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>There was a lot of confusion around how NSE Indices would handle the <a href="https://www.smartkarma.com/entities/housing-development-finance" target="_blank" data-smartkarma-citation="entities:252:1" rel="noopener">HDFC Limited (HDFC IN)</a> / <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 (HDFCB IN)</a> merger in its indices.</li>
<li>The market consultation seeks to change the index methodology to bring it in line with other index providers. That will result in much lower turnover than the existing index methodology.</li>
<li>
<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> is a high probability add to the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index</a> possibly in the first quarter of 2023. There will also be changes to <a href="https://www.smartkarma.com/entities/nifty-next-50-index" target="_blank" data-smartkarma-citation="entities:36053:1" rel="noopener">Nifty Next 50 Index</a>.</li>
</ul>


There was a lot of confusion around how NSE Indices would handle the HDFC Limited (HDFC IN) / HDFC Bank (HDFCB IN) merger in its indices.
The market consultation seeks to change the index methodology to bring it in line with other index providers. That will result in much lower turnover than the existing index methodology.

Pidilite Industries (PIDI IN) is a high probability add to the NIFTY Index possibly in the first quarter of 2023. There will also be changes to Nifty Next 50 Index.


NIFTY Indices: HDFC/HDFCB Merger Driven Market Consultation

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

External broker reports(aggregated public sources)

HDFC securities is the best online trading platform for stocks, IPOs, mutual fund 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>Avenue Supermarts: Higher bill sizes + lower footfalls aid FMCG profitability/productivity but are a sign of more targeted shopping with little room for discovery-based purchases (courtesy inflationary pressures), which in turn make a dent on the more profitable GM &amp; apparel sales (constituted &lt;25% vs a typical run-rate of 28%).</li><li>L&amp;T Infotech: L&amp;T Infotech’s (LTI) revenue and margin came in line in Q2FY23.</li><li>ICICI Prudential Life: ICICI Prudential Life (IPRU) reported a weak APE growth (+1.7% 3-year CAGR, in line with estimates); however, VNB margins, at 31%, surprised (200bps ahead of estimates), translating into 21% YoY VNB growth.</li></ul><p><em>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.</em></p>

Avenue Supermarts: Higher bill sizes + lower footfalls aid FMCG profitability/productivity but are a sign of more targeted shopping with little room for discovery-based purchases (courtesy inflationary pressures), which in turn make a dent on the more profitable GM &amp; apparel sales (constituted &lt;25% vs a typical run-rate of 28%).L&amp;T Infotech: L&amp;T Infotech’s (LTI) revenue and margin came in line in Q2FY23.ICICI Prudential Life: ICICI Prudential Life (IPRU) reported a weak APE growth (+1.7% 3-year CAGR, in line with estimates); however, VNB margins, at 31%, surprised (200bps ahead of estimates), translating into 21% YoY VNB growth.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.

HSIE Results Daily: Avenue Supermarts, L&T Infotech, ICICI Prudential Life, Angel One

<ul>
<li>The National Company Law Tribunal (NCLT) has ordered a meeting of <a href="https://www.smartkarma.com/entities/housing-development-finance" target="_blank" data-smartkarma-citation="entities:252:1" rel="noopener">HDFC Limited</a> and <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> shareholders on 25 November to consider and approve the proposed Scheme of Amalgamation.</li>
<li>
<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> is a high probability ad hoc inclusion to the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index (NIFTY INDEX)</a> with <a href="https://www.smartkarma.com/entities/tata-power-co-ltd" target="_blank" data-smartkarma-citation="entities:15618:1" rel="noopener">Tata Power (TPWR IN)</a> a lower probability inclusion candidate.</li>
<li>
<a href="https://www.smartkarma.com/entities/tata-motors-ltd" target="_blank" data-smartkarma-citation="entities:216:1" rel="noopener">Tata Motors Ltd (TTMT IN)</a> and <a href="https://www.smartkarma.com/entities/adani-enterprises-ltd" target="_blank" data-smartkarma-citation="entities:245:1" rel="noopener">Adani Enterprises (ADE IN)</a> could be added to the <a href="https://www.smartkarma.com/entities/s-p-bse-sensex-index" target="_blank" data-smartkarma-citation="entities:31494:1" rel="noopener">SENSEX INDEX</a> in December replacing <a href="https://www.smartkarma.com/entities/housing-development-finance" target="_blank" data-smartkarma-citation="entities:252:1" rel="noopener">HDFC Limited (HDFC IN)</a> and <a href="https://www.smartkarma.com/entities/dr-reddy-s-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:16406:1" rel="noopener">Dr. Reddy's Laboratories (DRRD IN)</a>.</li>
</ul>


The National Company Law Tribunal (NCLT) has ordered a meeting of HDFC Limited and HDFC Bank shareholders on 25 November to consider and approve the proposed Scheme of Amalgamation.

