India

• Senco Gold (0655443D IN) ‘s long awaited IPO is scheduled to open this week.
• The company is the largest organized retail jewellery player in the East and has a pan India presence. 
• A look at its IPO filing and current financials reveal several key takeaways, including ongoing litigations, inability to generate cash and register key trademarks, etc.

• News out this morning that HDFC Bank and HDFC merger became effective 1 July 
• This occurred after the Boards approved the merger scheme on 30 June
• Funding cost benefits, operating cost synergies, product cross-sale: major benefits

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• MGM China Holdings
• Sino-Ocean Service
• Vedanta Resources

• Rise into late June/early July cycle peak on track with scope to overshoot after the 4th of July break (then expect a more volatile mid-July period). Reducing on strength.
• SPX kissed our 4,500 target with an overshoot projection at 4,547. Recent long from 4,470.
• Top Asia longs: NKY, Taiwan and India. Top shorts have been HSI and Kospi 200 (heavy bias to add on upticks). July will usher in a more volatile phase.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Tata Motors ADR
• Vedanta Resources

• 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.

• Bank analysts sometimes like a story with high NPLs; recoveries can be powerful to profit
• For the past 7 quarters, NPLs are in decline at PNB, but most recent quarter is strongest
• There remains a large pool of NPLs at 8.7% of loans, for possible ongoing recoveries

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Central China Real Estate
2. Sino-Ocean Group
3. China Jinmao Holdings
4. Lifestyle International Holdings
5. Geely Auto

and more…

• We see 7 stocks moving from MidCap to LargeCap, 8 stocks moving from LargeCap to MidCap, 9 stocks from SmallCap to MidCap, and 10 stocks from MidCap to SmallCap.
• The expected migrations from SmallCap to MidCap have outperformed the other migrations and some stocks have seen large price moves over the last couple of weeks.
• Active managers would have started realigning their portfolios and that could continue for a couple of weeks. Unwind long positions into strength.

• Home First Finance (HOMEFIRS IN) is a technology-driven affordable housing finance company (HFC) focused on first-time homebuyers in low and middle-income groups. 
• We believe access to finance is more relevant rather than quick TAT and hence question the relevance of wanting to be the fastest provider.
• Considering the fading competitive advantage, borrower profile and segment dynamics, HOMEFIRS may be the fastest but not necessarily the safest.

• 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.
• The HDFC/HDFC Bank Merger is expected to complete in the next few weeks and that could trigger intra-review index changes.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Bharat Petroleum Corp
• Meituan
• Pertamina Geothermal Energy

• What sets HDFC Bank apart from peers is stability, strength in profit, ROA, NPLs, NIM
• Peers see volatile, high NPL ratios, where HDFC Bank may see NPLs at less than 1% soon
• Amalgamation HDFC into HDFC Bank can see more interest, supported by fundamentals 

• Five Star Business Finance (FIVESTAR IN) is a NBFC based in India, specializing in providing financial services to small and medium-sized enterprises (SMEs) in the informal and semi-formal sectors. 
• The focus on in-house sourcing, collection, and risk management aids in maintaining strong asset quality.
• In terms of valuations, FIVESTAR trades at a premium. However, considering its competitive moat and growth potential, any available opportunities should be capitalized upon.

• An interview with Deepak Parekh set a bunch of stocks on fire. Then came the HDFC Bank (HDFCB IN) exchange announcement that said the dates were still tentative.
• Indications are that the merger could be effective 1 July and HDFC Limited (HDFC IN)‘s last trading day would be 13 July.
• The merger will have an impact on both HDFC stocks and on other stocks that could be added to the NIFTY Index, NIFTYJR INDEX and SENSEX Index.

• Demand for green hydrogen – or hydrogen that is generated by renewable energy – is expected to climb in the coming years as governments push for a cleaner future.
• Newtrace, a climate tech firm based in India, is developing a new type of electrolyzer, which is used to create green hydrogen from renewable electricity.
• The company says its electrolyzers have lower costs and higher efficiency than what is commonly used in the market.

• IdeaForge Technology Limited (1475641D IN)‘s IPO opens for subscription this week. 
• The company is said to be the market leader in manufacturing of drones, an industry that is expected to grow rapidly in the next five years.
• However, there are several forensic takeaways that include disclosure errs relating to litigations, treatment of R&D, cash generation, etc.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Azure Power Global Ltd
• Sino-Ocean Service

• Rajiv Kaul had it all. By 2008, he had won the proverbial game of life.
• Armed with an engineering degree from BIT Mesra and an MBA from XLRI Jamshedpur, Rajiv joined Microsoft in 1992 and quickly rose the ranks to become its youngest managing director at the age of 33.
• After a stint of 14 years, Rajiv left the comfort and familiarity of Microsoft for the shores of Private Equity.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Central China Securities
• UPL Ltd

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. China Jinmao Holdings
2. Lifestyle International Holdings
3. Geely Auto
4. First Pacific Co
5. Tata Motors Ltd

and more…