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

Delta Electronics Thailand  / Event-Driven

<ul>
<li>The reference period for the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">Stock Exchange of Thailand SET 50 Index (SET50 INDEX)</a> December 2022 Rebalance is about to come to an end.</li>
<li>With the market consultation changes confirmed as expected and the DTAC-TRUE merger likely to get delayed to 1Q CY2023, I expect 4 ADDs/DELs in December 2022. </li>
<li>
<a href="https://www.smartkarma.com/entities/ratch-group-pcl" target="_blank" data-smartkarma-citation="entities:15338:1" rel="noopener">Ratch Group PCL (RATCH TB)</a> is a potential surprise ADD and <a href="https://www.smartkarma.com/entities/irpc-pcl" target="_blank" data-smartkarma-citation="entities:19051:1" rel="noopener">IRPC PCL (IRPC TB)</a> is a potential surprise DEL out of the index changes predicted in this insight.</li>
</ul>


The reference period for the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) December 2022 Rebalance is about to come to an end.
With the market consultation changes confirmed as expected and the DTAC-TRUE merger likely to get delayed to 1Q CY2023, I expect 4 ADDs/DELs in December 2022. 

Ratch Group PCL (RATCH TB) is a potential surprise ADD and IRPC PCL (IRPC TB) is a potential surprise DEL out of the index changes predicted in this insight.


Thailand SET50 Quiddity Dec 22 Final Expectations: DTAC-TRUE Delay Could Cause RATCH-IRPC Surprise

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

<ul>
<li>The market cap review period for the December rebalance of the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">Stock Exchange of Thailand SET 50 Index (SET50 INDEX)</a> ends in 6 trading days.</li>
<li>Following the market consultation and reduction in the turnover ratio, there could be four changes to the index. The <a href="https://www.smartkarma.com/entities/total-access-communication" target="_blank" data-smartkarma-citation="entities:948:1" rel="noopener">DTAC</a>/<a href="https://www.smartkarma.com/entities/true-corp-pcl" target="_blank" data-smartkarma-citation="entities:8:1" rel="noopener">TRUE</a> merger could result in another inclusion in Q1 2023.</li>
<li>Estimated one-way turnover at the December rebalance is 8.1% and will result in a one-way trade of THB 7.4bn. More than 1x ADV to trade on most stocks.</li>
</ul>


The market cap review period for the December rebalance of the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) ends in 6 trading days.
Following the market consultation and reduction in the turnover ratio, there could be four changes to the index. The DTAC/TRUE merger could result in another inclusion in Q1 2023.
Estimated one-way turnover at the December rebalance is 8.1% and will result in a one-way trade of THB 7.4bn. More than 1x ADV to trade on most stocks.


SET50 Index Rebalance Preview: Four Potential Changes in December

Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

Pi Research

Thai Equity - Bottom-up - Equities

Leading, full-service investment firm in Thailand

Pi Securities PCL, Thailand

Pi Securities is a well known securities company with 40 years experience in the industry, serving more than 60,000 clients. We offer one - stop service providing full range of financial products and services including extensive Brokerage, Proprietary Trading (Equities and Bonds), Advisory Services, Structured Products.

Moreover, our new research team tailored for institutional clients to focus on mid to small cap of Thai equities and trading strategies. Our services offered to our premium clients also include arrangement of company or site visits to with the managements of Thai listed companies.

Note: Effective on 1 March 2022, Country Group Securities PCL changed its name to Pi Securities

Equity Bottom-Up

<ul>
<li>We downgrade to HOLD rating and cut our TP to Bt44.75(-35% from previous TP), based on 22.3xPE’23E(-0.5S.D.of 5-Year trading history).Despite 3Q22 earnings was higher than expected, our outlook for 2023</li>
<li>Analyst Meeting Details Management believes that, in 2023, the company’s revenue will grow between 5% to 10% YoY and will attain gross margin of 26% to 27% assuming</li>
<li>We believe that achieving revenue growth of 5% to 10% will be difficult considering based on a potential recession and high prolonged interest rates impacting automobile sales.</li>
</ul>


We downgrade to HOLD rating and cut our TP to Bt44.75(-35% from previous TP), based on 22.3xPE’23E(-0.5S.D.of 5-Year trading history).Despite 3Q22 earnings was higher than expected, our outlook for 2023
Analyst Meeting Details Management believes that, in 2023, the company’s revenue will grow between 5% to 10% YoY and will attain gross margin of 26% to 27% assuming
We believe that achieving revenue growth of 5% to 10% will be difficult considering based on a potential recession and high prolonged interest rates impacting automobile sales.


