In today’s briefing:
- MSCI India November SAIR: Potential Changes with Big Flow & Impact
- SENSEX Index Rebalance Preview: Market Consultation on Derivative Linkage & Impact
- Merger Arb Mondays (10 Oct) – Lifestyle, Yashili, Eagle Cement, O2Micro, DTAC/True, Nearmap, PTB
- Advertisement Apocalypse
MSCI India November SAIR: Potential Changes with Big Flow & Impact
- We see 9 potential adds and 2 potential deletes for the MSCI India Index at the November SAIR. There are a few stocks close to the cutoffs.
- Inclusion in the index will require passive trackers to buy 7-14 days of ADV on the stocks. That increases to 18-55 days of delivery volume.
- There appears to be significant pre-positioning on a lot of the potential adds and the shareholding pattern as of end September should provide a better picture.
SENSEX Index Rebalance Preview: Market Consultation on Derivative Linkage & Impact
- AIPL has commenced a market consultation on amending the index universe to only include stocks that are a part of the Futures & Options (F&O) segment of the market.
- This is likely driven by a bunch of Adani-group companies that are at the cusp of index inclusion and are not a part of the F&O market.
- Post implementation of the change, Tata Motors Ltd (TTMT IN) is a likely inclusion to the index in December, though that depends on Dr. Reddy’s Laboratories (DRRD IN) being deleted.
Merger Arb Mondays (10 Oct) – Lifestyle, Yashili, Eagle Cement, O2Micro, DTAC/True, Nearmap, PTB
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads – 21Vianet Group (VNET US), Shandong Fengxiang (9977 HK), Alliance Aviation Services (AQZ AU), 111 Inc (YI US), Genex Power Ltd (GNX AU), O2Micro International (OIIM US).
- Lowest spreads – Tyro Payments (TYR AU), OZ Minerals Ltd (OZL AU), Nitro Software Ltd (NTO AU), MACA Ltd (MLD AU), Singapore Medical (SMG SP), Jinke Smart Services (9666 HK).
Advertisement Apocalypse
- Direct to Consumer and E-commerce brands benefited massively from the demand during the pandemic but have struggled in recent months due to the recent slump in demand.
- Furthermore, Privacy focused changes instituted by both Apple and Google have led to poor conversion rates and soaring customer acquisition costs whiles also lowering conversion rates.
- System1, which went public through a SPAC, aims to solve all these issues by matching high-intent customers with advertisers at scales, effectively sidestepping the recent changes.
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