Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

Banpu Public Company Limited mines for coal and other minerals. The Company produces thermal coal and coking coal, and have expertise in open-pit and underground coal mining operations, as well as coal-fired power generation.  Banpu PCL has business bases in Thailand, Laos, Indonesia, China, Australia and Mongolia.

<ul>
<li>The SET50 index tracks the performance of the top 50 largest and most liquid names listed on the Stock Exchange of Thailand (SET).</li>
<li>In this insight, we take a look at our final expected ADDs/DELs for SET 50 during the index rebal event in December 2024.</li>
<li>We see four ADDs/DELs in December 2024. While the expected DELs list remains unchanged since last month, there is a change in our expected ADDs list.</li>
</ul>


The SET50 index tracks the performance of the top 50 largest and most liquid names listed on the Stock Exchange of Thailand (SET).
In this insight, we take a look at our final expected ADDs/DELs for SET 50 during the index rebal event in December 2024.
We see four ADDs/DELs in December 2024. While the expected DELs list remains unchanged since last month, there is a change in our expected ADDs list.


Quiddity Leaderboard SET50 Dec 24: Final Expectations; LONGs up +6% Vs SHORTs in a Month

Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Bottom-Up

HDFC Bank Ltd. offers a wide range of services to the global corporate sector. The Bank provides corporate banking and custodial services and is active in the treasury and capital markets. HDFC also markets project advisory services and capital market products such as Global Deposit Receipts, Euro currency loans, and Euro currency bonds.

<ul>
<li>A long-short strategy with <a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank</a>, <a href="https://www.smartkarma.com/entities/icici-bank-ltd" target="_blank" data-smartkarma-citation="entities:547:1" rel="noopener">ICICI Bank</a>, and <a href="https://www.smartkarma.com/entities/state-bank-of-india" target="_blank" data-smartkarma-citation="entities:160:1" rel="noopener">State Bank Of India</a> outperformed the <a href="https://www.smartkarma.com/entities/nse-nifty-bank-index" target="_blank" data-smartkarma-citation="entities:26811:1" rel="noopener">NSE Nifty Bank Index</a> by 2.1% from 21 November to present.</li>
<li>The trade is supported by strong fundamentals, institutional and systemic aspects, and favorable technical factors.</li>
<li>The strategy is market-neutral with zero correlation to the Nifty Bank Index, enhanced by the yield pick-up from shorting the futures in a contango market.</li>
</ul>


A long-short strategy with HDFC Bank, ICICI Bank, and State Bank Of India outperformed the NSE Nifty Bank Index by 2.1% from 21 November to present.
The trade is supported by strong fundamentals, institutional and systemic aspects, and favorable technical factors.
The strategy is market-neutral with zero correlation to the Nifty Bank Index, enhanced by the yield pick-up from shorting the futures in a contango market.


Banking on Success: A Long-Short Strategy for Nifty Banks

HK/China Equity Long-Short

Osbert Tang, CFA

Beijing Capital International Airport (BCIA) / Equity Bottom-Up

Beijing Capital International Airport Company Limited operates both aeronautical and non-aeronautical business in the Beijing airport.  The Company provides aircraft movement and passenger service facilities, safety and security services, fire-fighting services, and ground handling services.  In addition, Beijing Capital operates duty free and other retail shops and leases properties.

Beijing Capital International Airport (BCIA) (694 HK)

Beijing Capital International Airport (BCIA)

<ul>
<li>Long <a href="https://www.smartkarma.com/entities/beijing-capital-international-airport-bcia" target="_blank" data-smartkarma-citation="entities:10626:1" rel="noopener">Beijing Capital International Airport (BCIA) (694 HK)</a>, and short <a href="https://www.smartkarma.com/entities/air-china-ltd-h" target="_blank" data-smartkarma-citation="entities:8239:1" rel="noopener">Air China Ltd (H) (753 HK)</a> strategy should bring in good sector-neutral returns over the next 12 months. </li>
<li>BCIA will return to profit next year, fuelling the rebound of its share price. Air China, however, may face uncertainties related to stronger USD and higher-than-expected US interest rates.</li>
<li>Higher duty-free sales for BCIA should propel earnings outlook. BCIA's P/B is well below the 5-year average, while Air China has already returned to the historical average level.</li>
</ul>


Long Beijing Capital International Airport (BCIA) (694 HK), and short Air China Ltd (H) (753 HK) strategy should bring in good sector-neutral returns over the next 12 months. 
BCIA will return to profit next year, fuelling the rebound of its share price. Air China, however, may face uncertainties related to stronger USD and higher-than-expected US interest rates.
Higher duty-free sales for BCIA should propel earnings outlook. BCIA's P/B is well below the 5-year average, while Air China has already returned to the historical average level.


China Pair Trade: Long BCIA (694 HK), Short Air China (753 HK)

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Porsche Automobil Holding  / Event-Driven

Porsche Automobil Holding SE is a holding company. The Company, through its subsidiaries, offers development, production, and sale of automobiles along with financial services. Porsche operates worldwide.