Pidilite Industries (PIDI IN) is a high probability ad hoc inclusion to the NIFTY Index (NIFTY INDEX) with Tata Power (TPWR IN) a lower probability inclusion candidate.

Tata Motors Ltd (TTMT IN) and Adani Enterprises (ADE IN) could be added to the SENSEX INDEX in December replacing HDFC Limited (HDFC IN) and Dr. Reddy's Laboratories (DRRD IN).


HDFC/HDFCB Merger in the Home Stretch: Potential Changes to NIFTY50, NIFTY100 & SENSEX Indices

External broker reports(aggregated public sources), Axis Direct

Axis Direct

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.

<ul><li>The IT Services sector is expected to report resilient growth in Q2FY23 primarily led by the new large deal wins and a ramp-up of deals won in the previous quarter despite likely macroeconomic challenges.</li><li>IT spending in North America and Europe has remained robust due to strong demand for digital and cloud transformations.</li><li>We believe the said demand momentum is likely to remain intact at least for the quarter and don’t foresee any spending being cut in this quarter, at least from the large clients across geographies.</li></ul><p><em>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.</em></p>

The IT Services sector is expected to report resilient growth in Q2FY23 primarily led by the new large deal wins and a ramp-up of deals won in the previous quarter despite likely macroeconomic challenges.IT spending in North America and Europe has remained robust due to strong demand for digital and cloud transformations.We believe the said demand momentum is likely to remain intact at least for the quarter and don’t foresee any spending being cut in this quarter, at least from the large clients across geographies.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.

It & Telecom Q2fy23 Result Preview – Demand to Remain Robust

<div><div><div><div><ul><li>IT sector is expected to post resilient Q2 performance in context of the current macro environment.</li><li>Tier-1 IT is expected to deliver sequential growth in the range of 2.4% to 4% CC.</li><li>Cross currency impact severity will be similar to last quarter with -1.3% to -1.8% sequential impact for Tier-1. </li></ul></div></div></div></div><p><em>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.</em></p>

IT sector is expected to post resilient Q2 performance in context of the current macro environment.Tier-1 IT is expected to deliver sequential growth in the range of 2.4% to 4% CC.Cross currency impact severity will be similar to last quarter with -1.3% to -1.8% sequential impact for Tier-1. 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.

Information Technology - Demand Resilience

India

LTIMindtree Limited provides information technology services and solutions. The Company offers analytics and information management, enterprise integration, applications management, cloud computing, testing, and consulting services, as well as geographical information and manufacturing execution systems. LTIMindtree serves customers worldwide.

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LTIMindtree (LTIM IN)

NIFTY Indices: HDFC/HDFCB Merger Driven Market Consultation

NSE Indices' market consultation on merger/demerger treatment will significantly reduce index turnover. We expect the HDFC/HDFCB merger to complete...

Brian Freitas

HSIE Results Daily: Avenue Supermarts, L&T Infotech, ICICI Prudential Life, Angel One

Higher bill sizes + lower footfalls aid FMCG profitability/productivity but are a sign of more targeted shopping with little room for discovery...

HDFC Securities

HDFC/HDFCB Merger in the Home Stretch: Potential Changes to NIFTY50, NIFTY100 & SENSEX Indices

Approval of the scheme of amalgamation by HDFC & HDFCB shareholders on 25 Nov will trigger changes to the NIFTY and NIFTYJR in December. Sensex...

Brian Freitas

It & Telecom Q2fy23 Result Preview – Demand to Remain Robust

The IT Services sector is expected to report resilient growth in Q2FY23 primarily led by the new large deal wins and a ramp-up of deals won in the...

Axis Direct

Information Technology - Demand Resilience

IT sector is expected to post resilient Q2 performance in context of the current macro environment. Tier-1 IT is expected to deliver sequential...

HDFC Securities

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