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>Nearly halfway through the review period, we see 10 stocks moving from MidCap to LargeCap and vice versa, and 9 stocks moving from SmallCap to MidCap and vice versa.</li>
<li>Financials are poised to be the biggest gainers in the reshuffle with 6 stocks moving from MidCap to LargeCap and 5 stocks moving from SmallCap to MidCap.</li>
<li>Over the last 6 months, stocks expected to migrate upward have outperformed stocks that are expected to migrate downward., though there has been a downward drift this year.</li>
</ul>


Nearly halfway through the review period, we see 10 stocks moving from MidCap to LargeCap and vice versa, and 9 stocks moving from SmallCap to MidCap and vice versa.
Financials are poised to be the biggest gainers in the reshuffle with 6 stocks moving from MidCap to LargeCap and 5 stocks moving from SmallCap to MidCap.
Over the last 6 months, stocks expected to migrate upward have outperformed stocks that are expected to migrate downward., though there has been a downward drift this year.


India: AMFI Stock Reclassification Preview (June 2023)

Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

<ul>
<li>SBI results were highly managed in FY 2Q22, and going forward it’s difficult for anyone to take both these results and this bank very seriously; </li>
<li>SBI reported FY 3Q22 results of INR 84.3 bn, improving INR 8.1 bn (10.6%) linked quarter. Volatility between loss provisions and operating expenses continued; and </li>
<li>Net new NPLs accelerated 18.5% annualized, and SBI’s reserves are short INR 568 tn – over five quarters of pre-tax results. </li>
</ul>


SBI results were highly managed in FY 2Q22, and going forward it’s difficult for anyone to take both these results and this bank very seriously; 
SBI reported FY 3Q22 results of INR 84.3 bn, improving INR 8.1 bn (10.6%) linked quarter. Volatility between loss provisions and operating expenses continued; and 
Net new NPLs accelerated 18.5% annualized, and SBI’s reserves are short INR 568 tn – over five quarters of pre-tax results. 


State Bank of India – Rules Don’t Apply

<ul>
<li>HDFC Ltd (HDFC.IN) [HDFC] reported FY 3Q22 results of INR 30.5 bn, decreasing INR 6.2 bn (16.9%) linked quarter basis reflecting a lack of dividends received; </li>
<li>Given the INR 4.2 bn in NCO during FY 3Q22, net new NPLs increased INR 11.7 bn or 23.3% on an annualized basis; and </li>
<li>We also find that HDFC’s reserve still needs shoring up by another INR 185 bn or over a year of PBT.   </li>
</ul>


HDFC Ltd (HDFC.IN) [HDFC] reported FY 3Q22 results of INR 30.5 bn, decreasing INR 6.2 bn (16.9%) linked quarter basis reflecting a lack of dividends received; 
Given the INR 4.2 bn in NCO during FY 3Q22, net new NPLs increased INR 11.7 bn or 23.3% on an annualized basis; and 
We also find that HDFC’s reserve still needs shoring up by another INR 185 bn or over a year of PBT.   


<ul>
<li>IndusInd reported FY 3Q22 bottom-line results improved 4.8% linked quarter, driven by stronger core revenues and a lower provision; </li>
<li>NCOs remain elevated and show no sign of abating, and net new NPLs increased 31.6% annualized; and </li>
<li>IndusInd’s reserve needs to increase closer to 75% with a shortfall of INR 30 bn – representing two quarters of pre-tax results. </li>
</ul>


IndusInd reported FY 3Q22 bottom-line results improved 4.8% linked quarter, driven by stronger core revenues and a lower provision; 
NCOs remain elevated and show no sign of abating, and net new NPLs increased 31.6% annualized; and 
IndusInd’s reserve needs to increase closer to 75% with a shortfall of INR 30 bn – representing two quarters of pre-tax results. 


<ul>
<li>ICICI reported FY 3Q22 earnings of INR 61.9 bn, increasing INR 6.8 bn (12.4%) linked quarter, driven by net interest and fee improvement and a provision cut;  </li>
<li>Net new NPLs continued to increase 11.4% on an annualized basis at FY 3Q22 versus INR 44.1 bn 43.7% at FY 3Q21; and    </li>
<li>We find that ICICI is short on reserves to the tune of INR 116 bn or just over a half year of ICICI’s core operating result. </li>
</ul>


ICICI reported FY 3Q22 earnings of INR 61.9 bn, increasing INR 6.8 bn (12.4%) linked quarter, driven by net interest and fee improvement and a provision cut;  
Net new NPLs continued to increase 11.4% on an annualized basis at FY 3Q22 versus INR 44.1 bn 43.7% at FY 3Q21; and    
We find that ICICI is short on reserves to the tune of INR 116 bn or just over a half year of ICICI’s core operating result. 


India

Indian Overseas Bank operates some 1,429 banking branches in India, as well as six branches in overseas locations.  The Group's banks provide loan and deposit schemes, Internet banking, and a full range of banking services.

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Indian Overseas Bank (IOB IN)

India: AMFI Stock Reclassification Preview (June 2023)

Nearly halfway through the review period, we see 10 stocks moving from MidCap to LargeCap and vice versa, 9 from SmallCap to MidCap and vice versa....

Brian Freitas

State Bank of India – Rules Don’t Apply

SBI: It’s difficult for anyone to take this bank very seriously. SBI reported a QOQ FY 3Q22 results increase of 10.6%, as volatility between loss...

Thomas J. Monaco

HDFC Ltd. – Lack of Conservatism

HDFC: HDFC reported FY 3Q22 results decline of 16.9% QOQ. Net new NPLs increased 23.3% on an annualized basis, and HDFC’s reserve still needs...

Thomas J. Monaco

IndusInd Bank – Stabilizing Somewhat

INDUSIND BANK: IndusInd reported FY 3Q22 bottom-line results improvement of 4.8% linked quarter, driven by stronger core revenues. NCOs remain...

Thomas J. Monaco

ICICI Bank – Continued Improvement

ICICI BANK: ICICI FY 3Q22 earnings increased 12.4% QOQ driven by net interest income and fee improvement and a provision cut. ICICI is still short...

Thomas J. Monaco

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