From Golden Eagle Retail (3308 HK), to the US Debt Ceiling, to Alibaba (BABA US) and more, here's what you need to know this week.

The Smartkarma Weekly Starter is a newsletter published every Sunday and pulls together the ten top research notes published over the last 7-days from across our platform.

In this week's edition of the Smartkarma Weekly Starter, we get a quick rundown on the top engaged insights for the week.

Start your week off on the right foot with:

Golden Eagle Retail (3308 HK): Controlling Family’s Privatisation Offer at HK$6.88

The offer price is final. The offer is reasonable particularly as the sentiment on the department store sector remains weak. This looks like a done deal.

• Golden Eagle Retail (3308 HK) disclosed a scheme privatisation offer from the controlling family at HK$6.88 per share, a 40.4% premium to the undisturbed price (HK$4.90 on 22 May).
• Key condition is approval by at least 75% of disinterested shareholders (<10% of all disinterested shareholders rejection). The shareholder with a blocking stake has provided an irrevocable.?
• The offer price is final. The offer is reasonable particularly as the sentiment on the department store sector remains weak. This looks like a done deal.?

By Arun George in Event-Driven

US Debt Ceiling Raise Tells Us Gold Is Going Up… It Must Be Part Of Every Portfolio

Agreement to raise US debt ceiling is relief to investors, but it is a major signpost of future trouble and rapid acceleration in US debt. US Fed will have to restart QE and create monetary inflation

• US debt ceiling agreement warns again about upcoming monetary inflation. Gold (and crypto) is a great hedge against monetary inflation, but less good against cost inflation
• US debt problem demands near double-digit annual growth in Fed balance sheet over next decade… QE is not dead!
• Gold could easily test US$3000/ oz. Bitcoin could do even better! Buy into any near-term weakness

By Michael J. Howell in Cross Asset Strategy

Alibaba Potential IPOs - Part 4 - An Early Look at International Operations

On 28th Mar 2023, Alibaba Group (9988 HK) announced that it would adopt a new organizational and governance structure. In this note, we take a look at its international operations.

• On 28th Mar 2023, Alibaba Group (9988 HK) announced that it would adopt a new organizational and governance structure, splitting into six major business groups and other investments.
• Alibaba also stated that each of the business groups would be set up as an independent entity with its own board and the groups will eventually seek to list.
• In our previous notes, we highlighted which divisions could list and looked at some of the divisions in more detail. In this note, we will talk about the international operations.

By Sumeet Singh in Equity Capital Markets

Nvidia Results Blow-Out: Multi-Year Growth Ahead; Wiwynn in Taiwan, Plus a Smallcap Wildcard AI Play

The company sees US$1 trillion of data center upgrades ahead. Our AI Leaders Basket constituents TSMC and ASML are rising as well.

• Nvidia's results and guidance sparked a massive rally in the shares, marking one of the largest single-day increases in market cap in U.S. stock market history.
• The company sees a multi-year growth cycle of data center upgrades ahead. Key supply chain partners TSMC and ASML are rising as well.
• Wiwynn in Taiwan should be a key winner. We also highlight a potential wildcard smallcap AI play that we will investigate further.

By Vincent Fernando, CFA in Equity Bottom-Up

Macro Watch - Here Is Why a Debt Ceiling Deal May Be NEGATIVE for Equities

AI is mana sent from heaven, while McCarthy and Biden have allegedly agreed on a debt ceiling deal. The debt ceiling deal might be negative for risk assets. Confused? Read more here.

• The debt ceiling deal marks the end of USD liquidity increases
• The US Treasury will issue bills and bonds again soon withdrawing liquidity
• Will the USD continue to surge while risk assets will suffer??

By Andreas Steno in Cross Asset Strategy

Tencent Nearing Our Buy Zone

Tencent is nearing our 302 support target with undershoot risk to sub 300, support at 290. HSI continues to trade heavy but reaching oversold levels. Lower wedge support the buy zone.

