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Sector reports

Below is a list of sector reports.

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27/07/2018
July 2018 Edition of Australasia Monthly Book
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Welcome to the July edition of Edison’s Australasia Monthly Book. The Asia Pacific region has continued to attract investment attention, with international funds looking for quality companies in safe jurisdictions with strong cash flow and yield. Access to information on the Asia Pacific region continues to be affected by the recently implemented European GDPR and MiFID II reforms, which have significantly changed the way that the buy-side can receive its research information. Our approach continues to improve the visibility of our client companies to potential investors, enhances liquidity and provides the opportunity to attract the widest range of potential investors and stakeholders.

Companies mentioned

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Investment Companies

07/06/2018
Listed private capital - Defining the LPC arena
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According to Preqin/McKinsey, private capital (PC) AUM has grown from $0.7tn in 2000 to $5.2tn in 2017. Private equity (PE) remains the largest subsector, but a number of other asset classes have developed rapidly over recent years, including infrastructure and private debt. The listed private capital (LPC) sector provides public market investors with access to these diverse investment opportunities. In light of LPEQ’s strategic shift to represent the LPC arena, we examine the size and scope of LPC and the opportunities it presents to investors. We estimate that the European LPC arena is capitalised at £130bn and offers an attractive risk-reward profile compared to traditional listed investments.

Companies mentioned
LPEQ

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Technology

17/05/2018
UK gaming sector: Regulator delivers a harsh verdict
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After many months of procrastination, the UK government has finally delivered a verdict on the fixed odds betting terminals (FOBTs), reducing stake limits from £100 to £2. Although not entirely a surprise, this is a disappointing result for the industry and will likely entail more than 3,500 shop closures. Also, while a decision has been made, there is still much uncertainty regarding timing and implementation. For online operators, there is a further blow, in the form of potential increases in gaming taxes at the next budget. This confirms recent speculation and is now widely expected to increase from 15% to 20%.

Companies mentioned
Rank Group , GVC Holdings , Stride Gaming , JPJ Group plc , See more..., GVC, Jackpotjoy plc, Rank Group, Stride Gaming

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Oil & Gas

20/04/2018
Exploration watch: 2018 exploration wells
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Worldwide exploration levels remain low compared to the 2014 peak and in 2018 are not expected to increase significantly from 2017. Latin America dominated 2017 in terms of both discovery numbers and size, mainly due to ExxonMobil’s continuing success offshore Guyana, but also with the 400-800mmbbl Zama discovery offshore Mexico. Activity in the region is set to continue in 2018, with further drilling in Guyana and renewed efforts to prove an extension of the basin into Suriname. The largest discovery in 2017 was the 15tcf Yakaar offshore Senegal, but in 2018 the exploration focus offshore West Africa switches to Morocco and Namibia. In this Exploration watch, we highlight these wells and more that are due to be drilled in 2018 involving independent companies, and with resource estimates greater than 100mmboe.

Companies mentioned

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Oil & Gas

08/03/2018
Exploration watch: Trinidad: New energy to low cost, low risk region
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Trinidad is a well-established oil and gas producing region, with continuous production since the first field came onstream in 1902. The hydrocarbon sector has been predominantly producing gas since the 1990s and offshore gas development is dominated by the majors: BP, Shell, BHP and EOG resources. This has created an opportunity for independent companies to operate in the onshore oil fields located in the south of the island. Columbus Energy Resources (CERP), Range Resources, Touchstone Exploration and Trinity Exploration and Production all operate producing onshore oil fields, while Trinity also operates offshore in the Columbus Basin. Recent management changes or new funding at these companies has resulted in a boost to activity across assets that offer low cost, low risk development, although there are challenges in producing from older well stock in geologically complex structures.

Companies mentioned

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Investment Companies

20/02/2018
LPE sector performance: Outperforming through market uncertainty
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Investors in European-listed private equity (LPE) have been presented with two sources of uncertainty recently: disclosures in the new key information documents (KIDs) required under MiFID II and increased market volatility. In the 12 months to 9 February 2018, however, the LPX Europe Total Price Return Index (LPX) of major UK and European LPE companies returned 16% compared to 8% for the MSCI Europe index. Over the same period, the LPX total NAV return was even higher at 18%. Over 10 years the LPX returned 119% compared to 93% for MSCI Europe. Thus, LPE has continued to deliver impressive net-of-fee returns for investors.

Companies mentioned
LPEQ

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Oil & Gas

19/12/2017
Helium – Macro View
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Helium is a vital element in the manufacture of MRIs, semiconductors as well as being critical for space exploration, rocketry and high-level science. We examine the supply/demand picture for helium, examining key supply sources in the US and globally. We also summarise the reserve situation for helium and look for pricing guidance.

Companies mentioned

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Mining

16/11/2017
Mining overview: Unlocking the price to NPV discount
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Equity investors are well aware of the returns achievable in mining when markets get behind an early-stage story. This can drive share prices quickly in often wildly different directions, depending on a range of criteria, ie the size and stage of resource, commodity type, listing country, etc. For the last few years Edison has published its annual mining sector report, which assesses how markets consider and potentially value these different criteria. The analysis is not simple and we attempt to normalise for anomalies (of which there are many in mining) to develop a suite of tools that investors can use to assess the plethora of different investment options out there. Our analysis throws up interesting observations that can help companies and investors alike understand where there are opportunities for value creation, and where there are risks of value traps.

Companies mentioned