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>Media reports indicate that the <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 with <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> is expected to complete in 4-5 weeks.</li>
<li>There will be inclusions to the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index</a>, <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> and <a href="https://www.smartkarma.com/entities/s-p-bse-sensex-index" target="_blank" data-smartkarma-citation="entities:31494:1" rel="noopener">S&amp;P BSE SENSEX Index </a>and capping changes to the <a href="https://www.smartkarma.com/entities/nifty-bank-index" target="_blank" data-smartkarma-citation="entities:26811:1" rel="noopener">Nifty Bank Index</a> apart from changes to global indices.</li>
<li>While the impact on the merging entities is not big, there will be fairly large flows on some stocks that are index inclusions or affected by capping changes.</li>
</ul>


Media reports indicate that the HDFC Bank (HDFCB IN) merger with HDFC Limited (HDFC IN) is expected to complete in 4-5 weeks.
There will be inclusions to the NIFTY Index, Nifty Next 50 Index and S&amp;P BSE SENSEX Index and capping changes to the Nifty Bank Index apart from changes to global indices.
While the impact on the merging entities is not big, there will be fairly large flows on some stocks that are index inclusions or affected by capping changes.


HDFC/​​​​​HDFC Bank Mega Merger Expected to Complete in a Few Weeks: Index Implications

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

S&P BSE SENSEX Index / Technical Analysis

<ul>
<li>Our 2023 outlook remains unchanged as we continue to expect broad-based consolidation with $93 capping upside on MSCI ACWI (ACWI-US), while important downside targets are $86, $84, and $75-77.</li>
<li>We still recommend tactical overweight to defensives including gold miners and MSCI ACWI Staples, Health Care, and Utilities, given ACWI-US remains near the top of our expected 2023 trading range.</li>
<li>We are now starting to see broad-based improvement, particularly in Japan and India, but also in Taiwan and South Korea. Most of today's buy recommendations are cyclicals in these countries.</li>
</ul>


Our 2023 outlook remains unchanged as we continue to expect broad-based consolidation with $93 capping upside on MSCI ACWI (ACWI-US), while important downside targets are $86, $84, and $75-77.
We still recommend tactical overweight to defensives including gold miners and MSCI ACWI Staples, Health Care, and Utilities, given ACWI-US remains near the top of our expected 2023 trading range.
We are now starting to see broad-based improvement, particularly in Japan and India, but also in Taiwan and South Korea. Most of today's buy recommendations are cyclicals in these countries.


Broad-Based Improvement in India, Add Exposure/Overweight. Buys: Cyclicals in Japan, India, & Taiwan

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mankind-pharma-ltd" target="_blank" data-smartkarma-citation="entities:36389:1" rel="noopener">Mankind Pharma (6596876Z IN)</a> is looking to raise up to US$526m in its IPO by selling 40.06m shares at a price range of INR 1026 to INR 1080 per share.</li>
<li>The company has allocated 12.02m shares to anchor investors at INR 1080/share. That list includes marquee names and the lock-up reduces near-term float.</li>
<li>The IPO opens on 25 April and will close on 27 April. Shares are expected to start trading on 9 May and there are no near-term index inclusions expected.</li>
</ul>



Mankind Pharma (6596876Z IN) is looking to raise up to US$526m in its IPO by selling 40.06m shares at a price range of INR 1026 to INR 1080 per share.
The company has allocated 12.02m shares to anchor investors at INR 1080/share. That list includes marquee names and the lock-up reduces near-term float.
The IPO opens on 25 April and will close on 27 April. Shares are expected to start trading on 9 May and there are no near-term index inclusions expected.


Mankind Pharma: IPO Details & Index Inclusion

<ul>
<li>The lock-up on nearly 9.4bn shares of <a href="https://www.smartkarma.com/entities/yes-bank-ltd" target="_blank" data-smartkarma-citation="entities:767:1" rel="noopener">Yes Bank (YES IN)</a> expires on 13 March. Most of that is from the banks that helped in the recapitalisation in March 2020.</li>
<li>There will be forced sellers as soon as the lock-up ends, and there will be other sellers that will want to sell.</li>
<li>The forced and discretionary selling will be offset to a very small extent by inflows from passive trackers in May/June as the free float for the stock increases.</li>
</ul>


The lock-up on nearly 9.4bn shares of Yes Bank (YES IN) expires on 13 March. Most of that is from the banks that helped in the recapitalisation in March 2020.
There will be forced sellers as soon as the lock-up ends, and there will be other sellers that will want to sell.
The forced and discretionary selling will be offset to a very small extent by inflows from passive trackers in May/June as the free float for the stock increases.


