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 names leading the race to become ADDs/DELs for the <em>NIFTY 50, 100, and 500</em> Indices for the <em>September 2022</em> Rebalance.</li>
<li>With only one month left in the reference period, most changes for the NIFTY 50 and NIFTY 100 Index seem to be high-conviction index changes.</li>
<li>In addition, I have discussed some trading opportunities with interesting potential index flow dynamics.</li>
</ul>


In this insight, we take a look at the names leading the race to become ADDs/DELs for the NIFTY 50, 100, and 500 Indices for the September 2022 Rebalance.
With only one month left in the reference period, most changes for the NIFTY 50 and NIFTY 100 Index seem to be high-conviction index changes.
In addition, I have discussed some trading opportunities with interesting potential index flow dynamics.


NIFTY Quiddity Leaderboard Sep 2022: June Trades Successful; More to Come

<ul>
<li>The NIFTY Index Family has a series of broad equity indices that represents large, mid and small market capitalisation segments of the Indian public equity market.</li>
<li>The review of broad market indices will be done on a semi-annual basis and the changes will be implemented at the end of March and September every year.</li>
<li>Below is a look at the names leading the race to become Adds and Deletes for NIFTY 50, NIFTY 100, and NIFTY 500 in September 2022.</li>
</ul>


The NIFTY Index Family has a series of broad equity indices that represents large, mid and small market capitalisation segments of the Indian public equity market.
The review of broad market indices will be done on a semi-annual basis and the changes will be implemented at the end of March and September every year.
Below is a look at the names leading the race to become Adds and Deletes for NIFTY 50, NIFTY 100, and NIFTY 500 in September 2022.


NIFTY Indices: Quiddity Leaderboard for September 2022

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>We are past the halfway mark in the review period for the September rebalance of the NIFTY100 Index. We see five potential changes which should be announced end August.</li>
<li>There is a high probability of <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 href="https://www.smartkarma.com/entities/indian-railway-catering-and-tourism-corporation-limited" target="_blank" data-smartkarma-citation="entities:33951:1" rel="noopener">Indian Railway Catering and Tourism (IRCTC IN)</a>, <a href="https://www.smartkarma.com/entities/bharat-electronics-ltd" target="_blank" data-smartkarma-citation="entities:6636:1" rel="noopener">Bharat Electronics (BHE IN)</a> and <a href="https://www.smartkarma.com/entities/mphasis-ltd" target="_blank" data-smartkarma-citation="entities:7672:1" rel="noopener">Mphasis Ltd (MPHL IN)</a> being added to the index.</li>
<li>High probability deletions are <a href="https://www.smartkarma.com/entities/lupin-ltd" target="_blank" data-smartkarma-citation="entities:17910:1" rel="noopener">Lupin Ltd (LPC IN)</a>, <a href="https://www.smartkarma.com/entities/jubilant-foodworks-ltd" target="_blank" data-smartkarma-citation="entities:986:1" rel="noopener">Jubilant Foodworks (JUBI IN)</a>, <a href="https://www.smartkarma.com/entities/zydus-lifesciences-ltd" target="_blank" data-smartkarma-citation="entities:12914:1" rel="noopener">Zydus Lifesciences Ltd (ZYDUSLIF IN)</a>, <a href="https://www.smartkarma.com/entities/punjab-national-bank" target="_blank" data-smartkarma-citation="entities:542:1" rel="noopener">Punjab National Bank (PNB IN)</a> and <a href="https://www.smartkarma.com/entities/steel-authority-of-india" target="_blank" data-smartkarma-citation="entities:14323:1" rel="noopener">Steel Authority of India (SAIL IN)</a>.</li>
</ul>


We are past the halfway mark in the review period for the September rebalance of the NIFTY100 Index. We see five potential changes which should be announced end August.
There is a high probability of Tata Power (TPWR IN), Indian Railway Catering and Tourism (IRCTC IN), Bharat Electronics (BHE IN) and Mphasis Ltd (MPHL IN) being added to the index.
High probability deletions are Lupin Ltd (LPC IN), Jubilant Foodworks (JUBI IN), Zydus Lifesciences Ltd (ZYDUSLIF IN), Punjab National Bank (PNB IN) and Steel Authority of India (SAIL IN).


