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

<ul>
<li>In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, and 200 Indices in the June 2024 index rebal event.</li>
<li>
<a href="https://www.smartkarma.com/entities/wipro-ltd" target="_blank" data-smartkarma-citation="entities:15360:1" rel="noopener">Wipro Ltd (WPRO IN)</a>'s deletion from Sensex is imminent but there are question marks over the top replacement names as this involves some subjectivity.  </li>
<li>For BSE 100, <a href="https://www.smartkarma.com/entities/jio-financial-services-limited" target="_blank" data-smartkarma-citation="entities:40042:1" rel="noopener">Jio Financial Services (JIOFIN IN)</a> is a new potential ADD and that has caused major changes to the index change expectations I had previously.</li>
</ul>


In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, and 200 Indices in the June 2024 index rebal event.

Wipro Ltd (WPRO IN)'s deletion from Sensex is imminent but there are question marks over the top replacement names as this involves some subjectivity.  
For BSE 100, Jio Financial Services (JIOFIN IN) is a new potential ADD and that has caused major changes to the index change expectations I had previously.


Quiddity Leaderboard BSE/​​​​SENSEX Jun 24: Jio Financial Addition Creates New Possibilities

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

<ul>
<li>Companies in India have disclosed their shareholding pattern as of end-March in April. There are companies with significant float changes from end-September and/or end-December.</li>
<li>The changes in free float could be reflected in domestic and global indices over the next few weeks and months resulting in action from passive trackers.</li>
<li>Depending on the date that the shareholding was published, there could be 14 stocks with passive inflows from global trackers while 7 could see passive outflows in May.</li>
</ul>


Companies in India have disclosed their shareholding pattern as of end-March in April. There are companies with significant float changes from end-September and/or end-December.
The changes in free float could be reflected in domestic and global indices over the next few weeks and months resulting in action from passive trackers.
Depending on the date that the shareholding was published, there could be 14 stocks with passive inflows from global trackers while 7 could see passive outflows in May.


India: Potential Free Float Changes & Passive Flows in May

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

Equity Bottom-Up

<ul>
<li>Canara Bank has seen stunning profit expansion over the past several years </li>
<li>Lower NPLs can drive lower credit costs to support profit expansion further</li>
<li>ROE moved from 11.7% to 17.3% over the past several years</li>
</ul>


Canara Bank has seen stunning profit expansion over the past several years 
Lower NPLs can drive lower credit costs to support profit expansion further
ROE moved from 11.7% to 17.3% over the past several years


Canara Bank - Radically Lower NPLs and Sharply Expanding Net Profit

<ul>
<li>Steady and strong profit is the key features of Power Finance and this is improving during FY24.</li>
<li>ROA expansion can continue to reach and possibly surpass the peaks of FY15 and FY16 with loan volume, contained costs, better credit metrics.</li>
<li>Recent quarterly data shows better loan volume and financial assets expanding more than financial liabilities, with credit costs in reverse.</li>
</ul>


Steady and strong profit is the key features of Power Finance and this is improving during FY24.
ROA expansion can continue to reach and possibly surpass the peaks of FY15 and FY16 with loan volume, contained costs, better credit metrics.
Recent quarterly data shows better loan volume and financial assets expanding more than financial liabilities, with credit costs in reverse.


Power Finance - Largest NBFC in India, Direct Focus on Power Infrastructure, Steady, Strong Returns

<ul>
<li>
<a href="https://www.smartkarma.com/entities/canara-bank" target="_blank" data-smartkarma-citation="entities:543:1" rel="noopener">Canara Bank (CBK IN)</a> could replace <a href="https://www.smartkarma.com/entities/bandhan-bank-ltd" target="_blank" data-smartkarma-citation="entities:26705:1" rel="noopener">Bandhan Bank Ltd (BANDHAN IN)</a> in 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 (NSEBANK INDEX)</a> at the March rebalance.</li>
<li>Passive trackers will need to buy 2 days of ADV on <a href="https://www.smartkarma.com/entities/canara-bank" target="_blank" data-smartkarma-citation="entities:543:1" rel="noopener">Canara Bank (CBK IN)</a> while selling over 1 day of ADV on <a href="https://www.smartkarma.com/entities/bandhan-bank-ltd" target="_blank" data-smartkarma-citation="entities:26705:1" rel="noopener">Bandhan Bank Ltd (BANDHAN IN)</a>. </li>
<li>The impact is even higher where passives will need to buy nearly 6x delivery volumes in <a href="https://www.smartkarma.com/entities/canara-bank" target="_blank" data-smartkarma-citation="entities:543:1" rel="noopener">Canara Bank</a> and sell 3x delivery volumes in <a href="https://www.smartkarma.com/entities/bandhan-bank-ltd" target="_blank" data-smartkarma-citation="entities:26705:1" rel="noopener">Bandhan Bank Ltd</a>.</li>
</ul>



