In this briefing:
- ICICI Bank Ex-Chief: No Crime Here, Only Bad Conduct?
- Follow The Money
- Quick Take: Asian LNG Spot Prices Fall Below the UK NBP Gas Price
- ECM Weekly (2 February 2019) – Maoyan, China Tower, Dexin, Chalet Hotels, Bharat Hotels, Wingarc1st
- Semiconductor Memory Business Shrinking Fast
1. ICICI Bank Ex-Chief: No Crime Here, Only Bad Conduct?
The press statement issued by ICICI Bank based on the enquiry report headed by Justice (Retd.) Srikrishna to investigate the allegations against Chanda Kochhar appears deliberately confusing and convoluted. While it states that Chanda Kochhar was in violation of the bank’s Code of Conduct, on the more serious charge of whether her conduct violated Indian laws, it is surprisingly vague. The media highlighted the anomaly that the ICICI Bank board first absolved Kochhar, and the same board now found her guilty of violating its internal code of conduct. Media outlets portrayed the punishment sought by ICICI Bank against its former CEO (demanding a ‘claw back’ of all the bonuses and stock options given to her during her tenure as CEO) as stringent.
Although, in monetary terms, the penalty may be substantial, it is insignificant when compared with jail time for a possible criminal offence. From the press statement of ICICI Bank, it would appear that the Srikrishna report falls far short of the First Information Report (FIR) filed by the Central Bureau of Investigation (CBI); the latter charged her with the “suspected offence of criminal conspiracy, cheating, public servant taking illegal gratification/undue advantage, criminal misconduct of public servant and abuse of official position by public servant.”
2. Follow The Money
- January data on investor positioning show a big improvement in risk appetite for Emerging Markets
- Two-year ahead returns from risk assets likely to be sizeable and positive
- However, not clear that we are yet definitely at the ‘bottom’
- Strongest convictions are to favour EM over US and China over India
3. Quick Take: Asian LNG Spot Prices Fall Below the UK NBP Gas Price
Asian LNG spot prices have dropped for a short time below the UK NBP gas price, reversing the established trend that sees Asian LNG offering a premium to the European LNG price benchmarks. This note takes a look at the latest trends in the LNG markets and the renewed plans unveiled by Qatar to challenge its competitors, in particular, those from the US.
4. ECM Weekly (2 February 2019) – Maoyan, China Tower, Dexin, Chalet Hotels, Bharat Hotels, Wingarc1st
Aequitas Research puts out a weekly update on the deals that have been covered by Smartkarma Insight Providers recently, along with updates for upcoming IPOs.
Happy Lunar New Year to everyone from Aequitas Research!
It has been a fairly quiet week leading up to Chinese New Year but it is not stopping Maoyan Entertainment (1896 HK) from listing on Monday. The IPO was priced at the bottom end of its offering range. The last we checked, it traded up 3% in the grey market on Friday. Ke Yan, CFA, FRM will follow up with a short note of his thoughts on post-IPO trading dynamics and bookbuild subscription levels.
Other updates on IPO in Hong Kong include Sinochem Energy allowing its IPO application to lapse while Koolearn (1373356D HK) and Shangde Qizhi Education re-filed for IPO. Edvantage, another new education IPO (and likely to be borderline US$100m deal size) filed for Hong Kong listing this week as well.
China Tower (788 HK)‘s lock-up will be expiring on the 8th of February and Ke Yan, CFA, FRM mentioned in his insight that any potential placement will be a good opportunity to accumulate the stock. Placements from cornerstone investors will likely be a liquidity event.
In India, Chalet Hotels Limited (CHALET IN) closed its bookbuild with a tepid overall demand of 1.57x. The silver lining for the IPO is that the institutional tranche saw a healthy 4.6x demand, similar to that of Lemon Tree Hotels (LEMONTRE IN) in terms of weak overall but strong institutional demand, which ended up performing well in its IPO.
Other upcoming India IPOs include Mazagon Dock Shipbuilders Ltd (9155507Z IN) and Embassy REIT which were said to be seeking listing towards the end of February. Sterling and Wilson is also looking to file its INR50bn IPO with the Sebi soon.
In Japan, Wingarc1st announced its IPO bookbuild to start on the 25th of February and will be listing in March. It is estimated to be raising about US$380m.
Accuracy Rate:
Our overall accuracy rate is 72% for IPOs and 63.8% for Placements
(Performance measurement criteria is explained at the end of the note)
New IPO filings
- Edvantage Group (Hong Kong, ~US$100m)
- Koolearn (Hong Kong, re-filed)
- Shangde Qizhi Education Group (Hong Kong, re-filed)
Below is a snippet of our IPO tool showing upcoming events for the next week. The IPO tool is designed to provide readers with timely information on all IPO related events (Book open/closing, listing, initiation, lock-up expiry, etc) for all the deals that we have worked on. You can access the tool here or through the tools menu.
News on Upcoming IPOs
- China’s Sinochem Energy lets Hong Kong IPO application lapse
- India’s Cleartrip eyes IPO as it plans Gulf expansion
- Blackstone set to IPO inaugural $1 billion Reit before March
- Bursa Malaysia’s outgoing CEO says IPO pipeline for 2019 looks strong
- China to Scrap Price, Debut Gain Limits to Entice Tech IPOs
Smartkarma Community’s this week Analysis on Upcoming IPO
- Ebang IPO Preview: Balance Sheet Indicators Point to a Significant Slowdown
- Chalet Hotels IPO Review – Backed up into a Corner
- CStone Pharma IPO Preview: Mixed Prospects of Late-Stage Clinical Drug Candidates
- IPO Radar: KTB Securities, the Only Korean Broker in Thailand
- Shanghai Henlius (复宏汉霖) IPO: Not an Impressive Biosimilar Portfolio
- Dreamtech: Trying for an IPO Again at a Lower Price
- Bharat Hotels Pre-IPO – Catching up with Peers
- China Tower Corp: Trading Idea Before Lock-Up Expiry
- Dexin China (德信中国) Pre-IPO – Related Party Transactions and Partial Asset Listing
List of pre-IPO Coverage on Smartkarma
5. Semiconductor Memory Business Shrinking Fast
Earnings have been announced for Intel, Samsung, SK hynix, and Western Digital, and the memory business is clearly undermining all of these companies’ earnings. In this Insight I review each of the companies to show where they are, and will explain what the future holds for them as today’s oversupply unfolds.
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