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>With the review period nearing completion, there could be 14/15 changes for the NIFTY Midcap 150 Index at the September rebalance.</li>
<li>Estimated one-way turnover is 8.2% resulting in a one-way trade of INR 6.6bn (US$79m). With US$38bn tracking the index actively, the impact on the stocks will be much larger.</li>
<li>Performance of a long adds/short deletes trade was very good in March, and we could see a repeat over the next couple of months.</li>
</ul>


With the review period nearing completion, there could be 14/15 changes for the NIFTY Midcap 150 Index at the September rebalance.
Estimated one-way turnover is 8.2% resulting in a one-way trade of INR 6.6bn (US$79m). With US$38bn tracking the index actively, the impact on the stocks will be much larger.
Performance of a long adds/short deletes trade was very good in March, and we could see a repeat over the next couple of months.


NIFTY MIDCAP150 Index Rebalance Preview: 14 Changes & Good Performance as Actives Start Trading

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pt-avia-avian" target="_blank" data-smartkarma-citation="entities:35034:1" rel="noopener">PT Avia Avian (AVIA IJ)</a>  is looking to raise US$772m in its Indonesia IPO.</li>
<li>Avia Avian (AA) is a paint manufacturer and retailer and the market leader in Indonesia’s decorative paint and coating industry with a market share of 20% based on FY20 revenue</li>
<li>AA offered at a valuation that isn't cheap but still justifiable. We think it should trade towards 44.7x and 38.5x FY22 and FY23 P/E ratios based on selected peers’ average. </li>
</ul>



PT Avia Avian (AVIA IJ)  is looking to raise US$772m in its Indonesia IPO.
Avia Avian (AA) is a paint manufacturer and retailer and the market leader in Indonesia’s decorative paint and coating industry with a market share of 20% based on FY20 revenue
AA offered at a valuation that isn't cheap but still justifiable. We think it should trade towards 44.7x and 38.5x FY22 and FY23 P/E ratios based on selected peers’ average. 


Avia Avian IPO - Leader in Indonesia Paint Industry with Justifiable Valuation

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

External broker reports(aggregated public sources)

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Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Thematic (Sector/Industry)

<ul><li>Our discretionary universe is expected to grow by ~11% YoY in Q1FY25</li><li>However, a few exceptional names drive up the average</li><li>In retail, ex-F&amp;G and value fashion, growth pencilled in is an anaemic 6% as footfalls/demand gets impacted due to (1) the heatwave and (2) fewer wedding days</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Our discretionary universe is expected to grow by ~11% YoY in Q1FY25However, a few exceptional names drive up the averageIn retail, ex-F&amp;G and value fashion, growth pencilled in is an anaemic 6% as footfalls/demand gets impacted due to (1) the heatwave and (2) fewer wedding daysContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Consumer Discretionary: Muted Demand, Value Plays Remain Outliers

<ul>
<li>With a substantial part of the review period complete, there could potentially be 7 changes for the <a href="https://www.smartkarma.com/entities/nse-nifty-next-50-index" target="_blank" data-smartkarma-citation="entities:36053:1" rel="noopener">NSE Nifty Next 50 Index (NIFTYJR INDEX)</a> in September.</li>
<li>Estimated one-way turnover is 17.7% resulting in a one-way trade of INR 47.2bn (US$566m). 8 stocks will have over 1x ADV to trade from passive trackers.</li>
<li>There are a bunch of stocks that are potential migrations between Mid Cap and Large Cap segments in the AMFI Classification system and there will be flows from active managers.</li>
</ul>


With a substantial part of the review period complete, there could potentially be 7 changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) in September.
Estimated one-way turnover is 17.7% resulting in a one-way trade of INR 47.2bn (US$566m). 8 stocks will have over 1x ADV to trade from passive trackers.
There are a bunch of stocks that are potential migrations between Mid Cap and Large Cap segments in the AMFI Classification system and there will be flows from active managers.


NIFTY NEXT50 Index Rebalance Preview: Active Meets Passive

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

<ul>
<li>NIFTY 50 represents the 50 largest stocks listed in the National Stock Exchange (NSE) of India and the NIFTY Next 50 index tracks the next 50 largest names.</li>
<li>In this insight, we take a look at the names leading the race to become ADDs/DELs during the September 2024 index rebal event.</li>
<li>Since my last insight, we have observed a couple of important changes to candidate rankings and that has resulted in some changes to our index change expectations.</li>
</ul>


NIFTY 50 represents the 50 largest stocks listed in the National Stock Exchange (NSE) of India and the NIFTY Next 50 index tracks the next 50 largest names.
In this insight, we take a look at the names leading the race to become ADDs/DELs during the September 2024 index rebal event.
Since my last insight, we have observed a couple of important changes to candidate rankings and that has resulted in some changes to our index change expectations.


Quiddity Leaderboard NIFTY Sep 24: Multiple Changes Possible for NIFTY 50; Some New Trade Ideas

India

The Fertilisers and Chemicals Travancore Limited manufactures petrochemicals and fertilisers.  The Group's products include Ammonia, Sulphuric Acid, Phosphoric Acid, Ammonium, Urea, Caprolactam, Nitric Acid and Soda Ash.

Deepak Nitrite Limited manufactures chemicals and fertilizers. The Company's products include sodium nitrite/nitrate, nitric acid, ammonium nitrate, and Hydroxylamine Sulphate.  Deepak Nitrite's other two divisions manufacture dyes & dyestuffs and nitro aromatics.

