In today’s briefing:
- War: What to Do?
- Mapletree (MCT & MNACT) Response to SIAS
- Russia: MSCI/FTSE Flows in Case of Deletion
- HSCEI Dividend Futures: Stay Short the 2022/23 Steepener
- IDP Education Placement – Time for Round 2 (US$700m Worth) Of the Selldown
War: What to Do?
- Ukraine – Russia war has started and markets imploded today.
- Rotation from growth to value will continue and stay invested.
- Inverse ETF and Vix should help to manage volatility in this turbulent time.
Mapletree (MCT & MNACT) Response to SIAS
- SIAS posed questions to both Mapletree Commercial Trust (MCT SP) and Mapletree North Asia Commercial Trust (MAGIC SP) (a.k.a. “MNACT”) about how the ratio was decided and deal appropriateness.
- SIAS also asked about whether the deal was absolutely necessary and whether MCT would change its mandate.
- MCT and MNACT responded with lengthy explanations, some of which didn’t answer the questions. That’s what we get til the end-March Circular. And that’s OK. The trade is the same.
Russia: MSCI/FTSE Flows in Case of Deletion
- Investment related sanctions by the US and UK Governments could lead to the deletion of some or all Russian equities from the MSCI and FTSE indices.
- Deletion from the FTSE All-World/All-Cap indices would result in an outflow of US$6.67bn, while deletion from the MSCI Standard/Small Cap indices would result in an outflow of US$15.74bn.
- The most selling will be on Gazprom PJSC (GAZP), LUKOIL (LKOH), Sberbank of Russia PJSC (SBER), MMC Norilsk Nickel PJSC (GMKN), Novatek PJSC (NVTK), Yandex (YNDX) and Tatneft PJSC (TATN).
HSCEI Dividend Futures: Stay Short the 2022/23 Steepener
- The HSCEI 2022 dividend futures are trading around our fair value. Larger than expected special dividends from oil and telecom companies could provide some upside.
- The HSCEI 2022/23 div steepener has dropped from -5 to -15 since our last Insight. We see further downside here and would look to add to shorts in the spread.
- With rising interest rates, higher inflation, higher oil prices, a slowdown could lead to a rapid repricing of dividends and there will be opportunities to buy back the spread lower.
IDP Education Placement – Time for Round 2 (US$700m Worth) Of the Selldown
- Education Australia, the largest shareholder of IDP Education, last raised around US$858m (A$1.1bn) via selling 15% of IDP Education in Aug 2021.
- The lock-up from that deal is set to expire later this month, which will result in an additional 12.5% of the company’s shares, worth US$670m (A$927m) being unlocked.
- In this note we will talk about the recent results and the upcoming lockup expiry.
Before it’s here, it’s on Smartkarma
