In today’s briefing:
- Russia Gets the Boot from Major Indices – Minimal Impact But World’s Largest Small Sidepocket?
- IHI (7013 JP): Ukraine Puts the Spotlight on Japanese Defense Contractors
- China Infrastructure & Logistics Group (1719 HK): Unconditional MGO Now Open
Russia Gets the Boot from Major Indices – Minimal Impact But World’s Largest Small Sidepocket?
- Major global indices have decided to relegate Russia to the “standalone” and “unclassified” market status due to sanctions and restrictions on transfer/payment/clearing.
- Talk of significant flows into major non-Russia EM markets such as China, Taiwan, Korea, etc is misguided.
- Russia was a non-negligible weight in global EM a few months ago, but GDRs have fallen dramatically and Russia-listed are effectively now portfolio pocket lint.
IHI (7013 JP): Ukraine Puts the Spotlight on Japanese Defense Contractors
- IHI likely to benefit from rising defense spending as events in Ukraine serve as a wake up call to a Japan already worried about North Korea and China.
- Japan’s top maker of jet engines and solid-fuel rockets. Also geared to the recovery of commercial air traffic and auto production, and to carbon neutral technologies.
- Sales and profit recovery underway. 60% upside to 15x FY Mar-24 EPS estimate.
China Infrastructure & Logistics Group (1719 HK): Unconditional MGO Now Open
- On the 10 January, China Infrastructure & Logistics Group (1719 HK) (“CILG”) has announced a possible MGO from Hubei Ports. The Composite Doc is now out. The Offer is open.
- This transaction is an unconditional mandatory cash offer at HK$1.45/share.
- The first – and likely, last close – is the 25 March. The Offeror intends to maintain CILG’s listing.
Before it’s here, it’s on Smartkarma
