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

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>Maintain BUY for KKP with a target price of Bt86.00. KKP’s net profit in 3Q22 came in line with expectations at Bt2.1bn, up 41% YoY (+2% QoQ).</li>
<li>3Q22 results in line with expectations KKP reported a net profit of Bt2.1bn in 3Q22,up 41% YoY (+2% QoQ). The strong YoY rise was supported by higher net interest income, </li>
<li>Net loan growth was strong at 7.1%QoQ making a 17.7%rise for 9M22.Elevated loan growth was largely due to higher demand from corporate and retail loans (auto HP and mortgage loans).</li>
</ul>


Maintain BUY for KKP with a target price of Bt86.00. KKP’s net profit in 3Q22 came in line with expectations at Bt2.1bn, up 41% YoY (+2% QoQ).
3Q22 results in line with expectations KKP reported a net profit of Bt2.1bn in 3Q22,up 41% YoY (+2% QoQ). The strong YoY rise was supported by higher net interest income, 
Net loan growth was strong at 7.1%QoQ making a 17.7%rise for 9M22.Elevated loan growth was largely due to higher demand from corporate and retail loans (auto HP and mortgage loans).


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)

<ul><li>We are optimistic about the potential recoveries of global equity markets late this year, based on the expectation that the Fed will pause its interest rate hikes and that a bull flattening of the yield curve will occur when inflation slows down.</li><li>While US inflation may remain above the Fed’s target of 2%, this is likely to be due to a time-lag effect linked to housing prices and concerns over the risk of a US economic recession.</li><li>Therefore, we have revised down our US 10Y bond yield assumption to 3.3% (vs. 3.5% previously) and our Thai 10Y bond yield estimate to 3.0% (vs. 3.3%) for 4Q22E, based on a 12M forward EPS assumption for the SET at Bt106.27/share and an expected earnings yield of 6.2%.</li></ul>

We are optimistic about the potential recoveries of global equity markets late this year, based on the expectation that the Fed will pause its interest rate hikes and that a bull flattening of the yield curve will occur when inflation slows down.While US inflation may remain above the Fed’s target of 2%, this is likely to be due to a time-lag effect linked to housing prices and concerns over the risk of a US economic recession.Therefore, we have revised down our US 10Y bond yield assumption to 3.3% (vs. 3.5% previously) and our Thai 10Y bond yield estimate to 3.0% (vs. 3.3%) for 4Q22E, based on a 12M forward EPS assumption for the SET at Bt106.27/share and an expected earnings yield of 6.2%.

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 SET has commenced a market consultation on lowering the turnover ratio level from 5% to 2% while selecting stocks to be added to and deleted from 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">SET50 INDEX</a>.</li>
<li>The change to the turnover ratio level could lead to three changes in December that result in one-way turnover of 7.44% and in a one-way trade of THB 6.79bn.</li>
<li>Separately, the <a href="https://www.smartkarma.com/entities/total-access-communication" target="_blank" data-smartkarma-citation="entities:948:1" rel="noopener">Total Access Communication (DTAC TB)</a> / <a href="https://www.smartkarma.com/entities/true-corp-pcl" target="_blank" data-smartkarma-citation="entities:8:1" rel="noopener">True Corp Pcl (TRUE TB)</a> merger could result in an ad hoc inclusion prior to the regular rebalance in December.</li>
</ul>


The SET has commenced a market consultation on lowering the turnover ratio level from 5% to 2% while selecting stocks to be added to and deleted from the SET50 INDEX.
The change to the turnover ratio level could lead to three changes in December that result in one-way turnover of 7.44% and in a one-way trade of THB 6.79bn.
Separately, the Total Access Communication (DTAC TB) / True Corp Pcl (TRUE TB) merger could result in an ad hoc inclusion prior to the regular rebalance in December.


SET50 Index: Market Consultation & DTAC/TRUE Merger Impact

<ul><li>We suggest selling JMART after we recommended buying it yesterday because the stock has fallen out of our top rankings (with the return at +0.51%).</li><li>However, long-term investors may continue holding it, with the loss-stopping point at Bt48.00.</li><li>We add KKP to the portfolio, as the stock is likely to offer a YoY increase in the dividend payment for its1H22performance, which will be made in September, after it reported 1H22 earnings of Bt4,089mn, +45.1% YoY.</li></ul>

We suggest selling JMART after we recommended buying it yesterday because the stock has fallen out of our top rankings (with the return at +0.51%).However, long-term investors may continue holding it, with the loss-stopping point at Bt48.00.We add KKP to the portfolio, as the stock is likely to offer a YoY increase in the dividend payment for its1H22performance, which will be made in September, after it reported 1H22 earnings of Bt4,089mn, +45.1% YoY.

Thailand

Kiatnakin Bank Public Company Limited provides commercial banking services including commercial, developmental, consumer, hire-purchase, and mortgage financing to its customers in Thailand. The Company also provides securities brokerage and investment advisory services.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Kiatnakin Bank (KKP 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

KKP : Steady Growth with High Dividend

Maintain BUY for KKP with a target price of Bt86.00. KKP’s net profit in 3Q22 came in line with expectations at Bt2.1bn, up 41% YoY (+2% QoQ)....

Pi Securities PCL, Thailand

4Q22E Market Outlook: SET Haven

We are optimistic about the potential recoveries of global equity markets late this year, based on the expectation that the Fed will pause its...

Krungthai XSpring

SET50 Index: Market Consultation & DTAC/TRUE Merger Impact

We look at potential index changes following SET's proposal to reduce the monthly turnover ratio from 5% to 2%. Separately, the DTAC/TRUE merger...

Brian Freitas

Big Cap Tactical Picks - August 9, 2022

We suggest selling JMART after we recommended buying it yesterday because the stock has fallen out of our top rankings (with the return at +0.51%).

Krungthai XSpring

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)