In today’s briefing:
- STI Index Rebalance: Emperador IN, ComfortDelGro OUT
- NIFTY NEXT50 Index Rebalance: Significant Impact for an Overlooked Index
- NIFTY50 Index Rebalance: Adani Enterprises Replaces Shree Cement
- China Comm Const (1800 HK): Key Takeaways from Post-1H22 Call
- NIFTY Sep 2022 Rebal: Adani Enterprises and Adani Total Gas Are Top Positives
- Sany Profit Falls 73.85% as Demand for Construction Gear Dries Up
- United Airlines: Sustainable Aviation Fuel Update & Other Drivers
STI Index Rebalance: Emperador IN, ComfortDelGro OUT
- Emperador (EMI SP) will replace Comfortdelgro Corp (CD SP) in the FTSE Straits Times Index (STI) (STI INDEX) at the close of trading on 16 September.
- Though the changes were expected, there is over 4 days of ADV to trade on both stocks and we do not feel there are a lot of pre-positions built up.
- There are some risks in the stocks, and we would look to close out positions prior to the implementation of the changes.
NIFTY NEXT50 Index Rebalance: Significant Impact for an Overlooked Index
- Adani Total Gas (ATGL IN), Bharat Electronics (BHE IN), Hindustan Aeronautics (HNAL IN), IRCTC (IRCTC IN), Mphasis (MPHL IN), Samvardhana Motherson (MSS IN) and Shree Cement (SRCM IN) are adds.
- Adani Enterprises (ADE IN), Jubilant Foodworks (JUBI IN), Lupin (LPC IN), Mindtree (MTCL IN), Punjab National Bank (PNB), Steel Authority of India (SAIL) and Zydus Lifesciences (ZYDUSLIF IN) are deletes.
- There is significant impact on a lot of the stocks in terms of days of delivery volume to trade. Given the index is overlooked, there could be significant price movements.
NIFTY50 Index Rebalance: Adani Enterprises Replaces Shree Cement
- Adani Enterprises (ADE IN) will replace Shree Cement (SRCM IN) in the NIFTY Index (NIFTY INDEX) at the close of trading on 29 September.
- We had forecast the change in April and Adani Enterprises (ADE IN) is up over 60% since then while Shree Cement (SRCM IN) is down a bit.
- Passive NIFTY Index (NIFTY INDEX) trackers will need to buy over 7% of the real float on Adani Enterprises (ADE IN). The stock could continue to move higher.
China Comm Const (1800 HK): Key Takeaways from Post-1H22 Call
- China Communications Construction (1800 HK) should see positive new contract momentum in 2H22. We also expect softening in cost pressure to bring about better margin.
- It is actively looking to recycle and realise the value of its assets and good progress are expected in 2H22. Such moves will narrow the currently deeply discounted 0.18x P/B.
- With order backlog amounting to 4.6x of annualised 1H22 revenue, earnings prospects are well secured, making its FY22F PER of 2.6x and FY23F of 2.3x very cheap.
NIFTY Sep 2022 Rebal: Adani Enterprises and Adani Total Gas Are Top Positives
- The September 2022 Rebalance results for the NIFTY 50, 100, and 500 Indices were announced after the close on 1st September 2022.
- There will be one ADD/DEL for the NIFTY 50 Index and 6 ADDs/DELs for the NIFTY 100 Index, mostly in line with our expectations.
- In this insight, we take a closer look at our expectations for index flows and potential trading ideas.
Sany Profit Falls 73.85% as Demand for Construction Gear Dries Up
- Sany Heavy Industry, one of China’s largest construction machinery makers, reported a plunge in first-half profit as slower growth and Covid restrictions reduce demand for building equipment.
- Revenue fell 40.9% to 39.7 billion yuan ($5.76 billion) for the first six months of 2022, the company said Tuesday. Net income plummeted 73.85% to 2.63 billion yuan.
- Excavators are Sany’s core product. In the first half, the company’s excavator sales declined 35.6% year-on-year to 16.7 billion yuan
United Airlines: Sustainable Aviation Fuel Update & Other Drivers
- United Airlines had a disappointing quarter despite seeing an unprecedented return of customers.
- In this quarter, Cargo remained strong and premium leisure has been a bright spot as the domestic revenue growth of premium cabins outpaces the economy cabin.
- We provide the United Airlines stock with a ‘Hold’ rating with a revised target price.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
