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

<ul>
<li>In this insight, we take a look at the potential index changes for F100 and F250 in the run up to the September 2023 Rebalance.</li>
<li>I expect four changes for F100 and seven changes for F250 based on the latest available data.</li>
<li>However, with five more trading days left for the base date and with many names lurking close to the border, the rankings can still change.</li>
</ul>


In this insight, we take a look at the potential index changes for F100 and F250 in the run up to the September 2023 Rebalance.
I expect four changes for F100 and seven changes for F250 based on the latest available data.
However, with five more trading days left for the base date and with many names lurking close to the border, the rankings can still change.


Quiddity Leaderboard F100/​​​250 Sep 23: Several Changes Including Potential Surprises

Alpha-Centric ESG Research

Kyle Rudden

ESG ratings providers take a long time to rate issuers of initial public offerings. If you go through a list of recent large IPOs (e.g., Alibaba, Chewy, Peloton, Pinterest, Saudi Aramco, Uber), you will be hard-pressed to find broad ESG coverage. There's a good explanation for that lag in ESG ratings.ESG ratings are heavily reliant on a history of public filings, and for ESG data that plugs neatly into universal ESG assessment models. IPOs offer neither history nor harmony. It's very difficult to do a thorough ESG assessment of an IPO issuer, especially when beholden to established systems.But I am not beholden to anything, something is surely better than nothing, and nothing describes the availability ESG research on <a href="https://www.smartkarma.com/entities/central-retail-corp-ltd" target="_blank" data-smartkarma-citation="entities:28240:1" rel="noopener">Central Retail (CRC TB)</a>. It's unfortunate, since CRC performs well, and the Thai bourse and cornerstone investors are among the most ESG-minded of their kind.So here's my contribution of something to offset that nothing; a first ESG view of CRC.This is a substantive ESG analysis of CRC, but it isn't exhaustive. IPOs are a unique situation. ESG metrics and their materiality evolve as IPO issuers mature. "Exhaustive" is a moving target. What matters immediately before and after an IPO isn't what matters long-term, and vice versa.My goal for this Insight is to present an initial assessment of CRC's ESG performance, profile, and material near-term risks. More comprehensive analyses will follow as additional ESG information becomes available. For now, my interest was in answer two very simple questions:<ol>
<li>
Is CRC ready for all this ESG stuff? Generally speaking, is CRC prepared for, and committed to, ESG performance and disclosure of the kind and quality expected of a public company?</li>
<li>
What should keep me up at night? Does the Board and management understand and manage CRC's primary ESG risks? Which near-term ESG risks are most probable, and most material?</li>
</ol>CRC's ESG profile is among the best I have seen for an IPO issuer; better, in fact, than many well-established listed companies. My bullish imperative is based on CRC's excellent ESG performance, and the fact that near-term ESG-related investment risks are very minimal.

ESG ratings providers take a long time to rate issuers of initial public offerings. If you go through a list of recent large IPOs (e.g., Alibaba, Chewy, Peloton, Pinterest, Saudi Aramco, Uber), you will be hard-pressed to find broad ESG coverage. There's a good explanation for that lag in ESG ratings.ESG ratings are heavily reliant on a history of public filings, and for ESG data that plugs neatly into universal ESG assessment models. IPOs offer neither history nor harmony. It's very difficult to do a thorough ESG assessment of an IPO issuer, especially when beholden to established systems.But I am not beholden to anything, something is surely better than nothing, and nothing describes the availability ESG research on Central Retail (CRC TB). It's unfortunate, since CRC performs well, and the Thai bourse and cornerstone investors are among the most ESG-minded of their kind.So here's my contribution of something to offset that nothing; a first ESG view of CRC.This is a substantive ESG analysis of CRC, but it isn't exhaustive. IPOs are a unique situation. ESG metrics and their materiality evolve as IPO issuers mature. "Exhaustive" is a moving target. What matters immediately before and after an IPO isn't what matters long-term, and vice versa.My goal for this Insight is to present an initial assessment of CRC's ESG performance, profile, and material near-term risks. More comprehensive analyses will follow as additional ESG information becomes available. For now, my interest was in answer two very simple questions:

Is CRC ready for all this ESG stuff? Generally speaking, is CRC prepared for, and committed to, ESG performance and disclosure of the kind and quality expected of a public company?

