In this briefing:
- Quick Take: Asian LNG Spot Prices Fall Below the UK NBP Gas Price
- Semiconductor Memory Business Shrinking Fast
- The Dollar Is Already Dead
- M&A: A Round-Up of Deals in January 2019
1. Quick Take: Asian LNG Spot Prices Fall Below the UK NBP Gas Price
Asian LNG spot prices have dropped for a short time below the UK NBP gas price, reversing the established trend that sees Asian LNG offering a premium to the European LNG price benchmarks. This note takes a look at the latest trends in the LNG markets and the renewed plans unveiled by Qatar to challenge its competitors, in particular, those from the US.
2. Semiconductor Memory Business Shrinking Fast
Earnings have been announced for Intel, Samsung, SK hynix, and Western Digital, and the memory business is clearly undermining all of these companies’ earnings. In this Insight I review each of the companies to show where they are, and will explain what the future holds for them as today’s oversupply unfolds.
3. The Dollar Is Already Dead
The past year has all been about dollar strength. That is an accepted wisdom. But the truth of the matter is that the dollar averaged 93.6 on the DXY in 2018 (3 January 2018 to 31 December 2018) and, as we write, stands at 95.5. From 1 January 2015 to 1 July 2017 the DXY averaged 97.2. The dollar is not strong, even by recent history standards. Moreover, it is no longer as important as it once was in policy making terms – and neither is the Federal Reserve.
4. M&A: A Round-Up of Deals in January 2019
For the month of January, seventeen new deals were discussed on Smartkarma with an overall deal size of US$91bn, with ~81% of that figure from the Celgene Corp (CELG US) deal. This overall number does not include rumours on Nexon Gt Co Ltd (041140 KS) and Capitaland Ltd (CAPL SP)‘s acquisition of Ascendas-Singbridge. The average transaction premium was 43%, or 26% if ignoring Earthport plc (EPO LN).
New Deals | Industry | Premium | Deal Size (US$m) | Deal Type |
Australia | ||||
Healius (HLS AU) | Health Care | 33.2% | 1,402 | Scheme |
Hong Kong | ||||
New Sports Group (299 HK) | Communication Services | 3.6% | 82 | Off-Mkt |
India | ||||
Gruh Finance (GRHF IN) | Thrifts and Mortgage Finance | -7.6% | 2,974 | Scheme |
Indonesia | ||||
Bank Danamon Indonesia (BDMN IJ) | Finance | 14.9% | 4,000 | Offer |
Japan | ||||
Clarion Co Ltd (6796 JP) | Audio/infotainment | 10.5% | 1,300 | Tender offer |
Descente Ltd (8114 JP) | Retailer | 49.7% | 185 | Partial offer |
Jiec Co Ltd (4291 JP) | Info Tech | 39.3% | 52 | Tender Offer |
Kosaido Co Ltd (7868 JP) | Commercial Printing | 43.8% | 139 | Tender offer |
Shinmaywa Industries (7224 JP) | Industrials | 10.5% | 365 | Tender offer |
Veriserve Corp (3724 JP) | Info tech | 44.6% | 142 | Tender offer |
Singapore | ||||
Courts Asia Ltd (COURTS SP) | Consumer Discretionary | 34.9% | 27 | Scheme |
M1 Ltd (M1 SP) | Communication Services | 26.0% | 932 | Off-Mkt |
Pci Ltd (PCI SP) | Information Technology | 28.0% | 45 | Scheme |
Taiwan | ||||
Yungtay Engineering (1507 TT) | Industrials | 22.0% | 704 | Off-Mkt |
Europe | ||||
Earthport plc (EPO LN) | Information Technology | 340.0% | 277 | Off-Mkt |
Panalpina Welttransport Holdin (PWTN SW) | Industrials | 24.0% | 4,083 | Off-Mkt |
US | ||||
Celgene Corp (CELG US) | Health Care | 53.7% | 74,000 | Scheme |
M1 Ltd (M1 SP) is essentially an ongoing transaction; while Mastercard Inc Class A (MA US) trumped Visa Inc Class A Shares (V US)‘s December offer for Earthport. Healius (HLS AU) rejected its proposal.
Bank Danamon Indonesia (BDMN IJ) is similarly an ongoing transaction and arguably the premium is higher than 14.9%, which is based on the last close.
Directly below is a summary of ongoing M&A situations, followed by a recap of news associated with each event situation.
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