Antipodes Global Investment Company

Update on Share Option Event:Antipodes Global Investment Company Ltd.’s (ASX: APL) updated the market about the progress on several transactions under its ongoing listed share option event. As per the latest release, the group has issued new shares of about 3,069,721 relating to options at an exercise price of $1.10 per option. The new shares issued under the listed option will rank equally with the existing ordinary shares. Additionally, the company optionholders were already informed on 11 September 2018 via letter and email as a reminder that their option will cease trading on the October 09, 2018 and the last day to exercise them is the 15 October 2018. Moreover, the optionholders exercising before 15 October 2018 will be eligible to receive the 5.0 cents per share FY18 final dividend (50% franked) on the shares issued, if the shares are owned on the record date of 22 October 2018.

The group has been performing well since inception while the monthly NTA and investment update for August 2018 was somewhat below the benchmark. The NTA after tax as of August 2018 was recorded at $1.256, an increase of 0.4% in NTA after tax from $1.251 as on July 2018. However, the investment portfolio returns for one month as at August 2018 edged up to 1.2% but did not outperform the MSCI All Country World Net Index that rose by 3.6%.


Investment Performance (Source: Company Reports)

Meanwhile, the stock has generated a negative YTD return of 10.24% and now looks promising at current levels. In the last three months, the stock has fallen by about 3.39% and the volatile trend is continuing. Given the mix of scenario, we have a wait and watch view on the stock at the current market price of $1.140, as we await further growth catalysts that can mitigate the prevailing volatility despite decent investment performance.
 

Duxton Water

Traded at Higher PE level: Duxton Water Limited (ASX: D2O) has recently issued 750,657 fully paid ordinary shares under Dividend Reinvestment Plan at the price of $1.321 per share. On the analysis front, the group posted decent first half-year performance wherein revenue from ordinary activities was up by about 348 percent against 1HFY17, while Net profit after tax increased by 20% and amounted to about $1.17 million against $0.97 million of the prior corresponding period (PCP). The net asset value of the Company on a fair market value basis at 31 August 2018 was $1.34 per share, excluding dividend of 2.5 cents per share. The ex-dividend NAV has remained steady through August month as a result of a further 1.8% uplift in the value held through Water Entitlements, higher allocations providing more temporary water from held Water Entitlements, and an increase in the value of held allocation with higher temporary pricing across most regions.


Net Asset Value Per Share – Since Inception (Source: Company Reports)

On the other hand, the Company declared the third dividend of 2.5 cents per share, 75% franked, and it was paid on September 14, 2018 to its shareholders. This was in keeping with the Directors’ intention to pay biannual dividends. Inclusive of the September month Dividend, the Company has paid Shareholders a total of 7.2 cents plus franking since November 2017. Meanwhile, the Company’s share price has seen a downfall of 1.46% to $1.35 on 19 September 2018 and it traded at a higher PE level of 41.77x. In the last six months, it has risen 25.11% as on September 18, 2018. While there has been a splendid improvement in revenue and profit, this stock is a close watch.
 

Watermark Global Leaders Fund 

US-China Trade war could be a concern: Watermark Global Leaders Fund Limited (ASX: WGF) is a small-cap company with the market capitalization of circa $71.44 Mn as of September 19, 2018. Recently, the group has updated the market about the progress on several transactions under its ongoing buy-back event. The group indicated to buy back shares with an aggregate number of shares up to 5,998,437. As of now, the group has bought back a total of 16,33,001 shares via on-market trade for the total consideration of A$ 14,71,610.19. Recently, the group reported performance of August month wherein WGF Investment Portfolio delivered a -0.6% return in one month (as of 31 August 2018) and was moderately down by 0.7% as compared to RBA Cash Rate returns of 0.1%. It was mainly impacted by the pullback of its Consumer and Basic Industries portfolios, adverse commodity price due to the current trade war and EM concerns. Since inception, WGF Investment Portfolio generated a negative return of 2.1% against the RBA Cash Rate returns of 1.6%. On the other hand, the group delivered subdued performance in FY18 wherein revenue from ordinary activities decreased by 21% to $ 3,547,602 over the prior year. Based on the uplift in operating expenses, the company posted loss after tax for the year of $2,233,625 against the profit after tax of $ 726,721 in FY17. As at 31 August 2018, the Company’s NTA After Tax & Dividend decreased to $1.06 from $1.07 at 31 July 2018.


Portfolio Performance (Source: Company Reports)

Meanwhile, WGF stock has fallen 5.98 per cent in the past three months as on September 18, 2018 and traded at its 52-week low price. By looking at volatility in commodity prices and macro-economic factors such as US-China trade war, we believe that it will better to wait and watch this stock that trades at the current price of $0.860 as on September 19, 2018 (down 0.578% after falling about 1.7% in last six months).
 

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