PI Industries Limited manufactures agricultural and fine chemicals, and polymers. The Company produces fine chemicals; crop protection, plant nutrients, and seeds; and engineering plastics for use in the automobile, electrical, and home appliances industries.

Supreme Industries Limited manufactures industrial and engineered molded products and storage and material handling crates.  The Company also manufactures chemicals, multilayer sheets, multilayer films, packaging films and expanded polyethylene foam, PVC pipes and fittings, molded furniture and disposable EPS containers.

Linde India Limited manufactures and distributes oxygen, hydrogen, nitrogen, argon and specialty gas mixtures. The Company also manufactures welding electrodes, rods, fluxes, gas and electric welding equipment, as well as air separation and gas plants, cryogenic equipment and liquid oxygen explosives.

Coromandel International Ltd. manufactures fertilizers and pesticides.  The Company produces both chemical and organic fertilizers, insecticides, fungicides, herbcides, and plant biostimulant.

UPL Ltd. manufactures, distributes and exports off-patent agrochemicals. The Company also manufactures phosphorus & phosphorus-based compounds and its products include herbicides, fungicides, insecticides, fumigants and rodenticides. United Phosphorus also manufactures industrial chemicals, specialty chemicals and chloralkaline products

Castrol (India) Limited manufactures and markets automotive and industrial lubricants and specialty products. The Company's products include lubricating oils, greases and brake fluids. The Company also manufactures cable filling compounds, jellies, waxes and other items.

Solar Industries India Limited manufactures and supplies explosives and explosives accessories. The company's products include bulk, cartridge, detonators, detonating cords Pentaerythritol Tetranitrate ("PETN"), and cast boosters.

Aarti Industries Limited develops and manufactures basic bulk chemicals, dyes and pigment intermediates, pharmaceuticals and agrochemicals, rubber chemicals, surfactant intermediates, and specialty chemicals. The company sells its products in India and elsewhere throughout the world.

TORAY INDUSTRIES, INC. manufactures yarns, synthetic fibers, and man-made leather used as apparel and industrial materials.  The Company also makes chemical products such as polyester films, engineering plastics, and resin materials.  Toray develops information equipment such as electronic circuit and liquid crystal color filter.

Orica Limited is a diversified manufacturing company.  The Company produces industrial and specialty chemicals, polyethylene, surface coatings for vehicles, food and beverage flavoring and fragrances, packaging and appliances. The Company also supplies explosive and blasting services to the mining, quarrying and construction industries.

Mitsui Chemicals, Inc. manufactures and markets a variety of chemical products. The Company's products include ethylene, propylene and other petrochemicals, basic chemicals, synthetic resins, and fine chemicals.  The Company operates worldwide.

Zhejiang Huafeng Spandex Co., Ltd. manufactures and markets spandex products.

Formosa Chemicals & Fibre Corporation manufactures and markets petrochemical products, nylon fiber, and rayon staple fiber.  Formosa sells its products in Taiwan and exports to Asia.

Satelltte Chemical Co., Ltd. develops, manufactures and sells acrylic acid esters, methacrylic acids, pigment intermediates, acrylic emulsion polymers, super absorbent polymers, and other acrylic downstream products.

Balchem Corporation develops, manufactures, and markets specialty performance ingredients for the food, feed, and medical sterilization industries. The Company micro-encapsulates performance ingredients, and also repackages and markets specialty gases. Balchem sells its products through its own sales force, independent distributors, and sales agents.

TongKun Group Co., Ltd. develops, produces and sells polyester and Terylene filament.  The Company also invests in real estate, finance, business trade and education businesses.

Sichuan Tianqi Lithium Industries, Inc. develops, manufactures and sells lithium products.  The Company's products include industrial lithium carbonate, battery lithium carbonate, lithium chloride, and lithium hydroxide.

Yunnan Yuntianhua Co., Ltd. manufactures and markets fertilizers and other chemical products.  The Company's products include synthetic ammonia, urea, nitramine, pentaerythritol, sodium formate, and polyformaldehyde.  Yunnan Yuntianhua also manufactures glass fibers and lubricants.

Berger Paints India Limited manufactures and distributes paints, enamels, varnishes, and synthetic resins. The Company's products are used in home, office, factory, interiors, exteriors, metal, wood, plastic, and others.

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Berger Paints India (BRGR IN)

NIFTY MIDCAP150 Index Rebalance Preview: 14 Changes & Good Performance as Actives Start Trading

There could be 14/15 changes for the NIFTY Midcap150 Index in Sep. Apart from the passive trackers, there are huge active funds tracking the index....

Brian Freitas

Avia Avian IPO - Leader in Indonesia Paint Industry with Justifiable Valuation

PT Avia Avian (AVIA IJ) is looking to raise US$772m in its Indonesia IPO. We think that valuation is justifiable at the IPO price range.

Sumeet Singh

Consumer Discretionary: Muted Demand, Value Plays Remain Outliers

Our discretionary universe is expected to grow by ~11% YoY in Q1FY25. However, a few exceptional names drive up the average

HDFC Securities

NIFTY NEXT50 Index Rebalance Preview: Active Meets Passive

There could be 7 changes for the NIFTY NEXT50 in Sep. 2 of those changes are migrations to/from the NIFTY50. There are stocks that will have flows...

Brian Freitas

Quiddity Leaderboard NIFTY Sep 24: Multiple Changes Possible for NIFTY 50; Some New Trade Ideas

There are at least four names eligible for NIFTY 50 addition in September 2024. However, the final count ADDs and DELs will be a discretionary...

Janaghan Jeyakumar, CFA

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