What should keep me up at night? Does the Board and management understand and manage CRC's primary ESG risks? Which near-term ESG risks are most probable, and most material?
CRC's ESG profile is among the best I have seen for an IPO issuer; better, in fact, than many well-established listed companies. My bullish imperative is based on CRC's excellent ESG performance, and the fact that near-term ESG-related investment risks are very minimal.

Central Retail: Initial ESG Assessment Is Impressive

Equity analyst UK & Europe, UK Long Short

Peter Toeman

Equity analyst UK & Europe

Accelerating Tomorrow’s Independent Research

Boost Research

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Thematic (Sector/Industry)

The UK stockmarket has enjoyed a buoyant first quarter keeping track with other developed markets. This might appear somewhat surprising given political turmoil and the existential risk posed by Brexit but it seems that investors always anticipated that Parliament would veto the most damaging "No-deal" option. In this regard investors have been more far-sighted than right-wing Conservative politicians.So where to now for FTSE100 ? The index is back to the level of early 18Q4 which seems appropriate given the anticipated economic downturn recession failed to materialise. The old adage "Sell in May and go away" comes to mind. As strategy this has worked quite well. Over the 25 years the market has been lower at the at the end of the second quarter than at the beginning 42%  of the time, producing an average return of minus 0.4%.In terms of individual companies, Tesco (which we had in the long portfolio) is amongst the top ten performers year-to-date, and Centrica (in the short portfolio) is the second worst.

The UK stockmarket has enjoyed a buoyant first quarter keeping track with other developed markets. This might appear somewhat surprising given political turmoil and the existential risk posed by Brexit but it seems that investors always anticipated that Parliament would veto the most damaging "No-deal" option. In this regard investors have been more far-sighted than right-wing Conservative politicians.So where to now for FTSE100 ? The index is back to the level of early 18Q4 which seems appropriate given the anticipated economic downturn recession failed to materialise. The old adage "Sell in May and go away" comes to mind. As strategy this has worked quite well. Over the 25 years the market has been lower at the at the end of the second quarter than at the beginning 42%  of the time, producing an average return of minus 0.4%.In terms of individual companies, Tesco (which we had in the long portfolio) is amongst the top ten performers year-to-date, and Centrica (in the short portfolio) is the second worst.

Equity Bottom-Up

The political decision to exit the European Union has unpredictable negative consequences for both the UK economy and stockmarket.  A tough market background and Brexit concerns have reduced in-flows into Wealth and Investment Management companies. This growth hiatus could last for some time.  
<h2>Hargreaves Lansdown: What does it do ?</h2>
Hargreaves Lansdown is a wealth manager and private client stockbroker with a market value of  GBP8bn. It provides the UK's largest direct to investor platform administering £86bn of investments for more than 1.1m active clients
<h2>Why is it in the Short portfolio ?</h2>
Interim figures for the 6 months to December 2018, (published 29th Jan)  mark a deterioration in operating performance brought about by adverse market conditions. Assets under administration declined and net new business was 25% down on the prior year. Earnings per share increased 4%. The share price declined 6% on the day of the results but has subsequently been stable leaving the group on a forward multiple of over 30x. Unless the retail investment market recovers quickly this premium rating may prove vulnerable. 
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/080/444/original/port%202.PNG?1551297124" class="editor-image img-responsive" data-smartkarma-image-id="80444"></figure>
<div class="content-caption">S&amp;P Capital IQ</div>

The political decision to exit the European Union has unpredictable negative consequences for both the UK economy and stockmarket.  A tough market background and Brexit concerns have reduced in-flows into Wealth and Investment Management companies. This growth hiatus could last for some time.  
Hargreaves Lansdown: What does it do ?
Hargreaves Lansdown is a wealth manager and private client stockbroker with a market value of  GBP8bn. It provides the UK's largest direct to investor platform administering £86bn of investments for more than 1.1m active clients
Why is it in the Short portfolio ?
Interim figures for the 6 months to December 2018, (published 29th Jan)  mark a deterioration in operating performance brought about by adverse market conditions. Assets under administration declined and net new business was 25% down on the prior year. Earnings per share increased 4%. The share price declined 6% on the day of the results but has subsequently been stable leaving the group on a forward multiple of over 30x. Unless the retail investment market recovers quickly this premium rating may prove vulnerable. 

