Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>As forecast, <a href="https://www.smartkarma.com/entities/tata-motors-ltd" target="_blank" data-smartkarma-citation="entities:216:1" rel="noopener">Tata Motors Ltd (TTMT IN)</a> will be added to the <a href="https://www.smartkarma.com/entities/s-p-bse-sensex-index" target="_blank" data-smartkarma-citation="entities:31494:1" rel="noopener">S&amp;P BSE SENSEX Index (SENSEX INDEX)</a> in December to replace <a href="https://www.smartkarma.com/entities/dr-reddy-s-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:16406:1" rel="noopener">Dr. Reddy's Laboratories (DRRD IN)</a>.</li>
<li>We estimate passive trackers will need to buy 2.3x ADV (7.2x delivery volume) on <a href="https://www.smartkarma.com/entities/tata-motors-ltd" target="_blank" data-smartkarma-citation="entities:216:1" rel="noopener">Tata Motors Ltd (TTMT)</a> while selling 5x ADV (10.5x delivery volume) on <a href="https://www.smartkarma.com/entities/dr-reddy-s-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:16406:1" rel="noopener">Dr. Reddy's Laboratories (DRRD)</a>. </li>
<li>The <a href="https://www.smartkarma.com/entities/housing-development-finance" target="_blank" data-smartkarma-citation="entities:252:1" rel="noopener">HDFC Limited (HDFC IN)</a> / <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 (HDFCB IN)</a> merger should see <a href="https://www.smartkarma.com/entities/adani-enterprises-ltd" target="_blank" data-smartkarma-citation="entities:245:1" rel="noopener">Adani Enterprises (ADE IN)</a> added to the <a href="https://www.smartkarma.com/entities/s-p-bse-sensex-index" target="_blank" data-smartkarma-citation="entities:31494:1" rel="noopener">S&amp;P BSE SENSEX Index (SENSEX INDEX)</a> prior to the June rebalance.</li>
</ul>


As forecast, Tata Motors Ltd (TTMT IN) will be added to the S&amp;P BSE SENSEX Index (SENSEX INDEX) in December to replace Dr. Reddy's Laboratories (DRRD IN).
We estimate passive trackers will need to buy 2.3x ADV (7.2x delivery volume) on Tata Motors Ltd (TTMT) while selling 5x ADV (10.5x delivery volume) on Dr. Reddy's Laboratories (DRRD). 
The HDFC Limited (HDFC IN) / HDFC Bank (HDFCB IN) merger should see Adani Enterprises (ADE IN) added to the S&amp;P BSE SENSEX Index (SENSEX INDEX) prior to the June rebalance.


SENSEX Dec 22 Index Rebalance: Tata Motors (TTMT) To Replace Dr Reddy (DRRD)

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cipla-ltd" target="_blank" data-smartkarma-citation="entities:3918:1" rel="noopener">Cipla Ltd (CIPLA IN)</a> is a strong play in Indian generic pharmaceutical industry, due to its niche and differentiated respiratory and peptide injectable portfolio, which has less competition.</li>
<li>The company has launched couple of complex respiratory products in the US market, which has accelerated its revenue growth. Multiple high-value launches are also lined up for this year.</li>
<li>Cipla’s India business is on a strong footing, led by core portfolio tailwind in prescription and trade generics businesses. Q2FY23 marked the sixth consecutive quarter of market beating growth.</li>
</ul>



Cipla Ltd (CIPLA IN) is a strong play in Indian generic pharmaceutical industry, due to its niche and differentiated respiratory and peptide injectable portfolio, which has less competition.
The company has launched couple of complex respiratory products in the US market, which has accelerated its revenue growth. Multiple high-value launches are also lined up for this year.
Cipla’s India business is on a strong footing, led by core portfolio tailwind in prescription and trade generics businesses. Q2FY23 marked the sixth consecutive quarter of market beating growth.


