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 December 2023 Rebalance.</li>
<li>The HDFC/HDFC Bank Merger is expected to trigger index changes in the next few days and we take a look at our expectations for these intra-review changes.</li>
<li>Apart from that, I see no other changes for SENSEX in December 2023. However, there could be up to six changes for both BSE 100 and BSE 200.</li>
</ul>


In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, and 200 Indices in the December 2023 Rebalance.
The HDFC/HDFC Bank Merger is expected to trigger index changes in the next few days and we take a look at our expectations for these intra-review changes.
Apart from that, I see no other changes for SENSEX in December 2023. However, there could be up to six changes for both BSE 100 and BSE 200.


Quiddity Leaderboard BSE/​​​SENSEX Dec 23: HDFC Intra-Review Replacements & Other Expected Changes

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.

Thematic (Sector/Industry)

<ul>
<li>New HDFC Bank appears to have far better returns and credit metrics that large Asian peers</li>
<li>Pro-Forma amalgamation puts HDFC Bank as 2nd largest bank in Asia Pacific in market cap </li>
<li>Comparably large banks in Asia are concentrated in China, where credit metrics are opaque</li>
</ul>


New HDFC Bank appears to have far better returns and credit metrics that large Asian peers
Pro-Forma amalgamation puts HDFC Bank as 2nd largest bank in Asia Pacific in market cap 
Comparably large banks in Asia are concentrated in China, where credit metrics are opaque


HDFC Bank - Ranks 2nd After Merger Compared With Asia Pacific Banks

<ul>
<li>HDFC Ltd will merge into HDFC Bank perhaps within some weeks</li>
<li>Amalgamation presumed benefits are a long list: scale, cross-sell, funding, loan mix, etc</li>
<li>Improvements in total funding costs may be immediate and significant, beyond expectations </li>
</ul>


HDFC Ltd will merge into HDFC Bank perhaps within some weeks
Amalgamation presumed benefits are a long list: scale, cross-sell, funding, loan mix, etc
Improvements in total funding costs may be immediate and significant, beyond expectations 


HDFC Ltd - Funding Benefits Can Be Immediate, Substantial

Equity Bottom-Up

<ul>
<li>News out this morning that HDFC Bank and HDFC merger became effective 1 July </li>
<li>This occurred after the Boards approved the merger scheme on 30 June</li>
<li>Funding cost benefits, operating cost synergies, product cross-sale: major benefits</li>
</ul>


News out this morning that HDFC Bank and HDFC merger became effective 1 July 
This occurred after the Boards approved the merger scheme on 30 June
Funding cost benefits, operating cost synergies, product cross-sale: major benefits


HDFC - Amalgamated, We List Its Own Key Synergies, Which Appear Tremendous

<ul>
<li>PNLF has seen its asset growth ratchet downward, running at near 12-year lows at +2% YoY </li>
<li>Phases of ROE decline are apparent, from 12-13%, then to 9%, and now to 5-6%</li>
<li>At least, there is a rebound in profit growth in FY22, after dismal 3 years</li>
</ul>


PNLF has seen its asset growth ratchet downward, running at near 12-year lows at +2% YoY 
Phases of ROE decline are apparent, from 12-13%, then to 9%, and now to 5-6%
At least, there is a rebound in profit growth in FY22, after dismal 3 years


Panin Financial - Vanishing Growth, Falling ROE, Despite Likely Rebalancing Beneficiary

India

Housing Development Finance Corporation Ltd. HDFC provides housing finance company. The Company provides wide range of housing loans, loan for home improvement, extensions, top ups, and non housing loans and loans for non resident Indian (NRI). HDFC serves customers in India, kuwait, Singapore, Oman, UAE, and the United Kingdom.

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HDFC Limited (HDFC IN)

Quiddity Leaderboard BSE/SENSEX Dec 23: HDFC Intra-Review Replacements & Other Expected Changes

Adani Enterprises or JSW Steel Ltd could replace HDFC in SENSEX. Hindustan Aeronautics and Linde India could be the replacement names for HDFC in...

Janaghan Jeyakumar, CFA

HDFC Bank - Ranks 2nd After Merger Compared With Asia Pacific Banks

The merger is now done, and this is more relevant, highlighting now large HDFC Bank is now in Asia Pacific, not only in India.

Daniel Tabbush

HDFC Ltd - Funding Benefits Can Be Immediate, Substantial

This has more detail on the merger benefits, than the note done today and this should be seen by people, as the merger is now done, today.

Daniel Tabbush

HDFC - Amalgamated, We List Its Own Key Synergies, Which Appear Tremendous

We provide a simple list here of the merger benefits as laid out by HDFC, now that merger is done, today. The initial Insight I want to Boomerang...

Daniel Tabbush

Panin Financial - Vanishing Growth, Falling ROE, Despite Likely Rebalancing Beneficiary

PNLF shows vanishing asset growth, falling ROE, and what appears to be a continuation of this during 1Q23. Even if it is a beneficiary from index...

Daniel Tabbush

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Quiddity Leaderboard BSE/​​​SENSEX Dec 23: HDFC Intra-Review Replacements & Other Expected Changes

Adani Enterprises or JSW Steel Ltd could replace HDFC in SENSEX. Hindustan Aeronautics and Linde India could be the replacement names for HDFC in...

Janaghan Jeyakumar, CFA

HDFC Bank - Ranks 2nd After Merger Compared With Asia Pacific Banks

The merger is now done, and this is more relevant, highlighting now large HDFC Bank is now in Asia Pacific, not only in India.

Daniel Tabbush

HDFC Ltd - Funding Benefits Can Be Immediate, Substantial

This has more detail on the merger benefits, than the note done today and this should be seen by people, as the merger is now done, today.

Daniel Tabbush

HDFC - Amalgamated, We List Its Own Key Synergies, Which Appear Tremendous

We provide a simple list here of the merger benefits as laid out by HDFC, now that merger is done, today. The initial Insight I want to Boomerang...

Daniel Tabbush

Panin Financial - Vanishing Growth, Falling ROE, Despite Likely Rebalancing Beneficiary

PNLF shows vanishing asset growth, falling ROE, and what appears to be a continuation of this during 1Q23. Even if it is a beneficiary from index...

Daniel Tabbush

Quiddity Leaderboard BSE/SENSEX Dec 23: HDFC Intra-Review Replacements & Other Expected Changes