<ul>
<li>Discounts to NAV of covered holdcos mainly widened during November. Discounts to NAV: C.F.Alba, 49.8% (vs. 48.7% as of 29 November); GBL, 40.6% (vs. 40.9%); Heineken Holding, 14.4% (vs. 14%); </li>
<li>Industrivärden C, 4.0% (vs. 2.4%); Investor B, 4.3% (vs. 2.8%); Porsche Automobile Holding, 29.8% (vs. 31.7%). Rio DLC spread tightened to 22.4% (vs. 22.5%).</li>
<li>What seems interesting (unchanged views): Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).</li>
</ul>


Discounts to NAV of covered holdcos mainly widened during November. Discounts to NAV: C.F.Alba, 49.8% (vs. 48.7% as of 29 November); GBL, 40.6% (vs. 40.9%); Heineken Holding, 14.4% (vs. 14%); 
Industrivärden C, 4.0% (vs. 2.4%); Investor B, 4.3% (vs. 2.8%); Porsche Automobile Holding, 29.8% (vs. 31.7%). Rio DLC spread tightened to 22.4% (vs. 22.5%).
What seems interesting (unchanged views): Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).


Selected European HoldCos and DLC: November'24 Report

Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Equity Research Firm

VAALCO Energy, Inc. acquires, explores, and develops crude oil and natural gas properties. The Company owns producing properties and conducts exploration activities in the Philippines and Gabon, and has interest in the Texas Gulf Coast area. VAALCO, through participation in a partnership, has additional international exploration interests in South and North America and Africa.

<ul><li>Vaalco’s asset portfolio combines a mix of long- and short- cycle growth opportunities in every country in which it operates.</li><li>Management sequences the capital investment cycles to ensure the company commits capital to projects that have been sufficiently derisked to avoid overcommitting and with an eye to shortening the time from investment to production.</li><li>Its budgeting process is anchored by the goal of supporting a sustainable dividend</li></ul>

Vaalco’s asset portfolio combines a mix of long- and short- cycle growth opportunities in every country in which it operates.Management sequences the capital investment cycles to ensure the company commits capital to projects that have been sufficiently derisked to avoid overcommitting and with an eye to shortening the time from investment to production.Its budgeting process is anchored by the goal of supporting a sustainable dividend

Sector/market-neutral pairs and long/short trades

Pair Trades and Long/Short Ideas
Sector/market-neutral pairs and long/short trades

Quiddity Leaderboard SET50 Dec 24: Final Expectations; LONGs up +6% Vs SHORTs in a Month

The expected ADDs have outperformed the expected DELs by 17% on average since 29th November. With the official index changes to be confirmed in the...

Janaghan Jeyakumar, CFA

Banking on Success: A Long-Short Strategy for Nifty Banks

Long-short strategy with zero correlation to the NSE Nifty Bank Index with yield pick-up. Trade rationale supported by strong fundamentals,...

Gaudenz Schneider

China Pair Trade: Long BCIA (694 HK), Short Air China (753 HK)

BCIA's profit rebound and duty-free sales recovery should drive returns, while Air China faces stronger USD and high US interest rates. These...

Osbert Tang, CFA

Selected European HoldCos and DLC: November'24 Report

Discounts to NAV of covered European holdcos mainly widened during November. What seems interesting (unchanged views): Porsche SE vs. listed assets...

Jesus Rodriguez Aguilar

VAALCO Energy, Inc.: A Busy Year Ahead

Vaalco’s asset portfolio combines a mix of long- and short- cycle growth opportunities in every country in which it operates.

Water Tower Research

Quiddity Leaderboard SET50 Dec 24: Final Expectations; LONGs up +6% Vs SHORTs in a Month

The expected ADDs have outperformed the expected DELs by 17% on average since 29th November. With the official index changes to be confirmed in the...

Janaghan Jeyakumar, CFA

Banking on Success: A Long-Short Strategy for Nifty Banks

​Long-short strategy with zero correlation to the NSE Nifty Bank Index with yield pick-up. Trade rationale supported by strong fundamentals,...

Gaudenz Schneider

China Pair Trade: Long BCIA (694 HK), Short Air China (753 HK)

​BCIA's profit rebound and duty-free sales recovery should drive returns, while Air China faces stronger USD and high US interest rates. These...

Osbert Tang, CFA

Selected European HoldCos and DLC: November'24 Report

Discounts to NAV of covered European holdcos mainly widened during November. What seems interesting (unchanged views): Porsche SE vs. listed assets...

Jesus Rodriguez Aguilar

VAALCO Energy, Inc.: A Busy Year Ahead

Vaalco’s asset portfolio combines a mix of long- and short- cycle growth opportunities in every country in which it operates.

Water Tower Research

Long-short strategy with zero correlation to the NSE Nifty Bank Index with yield pick-up. Trade rationale supported by strong fundamentals,...

BCIA's profit rebound and duty-free sales recovery should drive returns, while Air China faces stronger USD and high US interest rates. These...