2023 High Conviction Idea: Cipla (CIPLA IN)- Complex Generics and India Business to Drive Growth

<ul>
<li>AIPL has commenced a market consultation on amending the index universe to only include stocks that are a part of the Futures &amp; Options (F&amp;O) segment of the market.</li>
<li>This is likely driven by a bunch of Adani-group companies that are at the cusp of index inclusion and are not a part of the F&amp;O market.</li>
<li>Post implementation of the change, <a href="https://www.smartkarma.com/entities/tata-motors-ltd" target="_blank" data-smartkarma-citation="entities:216:1" rel="noopener">Tata Motors Ltd (TTMT IN)</a> is a likely inclusion to the index in December, though that depends on <a href="https://www.smartkarma.com/entities/dr-reddy-s-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:16406:1" rel="noopener">Dr. Reddy's Laboratories (DRRD IN)</a> being deleted.</li>
</ul>


AIPL has commenced a market consultation on amending the index universe to only include stocks that are a part of the Futures &amp; Options (F&amp;O) segment of the market.
This is likely driven by a bunch of Adani-group companies that are at the cusp of index inclusion and are not a part of the F&amp;O market.
Post implementation of the change, Tata Motors Ltd (TTMT IN) is a likely inclusion to the index in December, though that depends on Dr. Reddy's Laboratories (DRRD IN) being deleted.


SENSEX Index Rebalance Preview: Market Consultation on Derivative Linkage & Impact

Thematic (Sector/Industry)

<ul>
<li>Most of the large Indian pharmaceutical companies have reported double-digit revenue growth in their respective U.S. business in Q1FY23. New launches are mostly offsetting the impact of price erosion.</li>
<li>Although the companies are still facing price erosion in the U.S. market, the pace has slowed down. Price erosion seems to be near its bottom.</li>
<li>
<a href="https://www.smartkarma.com/entities/dr-reddy-s-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:16406:1" rel="noopener">Dr. Reddy's Laboratories (DRRD IN)</a> and <a href="https://www.smartkarma.com/entities/zydus-lifesciences-ltd" target="_blank" data-smartkarma-citation="entities:12914:1" rel="noopener">Zydus Lifesciences Ltd (ZYDUSLIF IN)</a> remain our top picks. Aided by new launches both the companies are seeing sustainable recovery in U.S. business.</li>
</ul>


Most of the large Indian pharmaceutical companies have reported double-digit revenue growth in their respective U.S. business in Q1FY23. New launches are mostly offsetting the impact of price erosion.
Although the companies are still facing price erosion in the U.S. market, the pace has slowed down. Price erosion seems to be near its bottom.

Dr. Reddy's Laboratories (DRRD IN) and Zydus Lifesciences Ltd (ZYDUSLIF IN) remain our top picks. Aided by new launches both the companies are seeing sustainable recovery in U.S. business.