YES Bank Lock-Up Expiry: Forced Sellers, Overhang & Index Implications

Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Macroeconomics

<ul>
<li>For a second consecutive year, fiscal policy is mildly contractionary while accommodating a 30%+ hike in public investment. Strong tax revenues help lower the fiscal deficit by 0.5% of GDP.</li>
<li>Surging nominal GDP boosted corporate &amp; income tax revenue by 16%YoY+ and central GST revenue by 30%YoY in Apr-Dec'22. Actual FY23 deficit will be 6% (rather than 6.4%) of GDP. </li>
<li>We expect nominal GDP to grow 13% (vs 10.4% official projection) in FY24, cutting fiscal deficit to 5.5% of GDP, thus crowding-in private investment, enabling real GDP to grow 7.2%. </li>
</ul>


For a second consecutive year, fiscal policy is mildly contractionary while accommodating a 30%+ hike in public investment. Strong tax revenues help lower the fiscal deficit by 0.5% of GDP.
Surging nominal GDP boosted corporate &amp; income tax revenue by 16%YoY+ and central GST revenue by 30%YoY in Apr-Dec'22. Actual FY23 deficit will be 6% (rather than 6.4%) of GDP. 
We expect nominal GDP to grow 13% (vs 10.4% official projection) in FY24, cutting fiscal deficit to 5.5% of GDP, thus crowding-in private investment, enabling real GDP to grow 7.2%. 


India: Surging Tax Revenue Helps Lower PSBR, Ensuring Capex-Led Growth

India

The S&P BSE Sensex Index is a cap-weighted index. The index members have been selected on the basis of liquidity, depth, and floating-stock-adjustment depth and industry representation. Sensex has a base date and value of 100 in 1978-1979. The Index shifted to free-float methodology since 09/01/03. Please see {SNSXOLD Index <GO>} for mid-month options.

S&P BSE SENSEX Index (SENSEX INDEX EQUITY)

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52-week Range	0.00 - 0.00
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S&P BSE SENSEX Index (SENSEX INDEX EQUITY)

HDFC/HDFC Bank Mega Merger Expected to Complete in a Few Weeks: Index Implications

Media reports indicate that the HDFC Bank merger with HDFC Ltd is expected to complete in 4-5 weeks. There will be ad hoc inclusions to the...

Brian Freitas

Broad-Based Improvement in India, Add Exposure/Overweight. Buys: Cyclicals in Japan, India, & Taiwan

Seeing broad-based improvement in India #SENSEX -- overweight/add exposure. We still recommend a tactical overweight to ACWI defensives with $ACWI...

Vermilion Research

Mankind Pharma: IPO Details & Index Inclusion

Mankind Pharma is looking to raise up to US$526m in its IPO by selling 40.06m shares at INR 1080/share. 12.02m shares have been allocated to anchor...

Brian Freitas

YES Bank Lock-Up Expiry: Forced Sellers, Overhang & Index Implications

Over 9bn shares of YES Bank unlock next week. There will be forced selling from local passive trackers, overhang from the banks that helped recap...

Brian Freitas

India: Surging Tax Revenue Helps Lower PSBR, Ensuring Capex-Led Growth

CGST revenue up 30%YoY & income taxes 16%YoY in Apr-Dec'22, enabling 33% boost to public investment for FY24 but still lowering the fiscal deficit....

Prasenjit K. Basu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HDFC/​​​​​HDFC Bank Mega Merger Expected to Complete in a Few Weeks: Index Implications

Media reports indicate that the HDFC Bank merger with HDFC Ltd is expected to complete in 4-5 weeks. There will be ad hoc inclusions to the...

Brian Freitas

Broad-Based Improvement in India, Add Exposure/Overweight. Buys: Cyclicals in Japan, India, & Taiwan

Seeing broad-based improvement in India #SENSEX -- overweight/add exposure. We still recommend a tactical overweight to ACWI defensives with $ACWI...

Vermilion Research

Mankind Pharma: IPO Details & Index Inclusion

Mankind Pharma is looking to raise up to US$526m in its IPO by selling 40.06m shares at INR 1080/share. 12.02m shares have been allocated to anchor...

Brian Freitas

YES Bank Lock-Up Expiry: Forced Sellers, Overhang & Index Implications

Over 9bn shares of YES Bank unlock next week. There will be forced selling from local passive trackers, overhang from the banks that helped recap...

Brian Freitas

India: Surging Tax Revenue Helps Lower PSBR, Ensuring Capex-Led Growth

CGST revenue up 30%YoY & income taxes 16%YoY in Apr-Dec'22, enabling 33% boost to public investment for FY24 but still lowering the fiscal deficit....

Prasenjit K. Basu

HDFC/HDFC Bank Mega Merger Expected to Complete in a Few Weeks: Index Implications