A$8.15 per share remains open until 31 May. At the last close price, the gross spread to the BGH takeover offer is 0.9%.
Harding Loevner Emerging Markets Equity Fund Q1 2022 Letter
- Harding Loevner has been investing globally in high-quality, growing businesses based on disciplined industry research since 1989.
- Emerging Markets (EMs) declined sharply, primarily due to the collapse in Russian equities brought about by economic sanctions against Russia because of its invasion of Ukraine, as well as poor performance in China.
- The EM landscape is currently fogged by an exceptional confluence of risks: armed conflict in Ukraine, inflation, rising interest rates, volatile commodity prices, and concerns about food and energy security.
- Although we made only a handful of transactions this quarter, the portfolio’s profile changed significantly because of the write-down of our Russian holdings and the outsized returns of stocks benefiting from commodity price inflation.
Before it’s here, it’s on Smartkarma
