In today’s briefing:
- Russia: MSCI/FTSE Flows in Case of Deletion
- NIFTY50 Index Rebalance: Apollo Hospitals to Replace IOC
- Toshiba – Why Renesas Might Be a Better Option for the Devices Business than an IPO
- Ukraine Invasion’s Semiconductor Impact
- STAR50 Index Rebalance: Index Committees Just Wanna Have Fun
Russia: MSCI/FTSE Flows in Case of Deletion
- Investment related sanctions by the US and UK Governments could lead to the deletion of some or all Russian equities from the MSCI and FTSE indices.
- Deletion from the FTSE All-World/All-Cap indices would result in an outflow of US$6.67bn, while deletion from the MSCI Standard/Small Cap indices would result in an outflow of US$15.74bn.
- The most selling will be on Gazprom PJSC (GAZP), LUKOIL (LKOH), Sberbank of Russia PJSC (SBER), MMC Norilsk Nickel PJSC (GMKN), Novatek PJSC (NVTK), Yandex (YNDX) and Tatneft PJSC (TATN).
NIFTY50 Index Rebalance: Apollo Hospitals to Replace IOC
- As expected, Apollo Hospitals Enterprise (APHS IN) will replace Indian Oil Corp (IOCL IN) in the NIFTY Index (NIFTY INDEX) after the close of trading on 30 March.
- The index methodology has been changed to make new listings eligible for index inclusion if they complete one month by the review cutoff date, down from three months earlier.
- Estimated one-way turnover is 0.63% and will result in a one-way trade of around INR 14bn. Passive trackers will have a lot to trade on the stocks.
Toshiba – Why Renesas Might Be a Better Option for the Devices Business than an IPO
- We have made no secret of the fact that we consider Toshiba’s restructuring plans to be unspectacular.
- Initially we saw no reason to separate the infrastructure business and saleable assets but with that issue addressed it is the position of the devices business which concerns us.
- This is because we feel it is rather undersized to stand on its own two feet… but we increasingly feel that Renesas could be the ideal home for the unit.
Ukraine Invasion’s Semiconductor Impact
- The SIA commented today on the impact to US semiconductor makers of sanctions against Russia
- Russia accounts for negligible consumption of technology products, so embargos should not materially impact chip sales
- The SIA believes that there are sufficient alternate sources of supply that the absence of Russian raw materials should not pose an immediate risk
STAR50 Index Rebalance: Index Committees Just Wanna Have Fun
- In keeping with tradition, the SSE and CSI have continued to use a 6 month minimum listing history. No one remembers how or why it started, but it carries on.
- There are only 10 trading days to implementation and passive funds will need to trade multiple days of ADV on the inclusions and exclusions.
- The adds, deletes and the SSE STAR50 (STAR50 INDEX) have moved in lockstep since November. The CSI500 Index has outperformed over the period opening up a trading opportunity.
Before it’s here, it’s on Smartkarma
