In today’s briefing:
- NIFTY NEXT50 Index Rebalance Preview: Potential Adds Skyrocketing
- HKEX – Worsening Property Transactions, Underscores Ailments for Hong Kong
- Bank Of Baroda (BOB IN): Initiating Coverage – Best Value Bet Among Indian Banks
- Morning Views Asia: Indika Energy, Lippo Malls Indonesia Retail Trust, SK Hynix, Vedanta Resources
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NIFTY NEXT50 Index Rebalance Preview: Potential Adds Skyrocketing
- Nearing the end of the review period, we see 6 potential changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) using the current index methodology.
- Estimated one-way turnover is 13.9% resulting in a one-way trade of INR 26.9bn. There will be more than 1.5x ADV to sell on nearly all deletes.
- The potential adds have outperformed the potential deletes by 35% over the last two months and some stocks are looking extremely frothy.
HKEX – Worsening Property Transactions, Underscores Ailments for Hong Kong
- HKEX (388 HK) outlook has been withering for some time, and new data on property transactions, shows that this remains weak.
- SGX (SGX SP) in a less volatile geopolitical financial center, has a much lower market capitalization while its earnings outlook is far stronger.
- Two major differences between these two entities is their ROE and ROA, although the former may be more relevant. SGX (SGX SP) has an ROE that is nearly 50% higher.
Bank Of Baroda (BOB IN): Initiating Coverage – Best Value Bet Among Indian Banks
- Bank Of Baroda (BOB IN) has become the second-best PSU bank in India after SBIN, in terms of improvement in asset quality and profitability.
- Medium-Term ROE Forecast 16% to 18%; ROA >1% consistently; Asset Quality problems receding; Strategy is to diversify loan book towards retail further and focus on improving efficiencies
- Despite the recent rally, P/BV is cheap at 0.9x FY25e for high teen ROE business. BOB can easily re-rate to P/BV of 1.3x FY25e in the near term
Morning Views Asia: Indika Energy, Lippo Malls Indonesia Retail Trust, SK Hynix, Vedanta Resources
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.