Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Bottom-Up

<ul>
<li>A long-short strategy with <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</a>, <a href="https://www.smartkarma.com/entities/icici-bank-ltd" target="_blank" data-smartkarma-citation="entities:547:1" rel="noopener">ICICI Bank</a>, and <a href="https://www.smartkarma.com/entities/state-bank-of-india" target="_blank" data-smartkarma-citation="entities:160:1" rel="noopener">State Bank Of India</a> outperformed 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</a> by 2.1% from 21 November to present.</li>
<li>The trade is supported by strong fundamentals, institutional and systemic aspects, and favorable technical factors.</li>
<li>The strategy is market-neutral with zero correlation to the Nifty Bank Index, enhanced by the yield pick-up from shorting the futures in a contango market.</li>
</ul>


A long-short strategy with HDFC Bank, ICICI Bank, and State Bank Of India outperformed the NSE Nifty Bank Index by 2.1% from 21 November to present.
The trade is supported by strong fundamentals, institutional and systemic aspects, and favorable technical factors.
The strategy is market-neutral with zero correlation to the Nifty Bank Index, enhanced by the yield pick-up from shorting the futures in a contango market.


Banking on Success: A Long-Short Strategy for Nifty Banks

Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

<ul>
<li>In this insight, we examine the key challenges facing the sector and discuss potential paths forward for MFI-focused lenders. </li>
<li>Companies in this sector have seen sharp declines, with stocks down 45% from their 52-week highs and showing negative returns of -37% YTD.</li>
<li>Considering the Industry data, it would be fair to conclude that the pain in the industry is likely to persist.  CREDAG, SPANDANA, AUBANK, and IIB are key names to watch.</li>
</ul>


In this insight, we examine the key challenges facing the sector and discuss potential paths forward for MFI-focused lenders. 
Companies in this sector have seen sharp declines, with stocks down 45% from their 52-week highs and showing negative returns of -37% YTD.
Considering the Industry data, it would be fair to conclude that the pain in the industry is likely to persist.  CREDAG, SPANDANA, AUBANK, and IIB are key names to watch.


Navigating MFI Consumer Credit Exuberance - A Rocky Road Head

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>The <a href="https://www.smartkarma.com/entities/national-stock-exchange" target="_blank" data-smartkarma-citation="entities:23751:1" rel="noopener">National Stock Exchange (NSEIN IN)</a> has announced a list of 45 stocks that will be added to the Futures &amp; Options (F&amp;O) segment of the market from 29 November.</li>
<li>There will be changes to the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index</a>, <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</a>, <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</a> and the CNXIT Index over the next couple of rebalances.</li>
<li>There are some interesting situations out there, including a change to the universe 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> that could lead to more changes. </li>
</ul>


The National Stock Exchange (NSEIN IN) has announced a list of 45 stocks that will be added to the Futures &amp; Options (F&amp;O) segment of the market from 29 November.
There will be changes to the NIFTY Index, NSE Nifty Next 50 Index, S&amp;P BSE SENSEX Index and the CNXIT Index over the next couple of rebalances.
There are some interesting situations out there, including a change to the universe for the NSE Nifty Next 50 Index (NIFTYJR INDEX) that could lead to more changes. 


INDIA: Index Changes Due to the 45 New Additions to the F&O Segment

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>The December 2024 index review results for the BSE Sensex and BSE 100 Indices were announced after the close on Friday 22nd November 2024.</li>
<li>On the same day, the Bombay Stock Exchange announced several new names will be added to the Futures and Options (F&amp;O) segment resulting in multiple surprises among the index changes.</li>
<li>There will be one change for BSE Sensex and six changes for BSE 100 during the December 2024 index rebal event.</li>
</ul>


The December 2024 index review results for the BSE Sensex and BSE 100 Indices were announced after the close on Friday 22nd November 2024.
On the same day, the Bombay Stock Exchange announced several new names will be added to the Futures and Options (F&amp;O) segment resulting in multiple surprises among the index changes.
There will be one change for BSE Sensex and six changes for BSE 100 during the December 2024 index rebal event.


