In today’s briefing:
- Giordano (709 HK): Cheng Family’s Underwhelming Offer
- Inflation Peaking?; ACWI, ACWI Ex-US Near Support; Many Bottoms-Up Stock Recommendations
- Korea May Continue to Fail MSCI DM Inclusion Unless Allowing for K200 Options Listing on SGX
- Socar IPO Preview
- SOCAR IPO: Another Absurd Valuation
Giordano (709 HK): Cheng Family’s Underwhelming Offer
- The Cheng family has made a voluntary conditional Offer of $1.88/share for Giordano International (709 HK).
- The Cheng’s (and concert parties) control 24.57%. The Offer is conditional on the family getting to more than 50% via tendering.
- The intention is to maintain Giordano’s listing. The Offer Price has not been declared final.
Inflation Peaking?; ACWI, ACWI Ex-US Near Support; Many Bottoms-Up Stock Recommendations
- Many indexes (ACWI-US,ACWX-US,etc.) are near support, and we could see a bear market bounce, but until these indexes reverse their downtrends and break above resistance levels, we cannot be bullish.
- On a positive note, we are starting to see signs that inflation is peaking, as commodity prices have pulled back substantially, and the Energy/Materials Sectors are under significant pressure.
- If inflation and commodity prices have indeed peaked, global equities are likely in the early stages of a bottoming process.
Korea May Continue to Fail MSCI DM Inclusion Unless Allowing for K200 Options Listing on SGX
- The KRX and the MSCI have not agreed on the full right to use the KRX indexes’ price information. This should be the essential cause of Korea’s failed DM inclusion.
- The MSCI wants to list the KOSPI 200 Options on the SGX, which the MSCI sees as a prerequisite for taking the lead in the Korean passive market.
- Suppose the government takes a forward-looking approach to this issue. In that case, we may see the K200 Options SGX listing that has a bigger market impact before DM inclusion.
Socar IPO Preview
- Socar, the largest car sharing platform in Korea, is getting ready to complete its IPO in KOSPI. The IPO base case offering size is from $120 million to $159 million.
- The IPO price range is from 34,000 won to 45,000 won. The expected market cap of the company is from 1.2 trillion won to 1.6 trillion won.
- Book building for the institutional investors starts on 1 August. Mirae Asset Securities and Samsung Securities are the lead underwriters in this IPO.
SOCAR IPO: Another Absurd Valuation
- This IPO’s valuation is the trickiest among Korea’s recent IPOs. Whether all of these ten valuation peers have high enough business relevance to SOCAR is highly doubtful.
- Whether SOCAR can evolve from a simple car sharing (or rental) operator to an in-vehicle software platform provider actually determines the success or failure of this IPO.
- However, the IPO prospectus available to us lacks the evidence to favorably judge SOCAR’s growth potential. So, I will consider taking this IPO as conservatively as possible.
Before it’s here, it’s on Smartkarma