• Tencent is nearing our 302 support target with undershoot risk to sub 300, support at 290. HSI continues to trade heavy but reaching oversold levels.
• The break below 331 acted as the most recent sell trigger and will turn into resistance on the way back up. We turned bearish Tencent back in February.?
• Need to see lower price with weakening sell volumes for better buy conviction. Lower wedge support the buy zone, sync with an HSI low.

By Thomas Schroeder in Technical Analysis

Global Banks:? Positioning Deep Dive

Positioning in the Banking industry group among Global equity funds stalls after US Banking failures, but non-US sentiment is improving.

• Among active Global equity funds, exposure to Banking stocks is at the lower end of the decade long range
• Over the last 6-months, Banks experienced the largest drop in average fund weight of -0.4%, suffered fund outflows of $-1.98bn and had 40 more sellers than buyers over the period.
• The failure of SVB Financial, First Republic and Signature Bank has effected sentiment in US Banks, but elsewhere we see strong momentum in Singaporean Banks, Indonesian Banks and Indian Banks.??

By Steven Holden in Thematic (Sector/Industry)

Perfect Medical: The Perfect Opportunity to Add

Perfect Medical presents an excellent opportunity for structural growth in the beauty and aesthetics space with an 8.9%/11.8% FY23e/24e dividend yield and 20% of the market capitalization in cash.

• Perfect Medical Health's (1830 HK) share price correction seems overdone. News that COVID cases are expected to rise to over 65 million a week by June in China: the culprit.
• The stock presents an excellent opportunity to invest with a 8.9%/11.8% FY23e/24e dividend yield and 20% of the market capitalization in cash. Such excessive pessimism in this name is unwarranted.
• Catalysts for the stock would be the FY23 March-end results to be declared on June 28th, 2023.?

By Sameer Taneja in Equity Bottom-Up

NVIDIA. Yikes! Have We Missed The Boat?

Q1’23 revenues of $7.19 billion, -13% YoY but up +19% QoQ. Q2'23 outlook @ $11 billion, a ~55% QoQ increase. NVIDIA may be the gold rush, but picks and shovels will also be required..,

• Q1’23 revenues of $7.19 billion, down 13% from a year ago but up 19% sequentially and ~10% higher than the guided midpoint.
• Current quarter outlook for revenues of $11 billion, a ~55% sequential increase, sparked mayhem in the markets and sent NVIDIA’s stock soaring over 24% in after hours trading
• Don't go chasing waterfalls, there are many other ways to rise with the tide

By William Keating in Equity Bottom-Up

CSI500 Index Rebalance: Adds Starting to Outperform

There are 50 changes for the CSI500 Index in June. There are 11 overlaps with the CSI300. One-way turnover is nearly 10% and the round-trip trade nearly CNY12bn. The adds could outperform from here.

• There are 50 changes a side for the CSI Smallcap 500 Index at the upcoming rebalance that will be implemented at the close of trading on 9 June.
• One way turnover at the rebalance is estimated at 9.45% leading to a one-way trade of CNY 5.93bn. The IT and Industrials sectors gain the most index spots.
• 8 adds to the CSI 500 Index are deletes from the CSI 300 Index while 3 deletes from the CSI 500 Index are adds to the CSI 300 Index.

By Brian Freitas in Event-Driven

?? HAPPENING NEXT WEEK:

In the next installment of our Webinar Wednesdays, we go live with Smartkarma Insight Provider,?William Keating. William will be sharing with us his insights on the semiconductor industry and where it is heading. From trends in the industry, its current opportunities, and the road that lies ahead, join us as we hear more from William.

Register now: https://skr.ma/4arF

How is BHG Retail REIT capitalising on China's recovery moving forward? Find out in the upcoming webinar as Miss Chan shares with us how that is going to look like for them. She will also be joined by Smartkarma Insight Provider, Osbert Tang in a fireside chat and live Q&A session. From the trends in the industry, to developments in the space, join us in this next installment as we hear more from Miss Chan and Osbert.

Tune in on 6 June 2023, at 5 PM SGT/HKT: https://skr.ma/jBH1p

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