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 NIFTY 50 and NIFTY 100 indices in the September 2023 rebalance.</li>
<li>The NIFTY Next 50 methodology was supposed to change in June 2023 but this has been kept on hold for now. This change could still take place before September 2023.</li>
<li>In this insight, we take a look at our expectations for index changes under both the existing methodology and the proposed new methodology.</li>
</ul>


In this insight, we take a look at the names leading the race to become ADDs/DELs for the NIFTY 50 and NIFTY 100 indices in the September 2023 rebalance.
The NIFTY Next 50 methodology was supposed to change in June 2023 but this has been kept on hold for now. This change could still take place before September 2023.
In this insight, we take a look at our expectations for index changes under both the existing methodology and the proposed new methodology.


Quiddity Leaderboard NIFTY Sep 23: 5 ADDs/DELs for NIFTY Next 50 Unless the Methodology Changes

APAC IPOs & Placements, Aequitas Research

Ethan Aw

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

TVS Supply Chain Solutions / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tvs-supply-chain-solutions" target="_blank" data-smartkarma-citation="entities:36778:1" rel="noopener">TVS Supply Chain Solutions (1915741D IN)</a> is looking to raise up to US$110m in its India IPO, after downsizing from an earlier float of up to US$500m.</li>
<li>TVS SCS is an Indian supply chain logistics solution provider which also has global capabilities and network across the value chain with cross deployment abilities, according to RedSeer. </li>
<li>In our previous note, we looked at the company’s past performance. In this note, we talk about RHP updates, undertake a peer comparison and provide our thoughts on valuation.</li>
</ul>



TVS Supply Chain Solutions (1915741D IN) is looking to raise up to US$110m in its India IPO, after downsizing from an earlier float of up to US$500m.
TVS SCS is an Indian supply chain logistics solution provider which also has global capabilities and network across the value chain with cross deployment abilities, according to RedSeer. 
In our previous note, we looked at the company’s past performance. In this note, we talk about RHP updates, undertake a peer comparison and provide our thoughts on valuation.


TVS Supply Chain Solutions IPO - RHP Updates, Peer Comparison & Thoughts on Valuation

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

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>Global equities are under some pressure after Fitch downgraded the United States' credit rating to AA+ from AAA.</li>
<li>We expect that this is a normal 3%-6% pullback to the 50-day MA or major $93 support level on the MSCI ACWI <a href="https://www.smartkarma.com/entities/ishares-msci-acwi-etf" target="_blank" data-smartkarma-citation="entities:24402:1" rel="noopener">iShares MSCI ACWI ETF (ACWI US)</a> .</li>
<li>$TNX is below 4.1%-4.3% and DXY remains in an 8-month downtrend; as long as this remains true, we'd buy on a pullback to the 50-day MA and/or $93 on ACWI-US</li>
</ul>


Global equities are under some pressure after Fitch downgraded the United States' credit rating to AA+ from AAA.
We expect that this is a normal 3%-6% pullback to the 50-day MA or major $93 support level on the MSCI ACWI iShares MSCI ACWI ETF (ACWI US) .
$TNX is below 4.1%-4.3% and DXY remains in an 8-month downtrend; as long as this remains true, we'd buy on a pullback to the 50-day MA and/or $93 on ACWI-US


Normal Pullback, or Something More?; Watching Resistance on DXY and 10-Yr Treasury Yield; Value Buys

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>Using the current index methodology throws up 5 changes for the <a href="https://www.smartkarma.com/entities/nse-nifty-next-50-index" target="_blank" data-smartkarma-citation="entities:36053:1" rel="noopener">NSE Nifty Next 50 Index (NIFTYJR INDEX)</a> in September. Turnover will be BIG.</li>
<li>Using the proposed index methodology throws up 11 changes for the <a href="https://www.smartkarma.com/entities/nse-nifty-next-50-index" target="_blank" data-smartkarma-citation="entities:36053:1" rel="noopener">NSE Nifty Next 50 Index (NIFTYJR INDEX)</a> in September. Turnover will be HUGE.</li>
<li>The market consultation being put on hold could indicate pushback from index users or the possibility of F&amp;O contracts being introduced on some of the non-F&amp;O index constituents.</li>
</ul>


Using the current index methodology throws up 5 changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) in September. Turnover will be BIG.
Using the proposed index methodology throws up 11 changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) in September. Turnover will be HUGE.
The market consultation being put on hold could indicate pushback from index users or the possibility of F&amp;O contracts being introduced on some of the non-F&amp;O index constituents.


NIFTY/NEXT50 Index Rebalance Preview: Loads of Changes if Proposed Methodology Is Implemented

<ul>
<li>The review period for a bunch of indices ended last week though the announcement of the changes will take 4-6 weeks.</li>
<li>There are no rebalance implementations in the coming week though focus will move to the implementation of the <a href="https://www.smartkarma.com/entities/housing-development-finance" target="_blank" data-smartkarma-citation="entities:252:1" rel="noopener">HDFC Limited</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</a> merger and index changes the following week.</li>
<li>There were big inflows to China focused ETF with a lot of money going into Semiconductor and Chip focused ETFs.</li>
</ul>


The review period for a bunch of indices ended last week though the announcement of the changes will take 4-6 weeks.
There are no rebalance implementations in the coming week though focus will move to the implementation of the HDFC Limited/ HDFC Bank merger and index changes the following week.
There were big inflows to China focused ETF with a lot of money going into Semiconductor and Chip focused ETFs.


