Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>In Q3FY24, <a href="https://www.smartkarma.com/entities/larsen-toubro-ltd" target="_blank" data-smartkarma-citation="entities:2499:1" rel="noopener">Larsen &amp; Toubro (LT IN)</a> witnessed order inflow of INR 760bn (up 25% YoY) bolstering the order book to INR 4.7tn at the end of December 2023.</li>
<li>Margins continued to remain under pressure in 9MFY24 due to cost pressures in legacy jobs.</li>
<li>Strong project execution and healthy order book are expected to drive future growth with margins reviving after bottoming out.</li>
</ul>


In Q3FY24, Larsen &amp; Toubro (LT IN) witnessed order inflow of INR 760bn (up 25% YoY) bolstering the order book to INR 4.7tn at the end of December 2023.
Margins continued to remain under pressure in 9MFY24 due to cost pressures in legacy jobs.
Strong project execution and healthy order book are expected to drive future growth with margins reviving after bottoming out.


Larsen & Toubro (LT IN): Order Book Remains Robust Amidst Margin Concerns

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>There were a lot of rebalance implementations in China on Friday, plus a few upcoming index changes that were announced during the week.</li>
<li>There are a lot of implementations this week, with <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI 200</a> and <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150</a> on Thursday and then others across a bunch of countries on Friday.</li>
<li>There were big inflows to <a href="https://www.smartkarma.com/entities/tracker-fund-of-hong-kong-ltd" target="_blank" data-smartkarma-citation="entities:29257:1" rel="noopener">Tracker Fund of Hong Kong (2800 HK)</a> during the week taking units outstanding to a new high. ETF inflows continue even as the market drops.</li>
</ul>


There were a lot of rebalance implementations in China on Friday, plus a few upcoming index changes that were announced during the week.
There are a lot of implementations this week, with KOSPI 200 and KOSDAQ 150 on Thursday and then others across a bunch of countries on Friday.
There were big inflows to Tracker Fund of Hong Kong (2800 HK) during the week taking units outstanding to a new high. ETF inflows continue even as the market drops.


Index Rebalance & ETF Flow Recap: NKY, TW Div+, ASX200, NZX50, Mom30, Top10EW, MVW, Rakuten Bank

<ul>
<li>There could be 18 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 28 December.</li>
<li>If all changes are on expected lines, one-way turnover is estimated at 58.2% and that will result in a one-way trade of INR 20bn (US$240m).</li>
<li>Since July, the potential adds to the index have outperformed the index and the potential deletes by a big margin. Momentum could keep the outperformance going till implementation date.</li>
</ul>


There could be 18 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 28 December.
If all changes are on expected lines, one-way turnover is estimated at 58.2% and that will result in a one-way trade of INR 20bn (US$240m).
Since July, the potential adds to the index have outperformed the index and the potential deletes by a big margin. Momentum could keep the outperformance going till implementation date.


NIFTY200 Momentum30 Index Rebalance Preview: 58% Turnover & Strong Momentum

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares MSCI Brazil Capped ETF / Technical Analysis

<ul>
<li>In our October 26, 2023 Int'l Compass we discussed our expectations for a bounce in global equities (MSCI ACWI). So far, that has been the low.</li>
<li>Then, in our November 2, 2023 report, we discussed the bullish implications of the false breakdown in MSCI ACWI (local currency), before discussing expectations for a year-end rally on Nov.16</li>
<li>We see a massive opportunity in global gold/silver miners with gold nearing multi-year breakout. Also buy opportunities: Utilities in Europe, UK, and India; Materials, Industrials, Transportation, Real Estate, and Technology</li>
</ul>


In our October 26, 2023 Int'l Compass we discussed our expectations for a bounce in global equities (MSCI ACWI). So far, that has been the low.
Then, in our November 2, 2023 report, we discussed the bullish implications of the false breakdown in MSCI ACWI (local currency), before discussing expectations for a year-end rally on Nov.16
We see a massive opportunity in global gold/silver miners with gold nearing multi-year breakout. Also buy opportunities: Utilities in Europe, UK, and India; Materials, Industrials, Transportation, Real Estate, and Technology


Bullish Outlook Intact; Upgrading Brazil to Overweight; Buying Global Gold/Silver Miners + More Buys

APAC IPOs & Placements, Aequitas Research

Ethan Aw

APAC 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

Hindustan Aeronautics  / Equity Capital Markets

<ul>
<li>The Government of India (GoI) aims to raise around US$372m (INR30.7bn) via an offer for sale of <a href="https://www.smartkarma.com/entities/hindustan-aeronautics-ltd" target="_blank" data-smartkarma-citation="entities:26747:1" rel="noopener">Hindustan Aeronautics Ltd (HNAL IN)</a> stock. </li>
<li>The floor price of INR2,450 / share is set at approximately 6.7% to Wednesday’s (22nd Mar 2023) last close. The deal represents 10.5 days of ADV. </li>
<li>In this note, we will talk about the deal dynamics and run the deal through our ECM framework.</li>
</ul>


The Government of India (GoI) aims to raise around US$372m (INR30.7bn) via an offer for sale of Hindustan Aeronautics Ltd (HNAL IN) stock. 
The floor price of INR2,450 / share is set at approximately 6.7% to Wednesday’s (22nd Mar 2023) last close. The deal represents 10.5 days of ADV. 
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.


Hindustan Aeronautics Placement - Still Running Hot on Defence Spending Focus

India

Suzlon Energy Ltd. designs, manufactures, operates, and maintains wind generating equipment.  The Company constructs large wind parks.