Indian Generic Pharmaceutical Companies: The US Business Is Recovering Slowly

<ul>
<li>
<a href="https://www.smartkarma.com/entities/adani-total-gas-ltd" target="_blank" data-smartkarma-citation="entities:28352:1" rel="noopener">Adani Total Gas (ATGL IN)</a>, <a href="https://www.smartkarma.com/entities/bharat-electronics-ltd" target="_blank" data-smartkarma-citation="entities:6636:1" rel="noopener">Bharat Electronics (BHE IN)</a>, <a href="https://www.smartkarma.com/entities/hindustan-aeronautics-ltd" target="_blank" data-smartkarma-citation="entities:26747:1" rel="noopener">Hindustan Aeronautics (HNAL IN)</a>, <a href="https://www.smartkarma.com/entities/indian-railway-catering-and-tourism-corporation-limited" target="_blank" data-smartkarma-citation="entities:33951:1" rel="noopener">IRCTC (IRCTC IN)</a>, <a href="https://www.smartkarma.com/entities/mphasis-ltd" target="_blank" data-smartkarma-citation="entities:7672:1" rel="noopener">Mphasis (MPHL IN)</a>, <a href="https://www.smartkarma.com/entities/motherson-sumi-systems-ltd" target="_blank" data-smartkarma-citation="entities:10662:1" rel="noopener">Samvardhana Motherson (MSS IN)</a> and <a href="https://www.smartkarma.com/entities/shree-cement-ltd" target="_blank" data-smartkarma-citation="entities:10531:1" rel="noopener">Shree Cement (SRCM IN)</a> are adds.</li>
<li>
<a href="https://www.smartkarma.com/entities/adani-enterprises-ltd" target="_blank" data-smartkarma-citation="entities:245:1" rel="noopener">Adani Enterprises (ADE IN)</a>, <a href="https://www.smartkarma.com/entities/jubilant-foodworks-ltd" target="_blank" data-smartkarma-citation="entities:986:1" rel="noopener">Jubilant Foodworks (JUBI IN)</a>, <a href="https://www.smartkarma.com/entities/lupin-ltd" target="_blank" data-smartkarma-citation="entities:17910:1" rel="noopener">Lupin (LPC IN)</a>, <a href="https://www.smartkarma.com/entities/mindtree-ltd" target="_blank" data-smartkarma-citation="entities:7297:1" rel="noopener">Mindtree (MTCL IN)</a>, <a href="https://www.smartkarma.com/entities/punjab-national-bank" target="_blank" data-smartkarma-citation="entities:542:1" rel="noopener">Punjab National Bank (PNB)</a>, <a href="https://www.smartkarma.com/entities/steel-authority-of-india" target="_blank" data-smartkarma-citation="entities:14323:1" rel="noopener">Steel Authority of India (SAIL)</a> and <a href="https://www.smartkarma.com/entities/zydus-lifesciences-ltd" target="_blank" data-smartkarma-citation="entities:12914:1" rel="noopener">Zydus Lifesciences (ZYDUSLIF IN)</a> are deletes.</li>
<li>There is significant impact on a lot of the stocks in terms of days of delivery volume to trade. Given the index is overlooked, there could be significant price movements. </li>
</ul>



Adani Total Gas (ATGL IN), Bharat Electronics (BHE IN), Hindustan Aeronautics (HNAL IN), IRCTC (IRCTC IN), Mphasis (MPHL IN), Samvardhana Motherson (MSS IN) and Shree Cement (SRCM IN) are adds.

Adani Enterprises (ADE IN), Jubilant Foodworks (JUBI IN), Lupin (LPC IN), Mindtree (MTCL IN), Punjab National Bank (PNB), Steel Authority of India (SAIL) and Zydus Lifesciences (ZYDUSLIF IN) are deletes.
There is significant impact on a lot of the stocks in terms of days of delivery volume to trade. Given the index is overlooked, there could be significant price movements. 


NIFTY NEXT50 Index Rebalance: Significant Impact for an Overlooked Index

India

Aurobindo Pharma Limited manufactures and markets oral and sterile antibiotics, antibacterials, anti-ulcerants and other generic basic drugs. Products include semi-synthetic penicillin drugs like ampicillin and amoxycillinas well as antibiotics, which include cloxacillin and dicloxacillin. The Company also manufactures formulations like astemizole, domeperidone and omeprazole.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Aurobindo Pharma (ARBP IN)

SENSEX Dec 22 Index Rebalance: Tata Motors (TTMT) To Replace Dr Reddy (DRRD)

Tata Motors will replace Dr Reddy in the Sensex at the Dec rebal. Passives will need to buy 7.2x delivery vol on TTMT; sell 10.5x on DRRD. Adani...

Brian Freitas

2023 High Conviction Idea: Cipla (CIPLA IN)- Complex Generics and India Business to Drive Growth

Cipla is a strong play on Indian pharma. Riding on a differentiated product portfolio and new launches gaining market share, Cipla is well...

Tina Banerjee

SENSEX Index Rebalance Preview: Market Consultation on Derivative Linkage & Impact

The market consultation makes derivatives linkage a necessary condition for index inclusion. That excludes a bunch of Adani group companies from...

Brian Freitas

Indian Generic Pharmaceutical Companies: The US Business Is Recovering Slowly

Indian generic pharma companies are seeing recovery in US business. Going forward, US business is expected to see accelerate revenue growth, aided...

Tina Banerjee

NIFTY NEXT50 Index Rebalance: Significant Impact for an Overlooked Index

There are 7 adds/deletes for the NIFTY NEXT50 Index. The adds have outperformed the deletes but there are significant days of delivery volume to...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)