NIFTY100 Index Rebalance Preview: Five Potential Changes in September

External broker reports(aggregated public sources), Nirmal Bang

Nirmal Bang

External broker reports(aggregated public sources)

A Relationship Beyond Broking

Nirmal Bang, one of the leading stock broking companies in India, caters to retail and institutional clients by offering them a range of financial products and services, including equities, derivatives, commodities, currency derivatives, mutual funds, IPOs, insurance, depository services and PMS.

Nirmal Bang is drawn from a diversity of professional backgrounds, and blend of experience, skill and dedication is shared with its clients. Nirmal Bang emphasizes adequate, thorough research local and world-wide developments, balancing these with the astute discovery of intrinsic values, synergies and growth. The aim is simply to help the investors to maximize their returns.

Equity Bottom-Up

<div><div><div><div><ul><li>NII growth affected due to margin dip: NII growth was weak as NIM (domestic) expansion (YoY) was soft (+3bps YoY) while declining by 15bps QoQ.</li></ul><div><div><div><div><ul><li>Growth lagging peers: Gross advances increased by 6.2% YoY and 4.0% QoQ. Growth in domestic advances was 5.6% YoY and 3.4% QoQ.</li></ul><div><div><div><div><ul><li>Deposits growth tepid: Overall global deposits increased by 3.6% YoY and 1.7% QoQ. Domestic deposit growth stood at 3.9% YoY and 1.5% QoQ.</li></ul></div></div></div></div></div></div></div></div></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>

NII growth affected due to margin dip: NII growth was weak as NIM (domestic) expansion (YoY) was soft (+3bps YoY) while declining by 15bps QoQ.Growth lagging peers: Gross advances increased by 6.2% YoY and 4.0% QoQ. Growth in domestic advances was 5.6% YoY and 3.4% QoQ.Deposits growth tepid: Overall global deposits increased by 3.6% YoY and 1.7% QoQ. Domestic deposit growth stood at 3.9% YoY and 1.5% QoQ.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.

Punjab National Bank - Weak on Multiple Counts

Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

<ul>
<li><em><strong>SBI results were highly managed in FY 2Q22, and going forward it’s difficult for anyone to take both these results and this bank very seriously; </strong></em></li>
<li><em><strong>SBI reported FY 3Q22 results of INR 84.3 bn, improving INR 8.1 bn (10.6%) linked quarter. Volatility between loss provisions and operating expenses continued; and </strong></em></li>
<li><em><strong>Net new NPLs accelerated 18.5% annualized, and SBI’s reserves are short INR 568 tn – over five quarters of pre-tax results. </strong></em></li>
</ul>


SBI results were highly managed in FY 2Q22, and going forward it’s difficult for anyone to take both these results and this bank very seriously; 
SBI reported FY 3Q22 results of INR 84.3 bn, improving INR 8.1 bn (10.6%) linked quarter. Volatility between loss provisions and operating expenses continued; and 
Net new NPLs accelerated 18.5% annualized, and SBI’s reserves are short INR 568 tn – over five quarters of pre-tax results. 


State Bank of India – Rules Don’t Apply

India

Punjab National Bank provides financial services such as corporate and personal banking, industrial finance, agricultural finance, financing of trade and international banking. The Company provides services to domestic conglomerates, medium and small industrial units, exporters, non-resident Indians and multinational companies.

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Punjab National Bank (PNB IN)

NIFTY Quiddity Leaderboard Sep 2022: June Trades Successful; More to Come

NIFTY 50 could see one or two changes. NIFTY 100 and NIFTY 500 could see 5 and 25 changes respectively. There might be some interesting trades to...

Janaghan Jeyakumar, CFA

NIFTY Indices: Quiddity Leaderboard for September 2022

A look at the names leading the race to become Adds and Deletes for NIFTY 50, NIFTY 100, and NIFTY 500 in September 2022.

Janaghan Jeyakumar, CFA

NIFTY100 Index Rebalance Preview: Five Potential Changes in September

We see five potential changes to the NIFTY100 Index at the September rebalance. Most are high probability changes and there will be over 1.5 days...

Brian Freitas

Punjab National Bank - Weak on Multiple Counts

PNB reported overall weak earnings growth (YoY) due to soft margin expansion, ~35% YoY decline in non-interest revenue and 3.5% YoY increase in...

Nirmal Bang

State Bank of India – Rules Don’t Apply

SBI: It’s difficult for anyone to take this bank very seriously. SBI reported a QOQ FY 3Q22 results increase of 10.6%, as volatility between loss...

Thomas J. Monaco

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