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

Housing and Urban Development Corporation Limited / Event-Driven

Housing and Urban Development Corporation Limited

<ul>
<li>We see 7 stocks moving from MidCap to LargeCap and vice versa, 17 stocks from SmallCap to MidCap, 19 stocks from MidCap to SmallCap and 2 new additions to MidCap.</li>
<li>The expected migrations from SmallCap to MidCap have outperformed the other potential migrations with all stocks moving higher over the last six months.</li>
<li>Momentum on the upward migrations could sustain as active managers reposition their portfolios. Some stocks will have passive flows over the next few months.</li>
</ul>


We see 7 stocks moving from MidCap to LargeCap and vice versa, 17 stocks from SmallCap to MidCap, 19 stocks from MidCap to SmallCap and 2 new additions to MidCap.
The expected migrations from SmallCap to MidCap have outperformed the other potential migrations with all stocks moving higher over the last six months.
Momentum on the upward migrations could sustain as active managers reposition their portfolios. Some stocks will have passive flows over the next few months.


AMFI Stock Reclassification Preview (June 2024): Potential Changes as Momentum Recovers

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

Equity Bottom-Up

<ul>
<li>There is a lot of excitement and uncertainty about the paint sector especially Asian Paints' leadership in the broader market and among analysts.</li>
<li>We interact with a couple of paint dealers across Delhi and Dimapur to gauge the sentiment on the ground.</li>
<li>While there is no denying that <a href="https://www.smartkarma.com/entities/grasim-industries-ltd" target="_blank" data-smartkarma-citation="entities:290:1" rel="noopener">Grasim Industries (GRASIM IN)</a> poses a credible threat it might be too early to write off the market leader <a href="https://www.smartkarma.com/entities/asian-paints-ltd" target="_blank" data-smartkarma-citation="entities:6354:1" rel="noopener">Asian Paints (APNT IN)</a>. </li>
</ul>


There is a lot of excitement and uncertainty about the paint sector especially Asian Paints' leadership in the broader market and among analysts.
We interact with a couple of paint dealers across Delhi and Dimapur to gauge the sentiment on the ground.
While there is no denying that Grasim Industries (GRASIM IN) poses a credible threat it might be too early to write off the market leader Asian Paints (APNT IN). 


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

<ul>
<li>Kansai Paint's shareholders aim to raise around US$291m via a secondary follow-on offering. This is a large deal to digest, at 34 days of three month ADV.  </li>
<li>The firm has also mentioned that it will conduct a share buyback of up to 8.2m shares worth approximately 3.5% of TSO or US$87.6m (JPY12bn). This will begin after settlement. </li>
<li>In this note, we will talk about the placement and run the deal through our ECM framework.</li>
</ul>


Kansai Paint's shareholders aim to raise around US$291m via a secondary follow-on offering. This is a large deal to digest, at 34 days of three month ADV.  
The firm has also mentioned that it will conduct a share buyback of up to 8.2m shares worth approximately 3.5% of TSO or US$87.6m (JPY12bn). This will begin after settlement. 
In this note, we will talk about the placement and run the deal through our ECM framework.


Kansai Paint Placement - Hardly an Outstanding First Offering Since Listing

<ul>
<li>
<a href="https://www.smartkarma.com/entities/berger-paints-india-ltd" target="_blank" data-smartkarma-citation="entities:5431:1" rel="noopener">Berger Paints India (BRGR IN)</a> / <a href="https://www.smartkarma.com/entities/pidilite-industries-ltd" target="_blank" data-smartkarma-citation="entities:20573:1" rel="noopener">Pidilite Industries (PIDI IN)</a> are exposed to similar customers but different demand dynamics offering an opportunity to build an L/S trade.</li>
<li>The valuation premium commanded by PIDI over BRGR is not justified in spite of having a similar customer base, similar growth and capital allocation profile.</li>
<li>The Price ratio of the pair BRGR/PIDI has been trading in a tight range since September 2022 and is now showing signs of breaking out of the sideway trend.</li>
</ul>



Berger Paints India (BRGR IN) / Pidilite Industries (PIDI IN) are exposed to similar customers but different demand dynamics offering an opportunity to build an L/S trade.
The valuation premium commanded by PIDI over BRGR is not justified in spite of having a similar customer base, similar growth and capital allocation profile.
The Price ratio of the pair BRGR/PIDI has been trading in a tight range since September 2022 and is now showing signs of breaking out of the sideway trend.


Berger Paints (BRGR IN) / Pidilite Industries (PIDI IN) | Fundamental Factors Back the Signal

India

Finolex Industries Limited manufactures PVC pipes and fittings, which are sold primarily to businesses in the agricultural sector.  The Company also manufactures PVC resins, which are used as raw materials for PVC pipes and fittings.

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.

Navin Fluorine International Limited manufactures fluorochemicals. The Company produces benzotrifuoride derivatives, fluoro benzene derivatives, fluoro toluene derivatives, and aliphatic fluoro compounds.

Vinati Organics Limited produces organic intermediates and monomers.

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.