CG Power and Industrial Solutions Limited manufactures, distributes, installs and services electrical and allied equipment. The Company offers transformers, reactors, switchgear control equipment and accessories, industrial motors, pumps, and communication systems. CG Power and Industrial Solutions serves customers globally. 

Havells India Limited manufactures electrical products. The Company's products include building circuit protection equipment, industrial switchgears, energy meters, cables & wires, modular switches, fans and lighting products.

Alstom T&D India Limited manufactures a range of power transmission and distribution equipment. The Company builds high- and medium-voltage substations and develop technologies to manage power grids worldwide.

KEI Industries Limited manufactures cables and stainless steel wires for the building and construction, defense, telecommunications, and other industries.

ABB India Limited undertakes engineering and construction projects and manufactures heavy engineering and industrial equipment. The Company undertakes projects in the field of energy production, power transmission, transportation, process automation and pollution control. ABB India's products include pollution control equipment, switch gears and high current rectifiers.

Amara Raja Batteries Limited specializes in the manufacture of industrial and automotive batteries. The Company manufactures industrial batteries primarily for the telecom and UPS sectors. Amara Raja manufactures automotive batteries for the original equipment manufacturers and the aftermarket.

Finolex Cables Ltd. manufactures a wide range of telecommunication and electrical cables. The Company's products include flexible cables for appliances and industrial use electrification, winding wires, automobile cables, welding cables, and cables for submersible pumps. The Company also manufactures jelly filled phone cables, high frequency/radio frequency cables and PVC Sheets.

V-Guard Industries Limited produces and manufacturers stabilizers, pumps, cables, fans, and electrical and solar water heaters.

HBL Power Systems Ltd. manufactures power systems consisting of batteries and related power electronic products.  The Company makes nickel cadmium pocket plate batteries and thyristor control power convertors.  HBL's products are used in defense, railways, petrochemical, steel, power generation and telecommunication industries.

Shanghai Electric Group Company Limited manufactures power generation equipment. The Company produces and sells thermal generator set, nuclear power units, wind power equipment, power transmission and distribution equipment, and other products. Shanghai Electric Group also manufactures environmental protection equipment.

Shanghai Electric Group Company (601727 CH)

Acuity Brands, Inc. designs, produces, and distributes a full range of indoor and outdoor lighting and control systems for commercial and institutional, industrial, infrastructure, and residential applications. The Company manufactures or procures lighting products primarily in North America, Europe, and Asia.

Enphase Energy Inc. manufactures solar power solutions. The Company offers solutions to increase productivity and reliability of solar modules.

Regal Rexnord Corporation designs, manufactures, and sells electric motors and controls. The Company offers gearboxes, automotive transmissions, rotary cutting tools, automatic transfer switches, and electric generators. Regal Beloit markets its products to distributors, original equipment manufacturers, and end users worldwide.

Dongfang Electric Corporation Limited manufactures and sells hydro and steam power generators and AC/DC electric motors. The Company also provides repair, upgrade, maintenance, and other services for the products.

Dongfang Electric Corporation (600875 CH)

FUJI ELECTRIC CO.,LTD manufactures electric machinery and electronic devices. The Company's products include automatic vending machines, factory automation equipment, and power supplies, as well as information and electronic components such as power semiconductors and integrated circuits (ICs).

EVE Energy Co., Ltd researches, manufactures and sells lithium battery.  The Company also provides portable power source solutions.

Generac Holdings, Inc. manufactures automatic, stationary standby and portable generators.  The Company's generators serve the residential, commercial, industrial and telecommunications markets.

Fortune Electric Co., Ltd. designs, manufactures, and markets power transformers, distribution transformers, switchgears, capacitors, and distribution apparatus.

TBEA Co., Ltd. manufactures and markets electrical transformers, wires and cables, and other accessory equipment. Through its subsidiaries, the Company also develops and manages real estate.

Bharat Heavy Electricals Limited manufactures power plant equipment. The Company's products include gas turbines, generators, thermal sets, diesel shunters, turbo sets, hydro sets, power transformers, switch gears, circuit breakers and boilers. The Company also manufactures compressors, valves, rectifiers, pumps, capacitors, oil rigs, as well as castings and forgings.

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Bharat Heavy Electricals (BHEL IN)

Larsen & Toubro (LT IN): Order Book Remains Robust Amidst Margin Concerns

LT reported strong order inflow in Q3FY24, but margins remained under pressure. Strong execution and healthy order book are expected to drive...

Tina Banerjee

Index Rebalance & ETF Flow Recap: NKY, TW Div+, ASX200, NZX50, Mom30, Top10EW, MVW, Rakuten Bank

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

NIFTY200 Momentum30 Index Rebalance Preview: 58% Turnover & Strong Momentum

There could be 18 changes for the Nifty200 Momentum30 Index resulting in 1-way turnover of 58.2% and in a 1-way trade of INR 20bn (US$240m). Adds...

Brian Freitas

Bullish Outlook Intact; Upgrading Brazil to Overweight; Buying Global Gold/Silver Miners + More Buys

Our bullish outlook on global equities $ACWI remains intact. We are also upgrading Brazil $EWZ to overweight. We continue to expect a rally into...

Vermilion Research

Hindustan Aeronautics Placement - Still Running Hot on Defence Spending Focus

The Government of India (GoI) aims to raise around US$372m (INR30.7bn) via an offer for sale of Hindustan Aeronautics Ltd (HNAL IN) stock.

Ethan Aw

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