Quiddity BSE Dec 24 Rebal: Big Wins for Zomato & Jiofin as New F&O Inclusions Trigger Surprises

External broker reports(aggregated public sources), Axis Direct

Axis Direct

External broker reports(aggregated public sources)

Axis Direct is the flagship brand under Axis Securities Limited, a subsidiary of Axis Bank in India. 

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>The systemic credit growth (as of 20th Sep’24) continued to remain healthy at 13% YoY.</li><li>This growth continues to be led by Retail and SMEs, while corporate credit continues to remain sluggish.</li><li>The deceleration in credit growth is most likely primarily amongst the private sector banks as they aim to reduce their LDR and maintain them at balance levels. </li></ul>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.

The systemic credit growth (as of 20th Sep’24) continued to remain healthy at 13% YoY.This growth continues to be led by Retail and SMEs, while corporate credit continues to remain sluggish.The deceleration in credit growth is most likely primarily amongst the private sector banks as they aim to reduce their LDR and maintain them at balance levels. 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.

Q2FY25 Earnings Preview - Banks, Financial Services and Insurance

India

IDFC First Bank Limited provides a full range of commercial banking services for retail and institutional customers. The Bank offers fixed deposits, debit cards, savings account, cash management, and other services. IDFC Bank serves its customers in India.

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IDFC First Bank Limited (IDFCBK IN)

Banking on Success: A Long-Short Strategy for Nifty Banks

Long-short strategy with zero correlation to the NSE Nifty Bank Index with yield pick-up. Trade rationale supported by strong fundamentals,...

Gaudenz Schneider

Navigating MFI Consumer Credit Exuberance - A Rocky Road Head

Insight on challenges facing MFI-focused lenders, with stocks down 45% and negative returns of -37% YTD. Key names to watch include CREDAG,...

Pranav Bhavsar

INDIA: Index Changes Due to the 45 New Additions to the F&O Segment

Futures & Options start trading on 45 new stocks in India today. Things could get interesting in the 3 Adani names where the stock prices have been...

Brian Freitas

Quiddity BSE Dec 24 Rebal: Big Wins for Zomato & Jiofin as New F&O Inclusions Trigger Surprises

We estimate one-way flows of US$285mn and US$324mn for SENSEX and BSE 100 index rebalance events in December 2024. The Inclusion/Exclusion events...

Janaghan Jeyakumar, CFA

Q2FY25 Earnings Preview - Banks, Financial Services and Insurance

Mirroring the systemic credit growth trends, we expect banks under our coverage (incl. SFBs) to register credit growth of ~14/4% YoY/QoQ.

Axis Direct

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Banking on Success: A Long-Short Strategy for Nifty Banks

​Long-short strategy with zero correlation to the NSE Nifty Bank Index with yield pick-up. Trade rationale supported by strong fundamentals,...

Gaudenz Schneider

Navigating MFI Consumer Credit Exuberance - A Rocky Road Head

​Insight on challenges facing MFI-focused lenders, with stocks down 45% and negative returns of -37% YTD. Key names to watch include CREDAG,...

Pranav Bhavsar

INDIA: Index Changes Due to the 45 New Additions to the F&O Segment

Futures & Options start trading on 45 new stocks in India today. Things could get interesting in the 3 Adani names where the stock prices have been...

Brian Freitas

Quiddity BSE Dec 24 Rebal: Big Wins for Zomato & Jiofin as New F&O Inclusions Trigger Surprises

We estimate one-way flows of US$285mn and US$324mn for SENSEX and BSE 100 index rebalance events in December 2024. The Inclusion/Exclusion events...

Janaghan Jeyakumar, CFA

Q2FY25 Earnings Preview - Banks, Financial Services and Insurance

Mirroring the systemic credit growth trends, we expect banks under our coverage (incl. SFBs) to register credit growth of ~14/4% YoY/QoQ.

Axis Direct

Long-short strategy with zero correlation to the NSE Nifty Bank Index with yield pick-up. Trade rationale supported by strong fundamentals,...

Insight on challenges facing MFI-focused lenders, with stocks down 45% and negative returns of -37% YTD. Key names to watch include CREDAG,...