Index Rebalance & ETF Flow Recap: KQ150, LQ45, PCOMP, HDFC/HDFCB, Delta Electronics, Redox IPO, AMFI

India

Hero MotoCorp Ltd. designs, manufactures and distributes motorcycles. The Company's products also include motorcycle parts and accessories.

Eicher Motors Ltd. manufactures light commercial vehicles which are sold domestically and are also exported to other countries. Eicher Motors also manufactures two-wheelers and automotive gears.

Maharashtra Scooters Ltd. manufactures and distributes two-wheeler scooters.

Atul Auto Ltd. manufactures three-wheeled commercial diesel vehicles.

MRF Limited manufactures and distributes tyres and tubes for automobiles, aircrafts, motorcycles and cycles. The Company also manufactures conveyor belts, paint and coats, and hoses. Every MRF tyre designed is the result of a special acid test on the race and rally tracks.

Bosch Limited manufactures a wide range of automotive parts. The Company'products includes fuel injection pumps, spark plugs, including nozzles and nozzle holders, elements, delivery valves, filters and filter inserts, glow plugs, starter motors, alternators and wipers. Bosch also manufactures hydraulics and pneumatic equipment and electric power tools and fixtures.

Hindustan Motors Limited manufactures cars, trucks, diesel engines, bulldozers, cranes, dumpers, compactors, shovels and scrapers. The Company also manufactures a wide range of steel products, axle assemblies, special purpose machine tools, hydraulic pumps and hydraulic valves.

Bharat Forge Limited manufactures steel forgings and machined components for the automotive, diesel engine, railway, earthmoving, cement, sugar, steel, coal, ship building and oilfield industries. The Company specializes in Closed Die as well as Open Die Forgings.

Samvardhana Motherson International Limited manufactures and distributes automotive parts. The Company offers products such as HVAC systems, air intake manifolds, highway vehicle cabins, air compressors, and pedal box assembly. Samvardhana Motherson International markets its products worldwide.

Samvardhana Motherson International Ltd (MOTHERSO IN)

Balkrishna Industries Ltd. manufactures automobile tires and tubes. The Company also manufactures different varieties of paper & paper boards and processes synthetic textiles.

PT Astra International Tbk assembles and distributes automobiles, motorcycles, and their related spare parts.  Through its subsidiaries, the Company also operates in the mining, development of plantations, financial and information technology.

NISSAN MOTOR CO., LTD. manufactures and distributes automobiles and related parts. It also provides financing services. Nissan delivers a comprehensive range of products under various brands. The Company manufactures in Japan, the United States, Mexico, the United Kingdom and many other countries.

Geely Automobile Holdings Limited operates as a passenger vehicles manufacturing company. The Company provides passenger vehicles development, manufacturing, sales, and other services. Geely Automobile Holdings also exports passenger vehicles.

Great Wall Motor Company Limited, through its subsidiaries, manufactures and sells pick-up trucks and sport-utility vehicles (SUVs) in China under branded names. The Company also researches and develops, and manufactures principal automotive parts and components for use in the assembly of pick-up trucks and SUVs.

Subaru Corp manufactures passenger cars, buses, motor vehicle parts, and industrial machinery.  The Company also produces aircraft parts and supplies it to defense agency and Boeing Co.  The Company sells its passenger cars under the Subaru brand name.

Yamaha Motor Co., Ltd. manufactures motorcycles.  The Company also produces motor vehicle engines for Toyota Motor Corp. and Ford Motor Co.  Yamaha Motor's specialty products include motor boats, snowmobiles, golf carts, and electric power generators.  Yamaha Motor sells products in Japan, North America, Europe, Asia, and South America.

BAIC BluePark New Energy Technology Co.,Ltd. operates as a passenger car manufacturer. The Company engages in research, development, and marketing of new energy vehicles and power battery system. BAIC BluePark New Energy Technology conducts businesses in China.

BAIC BluePark New Energy Techn (600733 CH)

Guangzhou Automobile Group Company, Ltd. manufactures, sells, and services automobiles. The Company is also involved in automobile parts and components, and auto finance and related services for both overseas and domestic markets.

Chongqing Changan Automobile Company Limited develops, manufactures, and markets mini cars, mini sedans, full size sedans, and engines.

Chongqing Changan Automobile Company (200625 CH)

Isuzu Motors Limited manufactures and markets trucks and automobile parts. The Company's products include pickup trucks, light/heavy duty trucks, medium and large-sized buses, recreational vehicles, and sport utility vehicles.

TVS Motor Company Limited manufactures motorcycles, mopeds, and scooters. The Company provides spark ignition operated outboard motors, combustion spark ignition engines, critical engines, and transmission parts. TVS Motor Company serves customers in India.

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TVS Motor (TVSL IN)

Quiddity Leaderboard NIFTY Sep 23: 5 ADDs/DELs for NIFTY Next 50 Unless the Methodology Changes

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Janaghan Jeyakumar, CFA

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Vermilion Research

NIFTY/NEXT50 Index Rebalance Preview: Loads of Changes if Proposed Methodology Is Implemented

There could be 5 changes with the current methodology or 11 with the proposed methodology. Turnover will be big in both cases. There is a lot of...

Brian Freitas

Index Rebalance & ETF Flow Recap: KQ150, LQ45, PCOMP, HDFC/HDFCB, Delta Electronics, Redox IPO, AMFI

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

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