KCE : Recession Should Impact 2023 Growth

Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Thematic (Sector/Industry)

<div><div><div><div><ul><li>We propose a new set of global plays in accordance with the de- globalization trend, shifting the allocation toward Asia-based companies with better growth prospects than those that generate the bulk of their revenue in Western markets.</li><li>Our recommended stocks are CBG and SCGP.</li><li><div><div><p>The global economy is less synchronized than in the past, meaning that a global plays strategy should be more area focused to enhance the growth potential.</p></div></div></li></ul></div></div></div></div>

We propose a new set of global plays in accordance with the de- globalization trend, shifting the allocation toward Asia-based companies with better growth prospects than those that generate the bulk of their revenue in Western markets.Our recommended stocks are CBG and SCGP.The global economy is less synchronized than in the past, meaning that a global plays strategy should be more area focused to enhance the growth potential.

Changing Landscape for Global Plays - Shifting the Allocation of Global Plays Toward Asia

<ul>
<li>In this insight, we take a look at the potential index changes for the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">Stock Exchange of Thailand SET 50 Index (SET50 INDEX)</a> between now and the December 2022 Rebalance.</li>
<li>There is an ongoing market consultation with significant implications for constituent selection and there is also a potential intra-review change due to the DTAC-TRUE merger.</li>
<li>Based on the latest available data, there could three or four index changes during the December 2022 Rebalance depending on the outcome of the DTAC-TRUE merger.</li>
</ul>


In this insight, we take a look at the potential index changes for the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) between now and the December 2022 Rebalance.
There is an ongoing market consultation with significant implications for constituent selection and there is also a potential intra-review change due to the DTAC-TRUE merger.
Based on the latest available data, there could three or four index changes during the December 2022 Rebalance depending on the outcome of the DTAC-TRUE merger.


Thailand SET50 Quiddity Leaderboard Dec 22: BJC Is the Most Interesting Name

Thailand

KCE Electronics Public Company Limited and its subsidiaries manufacture and export single-layered, multi-layered, and double-sided printed circuit boards (PCBs) under its KCE trademark.  Multi-layered PCBs are used mainly in high technology equipment and high precision instruments.  Double-sided PCBs are used largely in telecommunication and computing equipment.

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KCE Electronics PCL (KCE TB)

Thailand SET50 Quiddity Dec 22 Final Expectations: DTAC-TRUE Delay Could Cause RATCH-IRPC Surprise

I expect 4 ADDs/DELs in the Dec 22 Rebalance. The Expected ADDs (DELTA, BJC, RATCH, and COM7) could outperform the Expected DELs (KCE, BLA, SAWAD,...

Janaghan Jeyakumar, CFA

SET50 Index Rebalance Preview: Four Potential Changes in December

Following the market consultation, there could be 4 index change in December. Estimated one-way turnover is 8.1% and will result in a one-way trade...

Brian Freitas

KCE : Recession Should Impact 2023 Growth

We downgrade to HOLD rating and cut our TP to Bt44.75 (-35% from previous TP), based on 22.3xPE’23E (-0.5S.D. of 5-Year trading history). Despite...

Pi Securities PCL, Thailand

Changing Landscape for Global Plays - Shifting the Allocation of Global Plays Toward Asia

The global economy is less synchronized than in the past, meaning that a global plays strategy should be more area focused to enhance the growth...

Krungthai XSpring

Thailand SET50 Quiddity Leaderboard Dec 22: BJC Is the Most Interesting Name

I expect RATCH to replace DTAC in the SET 50 index prior to the December Rebalance. DELTA, BJC, and COM7 could be added and KCE, BLA, and SAWAD...

Janaghan Jeyakumar, CFA

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