Chambal Fertilisers and Chemicals Ltd. manufactures ammonia, urea, pesticides and other products for farming and other agricultural applications.  The Company also provides consulting services to farmers on their seeding programs. Chambal operates throughout India.

Chambal Fertilisers & Chemicals (CHMB IN)

Atul Limited is a diversified manufacturer of chemicals. The Company's products include agrochemicals, aromatics, cresol & its derivatives, pharmaceutical intermediates, bulk drugs and bulk chemicals. Atul also manufactures dyestuffs and colors for the textile industry.

Tata Chemicals Ltd. manufactures salt and salt by-products, alkalies and heavy chemicals, pharmaceuticals, fertilizers and agro-chemicals. The Company's salt products include common salt, pure salt and gypsum salt.  Heavy chemicals include soda ash, caustic soda and hydrochloric acid. Tata Chemicals' pharmaceuticals include bromides of ammonium, sodium, potassium and ethyl.

BASF India Limited is a diversified manufacturer of chemicals and specialty chemicals that are used in a number of industries including textiles, paper, construction and paints. The Company's products include a variety of plastics & fiber intermediates, leather auxiliaries, finishing agents, pesticides, tanning agents, dyestuffs, oil & well chemicals and dispersions.

Himadri Speciality Chemical Limited manufactures and markets chemical products, with a special emphasis on coal tar and its derivatives which consist of coal tar pitch, naphthalene and oils. The Company has diversified into corrosion protection and manufacturing coal tar based pipe coating products.

K+S AG manufactures and markets within the fertilizer division standard and speciality fertilizers to the agricultural and industrial industries worldwide. In its salt business, the company produces de-icing salt, food grade salt, industrial salt and salt for chemical use.

Hangzhou Oxygen Plant Group Co.,Ltd. manufactures industrial gas machinery products. The Company produces air separation equipment, small-scale air separation equipment, liquefied nitrogen wash cold boxes, liquefied natural gas separation equipment, and other products. Hangzhou Oxygen Plant Group markets its products worldwide.

Kumho Petrochemical Co., Ltd. manufactures synthetic rubbers, synthetic resins, and rubber chemicals.  The Company's products include styrene butadiene, acrylonitrile butadiene, polystyrene, expandable polystyrene, and antioxidant.  Kumho Petrochemical provides construction, transportation, and financial services through its subsidiaries.

Quaker Chemical Corporation produces, develops, and markets custom-formulated chemical specialty products.  The Company also provides fluid management services for manufacturers around the world, primarily in the steel, automotive, and can industries.

Kingfa Sci. & Tech. Co., Ltd. manufactures and markets modified plastic products, including fire resistant resin, reinforced resin, plastic alloy, and other related products.

ADEKA CORPORATION manufactures basic chemicals and foodstuffs.  The Company's products include resin products, insulators, and processed fat/oil products.

Zhejiang Weixing New Building Materials Co.,Ltd. develops, manufactures and sells plastic pipes.  The Company's products include poly propylene random (PPR) pipe, polyethylene (PE) pipe, high density polyethylene (HDPE) pipe, and polybutene (PB) pipe.

Zhejiang Weixing New Bldg Mtls (002372 CH)

Jiangsu Nata Opto-electronic Material Company Limited develops, manufactures and sells photoelectric new material high-purity metal organic source. The Company's main products include trimethyl gallium, trimethyl indium, and trimethyl aluminum.

Jiangsu Nata Opto Electronic Materia (300346 CH)

TOKYO OHKA KOGYO CO., LTD. manufactures photoresist for semiconductors.  The Company also manufactures printing materials and semiconductor-assembling machines.

Capro Corporation manufactures and exports caprolactam, a key raw material for nylon.  The Company's customers include nylon manufacturers such as Hyosung Corporation, Kolon Industries, and  Taekwang Industrial.  In addition, Capro also produces ammonia sulfate fertilizer for industrial and agricultural uses.

Kansai Nerolac Paints Limited manufactures paints, varnishes and enamels. The Company also fabricates synthetic resins, organic & inorganic pigments and oils. Kansai Nerolac's products are used for decorative, marine and industrial purposes.

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Kansai Nerolac Paints (KNPL 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

AMFI Stock Reclassification Preview (June 2024): Potential Changes as Momentum Recovers

We see 7 stocks moving from MidCap to LargeCap and vice versa, 17 stocks from SmallCap to MidCap, 19 stocks from MidCap to SmallCap and 2 new adds...

Brian Freitas

Asian Paints (APNT IN) | Hold Your Guns

We interact with a couple of paint dealers across Delhi, Dehradun, and Dimapur to gauge the sentiment on the ground in terms of Grasim's Paint Foray.

Pranav Bhavsar

Kansai Paint Placement - Hardly an Outstanding First Offering Since Listing

Kansai Paint's shareholders aim to raise around US$291m via a secondary follow-on offering. This is a large deal to digest, at 34 days of three...

Ethan Aw

Berger Paints (BRGR IN) / Pidilite Industries (PIDI IN) | Fundamental Factors Back the Signal

Berger Paints India (BRGR IN) / Pidilite Industries (PIDI IN) are exposed to similar customers but different demand dynamics offering an...

Pranav Bhavsar

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