S&amp;P Capital IQ

Hargreaves Lansdown (HL/:LN) No Flow, No Go

The UK's principal share index FTSE 100 closed 2018 marginally lower than its level at the start of the Millenium
 In contrast with the lackluster performance of the stockmarket, nominal GDP of the UK economy almost doubled over the period
Relative to the domestic economy FTSE 100 looks marginally undervalued which may explain the rebound seen in the first month of this year
On the other hand, courtesy of the political decision to leave the European Union, the outlook has never been more uncertain
Major structural change involving tearing up a 40 year arrangement with the UK's largest trading partner is bound to have significant and unpredictable consequences 
We offer a long/short portfolio of UK stocks designed to exploit emerging themes

The UK's principal share index FTSE 100 closed 2018 marginally lower than its level at the start of the Millenium
 In contrast with the lackluster performance of the stockmarket, nominal GDP of the UK economy almost doubled over the period
Relative to the domestic economy FTSE 100 looks marginally undervalued which may explain the rebound seen in the first month of this year
On the other hand, courtesy of the political decision to leave the European Union, the outlook has never been more uncertain
Major structural change involving tearing up a 40 year arrangement with the UK's largest trading partner is bound to have significant and unpredictable consequences 
We offer a long/short portfolio of UK stocks designed to exploit emerging themes 

FTSE 100: Twenty Years of Going Nowhere (Almost)

United Kingdom

Marks & Spencer Group PLC is a holding company. The Company, through its subsidiaries, provides retail of clothing, food and home products.

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Marks & Spencer (MKS LN)

Quiddity Leaderboard F100/250 Sep 23: Several Changes Including Potential Surprises

Newly listed Cab Payments Holdings (CABP LN) and newly eligible Breedon Aggregates (BREE LN) and Ceres Power Holdings (CWR LN) could be added to...

Janaghan Jeyakumar, CFA

Central Retail: Initial ESG Assessment Is Impressive

ESG ratings providers take a long time to rate issuers of initial public offerings. If you go through a list of recent large IPOs (e.g., Alibaba,...

Kyle Rudden

FTSE 100 Long/Short: No 2 No Deal

The UK stockmarket has enjoyed a buoyant first quarter keeping track with other developed markets. This might appear somewhat surprising given...

Boost Research

Hargreaves Lansdown (HL/:LN) No Flow, No Go

The political decision to exit the European Union has unpredictable negative consequences for both the UK economy and stockmarket. A tough market...

Boost Research

FTSE 100: Twenty Years of Going Nowhere (Almost)

The UK's principal share index FTSE 100 closed 2018 marginally lower than its level at the start of the Millenium In contrast with the lackluster...

Boost Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Quiddity Leaderboard F100/​​​250 Sep 23: Several Changes Including Potential Surprises

Newly listed Cab Payments Holdings (CABP LN) and newly eligible Breedon Aggregates (BREE LN) and Ceres Power Holdings (CWR LN) could be added to...

Janaghan Jeyakumar, CFA

Central Retail: Initial ESG Assessment Is Impressive

ESG ratings providers take a long time to rate issuers of initial public offerings. If you go through a list of recent large IPOs (e.g., Alibaba,...

Kyle Rudden

FTSE 100 Long/Short: No 2 No Deal

The UK stockmarket has enjoyed a buoyant first quarter keeping track with other developed markets. This might appear somewhat surprising given...

Boost Research

Hargreaves Lansdown (HL/:LN) No Flow, No Go

The political decision to exit the European Union has unpredictable negative consequences for both the UK economy and stockmarket. A tough market...

Boost Research

FTSE 100: Twenty Years of Going Nowhere (Almost)

The UK's principal share index FTSE 100 closed 2018 marginally lower than its level at the start of the Millenium In contrast with the lackluster...

Boost Research

Quiddity Leaderboard F100/250 Sep 23: Several Changes Including Potential Surprises