Watermark Global Leaders Fund Ltd
Watermark Global Leaders Fund Ltd (Proposed ASX code: WGF) is an investment company headquartered in Sydney, Australia. The listed investment company (LIC) is a market neutral fund with an actively managed portfolio of global equities, which could be exciting in the current volatile market scenario. The company also invests in derivatives products, currencies and other instruments. The management of Watermark includes Rohan Hedley - Chairman, Tim Bolger - Chief Operating Officer, and Justin Boyd Braitling - Chief Investment Officer.
IPO Details: Watermark is looking to tap the Australian markets through the IPO route. The company is distributing shares at an issue price of $1.10 per share and the offer is expected to raise about $110 million from retail investors in Australia and New Zealand; and in the event of oversubscriptions, there is a possibility of the offer being revised upwards to $150 million. In addition, subscribers will receive one option for every share being issued under the offer. The offer is open until December 09, 2016 and trading is expected to commence from December 21, 2016. The Corporate Adviser to the company include Seed Partnerships while Taylor Collison, CommSec, Morgans, Morgan Stanley and Ord Minnett are the Joint Lead Managers.
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Portfolio Performance (Source: Company Prospectus)
Opportunity: Currently, there are very few LICs listed on the ASX which focus on international equities and with a robust long-term track record in implementing market neutral strategies having negative correlation to the stock markets, it would be interesting to see how investors react to the opportunities being offered by Watermark. This is the first locally-managed global market neutral fund in Australia and has already gone above the minimum target of $40 million in the early stages of IPO roadshow. The group is known to deliver consistent, positive returns of 10% or more through market cycles. Currency exposures and market risks are hedged away. The group offers an alternate to ‘long-only’ funds and its Long and Short portfolios will comprise a select number of securities (40 to 80 securities).
Cobalt Blue Holdings Ltd
Cobalt Blue Holdings Ltd (Proposed ASX code: COB) is a pure cobalt play, a mining company looking for opportunities to develop green energy projects to expand its strategic cobalt portfolio, including the commercially viable battery technology. The company has discovered cobalt deposits comprising of 35.7 million tonnes at the Thackaringa site which is strategically located about 25 kilometres south-east of Broken Hill and is pursuing a 100 million tonne inferred resource base before it commences mining operations at the proposed site. It is also noteworthy that all leases are 100% owned by Broken Hill Prospecting Ltd (BPL) and are subject to a farm in agreement with Cobalt Blue. Thus, COB can acquire 100% of the Thackaringa Cobalt Project over a period of time. The exploration activities conducted so far have more than doubled the resource to 35.7 million tonnes grading 0.084% cobalt for 30,000 tonnes of contained cobalt.
IPO Details: To fund its exploration and drilling program at the Thackaringa cobalt deposit, the company launched an initial public offering in November 2016, giving investors the opportunity to gain exposure to one of the world’s largest undeveloped cobalt resources. According to the proposal, Cobalt Blue is looking to raise anywhere between $8- $10 million and will offer up to 50 million shares at a price of $0.20 cents a share. The offer also comprises of loyalty options with a maximum of 12.5 million options expected to be distributed to investors in the ratio of 1:4. The exercise price of the option is $0.25 and the options will expire 3 years from the date of issue. If Cobalt Blue manages to raise the maximum expected subscription of $10 million post offer, the undiluted market capitalisation of the company will be around $17 million to $19 million. Shares of Cobalt Blue are expected to commence trading on the ASX from December 19, 2016.
Opportunity and Demand Scenario: Globally, the demand for cobalt is rising and the forecast for global consumption is expected to double by 2020, with the major market share being netted by battery manufacturers due to its long- time run properties which is particularly imperative for electrically powered automobiles. However, modest supply but robust demand is expected to lead the 2016-20 cobalt price to reach US$50,000 per tonne.
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