In today’s briefing:
- StubWorld: LG Corp In Unwind Territory
- Hyundai Engineering & Construction (000720 KS): Trading Points
- Parker-Hannifin/Meggitt: Ready to Fly
StubWorld: LG Corp In Unwind Territory
- A double dose of StubWorld this week, as LG Corp (003550 KS)‘s NAV discount narrowing looks to have run its course.
- Preceding my comments on LG Copr are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Hyundai Engineering & Construction (000720 KS): Trading Points
- The market seems to be focusing more on the cost risk increase than on Hyundai E&C’s sales growth following the top-line expansion of the urban renewal market.
- Instead, the market is looking forward to the possibility that Hyundai E&C’s leap forward as a nuclear power solution provider will lead to a growth premium for the share price.
- The trading point should be to target this risk when the price is peaking out from the nuclear power theme. Specifically, we need to consider a sector pair long/short setup.
Parker-Hannifin/Meggitt: Ready to Fly
- UK Secretary of State has said Parker-Hannifin has addressed competition and national security concerns over its takeover of Meggitt PLC. Public consultation is pending, after which clearance is almost sure.
- As in the case of Ultra Electronics, it would be hard to justify the UK blocking a defence deal from a company based in a key ally, in my view.
- The market believes there will be a deal. As of 29 June, gross spread is 1.25%, estimated annual return (assuming settlement on 26 October) is 3.98%.
Before it’s here, it’s on Smartkarma