Canara Bank (CBK IN) could replace Bandhan Bank Ltd (BANDHAN IN) in the NSE Nifty Bank Index (NSEBANK INDEX) at the March rebalance.
Passive trackers will need to buy 2 days of ADV on Canara Bank (CBK IN) while selling over 1 day of ADV on Bandhan Bank Ltd (BANDHAN IN). 
The impact is even higher where passives will need to buy nearly 6x delivery volumes in Canara Bank and sell 3x delivery volumes in Bandhan Bank Ltd.


NIFTY Bank Index Rebalance Preview: Canara Bank Could Replace Bandhan Bank

India

YES BANK Limited provides banking services. The Bank offers deposits, personal loans, e-banking, trade finance, corporate, and business banking services. YES BANK serves the food and agribusiness, life sciences, healthcare, biotechnology, telecommunications, media, information technology, and infrastructure development industries in India.

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Yes Bank (YES IN)

Quiddity Leaderboard BSE/SENSEX Jun 24: Jio Financial Addition Creates New Possibilities

Wipro will be replaced by Adani Ports & S.E.Zone in the SENSEX index as expected. There will be five changes for BSE 100 which are consistent with...

Janaghan Jeyakumar, CFA

India: Potential Free Float Changes & Passive Flows in May

Changes to shareholding patterns could lead to changes in float for some stocks in local/global indices. Passive trackers will need to trade over 3...

Brian Freitas

Canara Bank - Radically Lower NPLs and Sharply Expanding Net Profit

Radically lower NPLs and sharply higher net profit can continue with benign credit costs, especially as Loss Loans are down a lot. ROE and ROA are...

Daniel Tabbush

Power Finance - Largest NBFC in India, Direct Focus on Power Infrastructure, Steady, Strong Returns

Power Finance is India's largest non-banking finance company, the only direct play on power infrastructure, including renewable energy, with good...

Daniel Tabbush

NIFTY Bank Index Rebalance Preview: Canara Bank Could Replace Bandhan Bank

Canara Bank is close to replacing Bandhan Bank in the NIFTY BANK Index in March. Passives will need to trade 5.7x delivery volume on CBK and sell...

Brian Freitas

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Quiddity Leaderboard BSE/​​​​SENSEX Jun 24: Jio Financial Addition Creates New Possibilities

Wipro will be replaced by Adani Ports & S.E.Zone in the SENSEX index as expected. There will be five changes for BSE 100 which are consistent with...

Janaghan Jeyakumar, CFA

India: Potential Free Float Changes & Passive Flows in May

Changes to shareholding patterns could lead to changes in float for some stocks in local/global indices. Passive trackers will need to trade over 3...

Brian Freitas

Canara Bank - Radically Lower NPLs and Sharply Expanding Net Profit

Radically lower NPLs and sharply higher net profit can continue with benign credit costs, especially as Loss Loans are down a lot. ROE and ROA are...

Daniel Tabbush

Power Finance - Largest NBFC in India, Direct Focus on Power Infrastructure, Steady, Strong Returns

Power Finance is India's largest non-banking finance company, the only direct play on power infrastructure, including renewable energy, with good...

Daniel Tabbush

NIFTY Bank Index Rebalance Preview: Canara Bank Could Replace Bandhan Bank

Canara Bank is close to replacing Bandhan Bank in the NIFTY BANK Index in March. Passives will need to trade 5.7x delivery volume on CBK and sell...

Brian Freitas

Quiddity Leaderboard BSE/SENSEX Jun 24: Jio Financial Addition Creates New Possibilities