In today’s briefing:
- Index Rebalance & ETF Flow Recap: NKY, JPXNK400, FTSE CH50/A50/TW50, SenseTime, Orica
- Smartkarma Corporate Webinar | First REIT: Balancing Growth and Stability
- OZ Minerals (OZL): BHP Offer Swiftly Rejected
- Softbank Group – Q1 22 Results Reaction: So Many Surprises…a Few Were Positive
- Lifestyle (1212 HK): Thomas Yau’s Scheme
- Oz Minerals Rejects BHP’s Opportunistic Foray – Expect More
- Inpex (1605 JP) – Earnings, Forecasts and a BIGLY Buyback
- EVOC’s Privatisation Offer of HK$1.75 a Case of Third Time’s the Charm?
- FTSE Japan: Potential Inclusions in March Following TSE Restructure
- Magic Empire Global: The Second Biggest Bubble in 2022
Index Rebalance & ETF Flow Recap: NKY, JPXNK400, FTSE CH50/A50/TW50, SenseTime, Orica
- The rebalances of the Philippines Stock Exchange PSEi Index (PCOMP INDEX) and NIFTY100 Index were implemented at the close on Friday.
- MSCI will announce the results of the August QIR pre-market on 12 August (Asia time). This is the last QIR to use the current methodology before we move to QCIRs.
- There were large outflows from KraneShares CSI China Internet ETF (KWEB US) during the week as investors pulled US$267m from the ETF.
Smartkarma Corporate Webinar | First REIT: Balancing Growth and Stability
For our next Corporate Webinar we are glad to welcome First REIT’s Executive Director and CEO, Tan Kok Mian, Victor.
In the upcoming webinar, Victor will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Angus Mackintosh. The Corporate Webinar will include a live Q&A session.
The Corporate Webinar will be hosted on Tuesday, 6 September 2022, 17:00 SGT.
Listed on the Singapore Exchange Securities Trading Limited on 11 December 2006, First Real Estate Investment Trust (“First REIT”) is Singapore’s first healthcare real estate investment trust. Its investment strategy encompasses a diverse portfolio of yield-accretive healthcare and healthcare-related real-estate assets in Asia.
Over the years, the Trust has successfully built a high quality and diversified asset portfolio of 31 properties comprising 16 located in Indonesia, three in Singapore and 12 in Japan. The properties are collectively valued at over S$1,253.0 million¹ as at 31 December 2021. The stable income-producing portfolio covers the full scale of healthcare real estate, including hospitals, nursing homes and other healthcare-related facilities.
First REIT is managed by First REIT Management Limited, which is 60% owned by OUE Limited and 40% owned by OUE Lippo Healthcare Limited (“OUELH”). First REIT enjoys the right-of first refusal (“ROFR”) to the pipeline of hospitals in Indonesia by PT Lippo Karawaci Tbk (“Lippo Karawaci”), Indonesia’s largest broad-based listed property company. First REIT also has another ROFR from OUELH, and the opportunities to tap on its growing healthcare network across Pan-Asia.
Corporate Webinars by Smartkarma Corporate Solutions feature discussions with IROs and Executives, discussing their companies, the challenges they face, and the opportunities in their sectors and markets.
OZ Minerals (OZL): BHP Offer Swiftly Rejected
- BHP Group Ltd (BHP AU) made a non-binding indicative proposal to acquire all shares in OZ Minerals Ltd (OZL AU) at A$25/share and was swiftly rejected.
- We feel an offer around the A$28.5-A$29/share range would get the OZ Minerals Ltd (OZL AU) Board to open up its books for due diligence.
- 3.25% of the outstanding shares have been shorted and the stock could trade higher than the BHP offer price. We’d wait for a price around A$25/share to enter.
Softbank Group – Q1 22 Results Reaction: So Many Surprises…a Few Were Positive
- Softbank posted record quarterly losses again ($23bn this time) after an aggressive writedown of private investments in the portfolio
- Vision Fund’s cumulative returns since FY17 are now less than $1bn and valuation losses for WeWork at the parent mean VF and related have lost money
- The good news is Softbank valuations are more closely aligned with reality whilst a ¥400bn buyback takes some of the sting away but tech values (and ARM) remain a risk
Lifestyle (1212 HK): Thomas Yau’s Scheme
- Thomas Yau, Lifestyle International Holdings (1212 HK)‘s controlling shareholder, is offering to take the company private by way of a Scheme at HK$5/share, a 62.3% premium to last close.
- Independent shareholders comprise 23.51% of shares out, therefore the blocking stake at the forthcoming Court Meeting is 2.351% of shares out.
- The Offer price is final. No dividends will be paid during the Offer period.
Oz Minerals Rejects BHP’s Opportunistic Foray – Expect More
- Early 8 August, OZ Minerals Ltd (OZL AU) announced it had rejected BHP Group Ltd (BHP AU)‘s indicative acquisition proposal at A$25.00/share, after BHP had bought less than 5%.
- The Board took a quick look over the weekend and decided “the Indicative Proposal significantly undervalues OZ Minerals” and rejected it out of hand.
- It has been an obvious deal for years. This may not be BHP’s last go, but they will probably need to pay more like A$30/share to get it.
Inpex (1605 JP) – Earnings, Forecasts and a BIGLY Buyback
- Today Inpex Corp (1605 JP) announced Q2 earnings (results, presentation), a revised full-year forecast due to higher crude and lower yen, an 11%-above-guidance dividend, and a big buyback.
- The buyback is for up to 120mm shares spending up to ¥120bn, to run through year-end. Practically speaking, it is limited to 80mm shares or so at current price.
- This should be a non-negligible portion of Real World Float, and I expect the buyback to have impact over the next five months.
EVOC’s Privatisation Offer of HK$1.75 a Case of Third Time’s the Charm?
- EVOC Intelligent Technology Company Limited H (2308 HK) announced a privatisation offer from Mr Chen Zhi Lie, the ultimate controlling shareholder, at HK$1.75 per H share.
- The key conditions are approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders’ rejection). There is no minimum acceptance condition.
- The offer price is final. The offer is attractive in comparison to long-term historical share prices and multiples. We think that Mr Chen’s third privatisation attempt will likely succeed.
FTSE Japan: Potential Inclusions in March Following TSE Restructure
- Stocks that migrated from the JASDAQ and Mothers Boards to the Standard Market in April will be eligible for inclusion in the FTSE All-World/All-Cap indices at the March 2023 SAIR.
- Currently, we see 4 potential inclusions to the All-World Index and 12 potential inclusions to the All-Cap Index. There are some close adds on market cap and liquidity.
- The potential adds underperformed the TOPIX Index from April to June, but there has been a significant outperformance since then.
Magic Empire Global: The Second Biggest Bubble in 2022
- Magic Empire Global (MEGL US) is the second biggest bubble in 2022, after AMTD Digital (HKD US).
- We believe there are two major reasons for MEGL’s surging share price including US retail investors’ buying frenzy post AMTD Digital and the “scarcity effect” of new Chinese IPOs.
- Sell MEGL as it makes little sense to put any of your valuable amounts of capital into this stock. The bubble has already started to burst on MEGL.
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