Equity Analyst, Event-driven, Quiddity Advisors

Janaghan Jeyakumar, CFA

Equity Analyst, Event-driven

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

SBI Cards & Payment Services / Event-Driven

SBI Cards and Payment Services Private Limited provides credit card services. The Company offers payment products and services in the form of corporate and credit cards with incentive and rewards programs. SBI Cards and Payment Services serves customers in India.

SBI Cards & Payment Services (SBICARD IN)

<ul>
<li>NIFTY 50 represents the 50 largest stocks listed in the National Stock Exchange (NSE) of India and the NIFTY Next 50 index tracks the next 50 largest names.</li>
<li>In this insight, we take a look at the names leading the race to become ADDs/DELs during the September 2024 index rebal event.</li>
<li>More than 50% of the 6-month reference period is now complete. There are a couple of changes to the expected ADDs/DELs list since my last insight.</li>
</ul>


NIFTY 50 represents the 50 largest stocks listed in the National Stock Exchange (NSE) of India and the NIFTY Next 50 index tracks the next 50 largest names.
In this insight, we take a look at the names leading the race to become ADDs/DELs during the September 2024 index rebal event.
More than 50% of the 6-month reference period is now complete. There are a couple of changes to the expected ADDs/DELs list since my last insight.


Quiddity Leaderboard NIFTY Sep 24: Strong Flow Rationale for LONG Jio Financial - SHORT SBI Cards

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

LG Chem Ltd. is a chemical manufacturer. The Company's products include petrochemicals, plastic resins, and engineering plastics. LG Chem also produces industrial and electronic materials.

<ul>
<li>Despite time until screening, predictions likely hold due to market cap gaps; all candidates are banks, benefiting from recent momentum.</li>
<li>Historical patterns show profit-taking selling affecting price impact, particularly on additions with significant pre-inclusion price rises. Monitor banks' pre-June 14th price appreciation to anticipate impact distortions.</li>
<li>Shorting LG Chem and LG Energy Solution based on high price cointegration, consider basket-trading them before the rebalancing, using the battery sector as a long hedge.</li>
</ul>


Despite time until screening, predictions likely hold due to market cap gaps; all candidates are banks, benefiting from recent momentum.
Historical patterns show profit-taking selling affecting price impact, particularly on additions with significant pre-inclusion price rises. Monitor banks' pre-June 14th price appreciation to anticipate impact distortions.
Shorting LG Chem and LG Energy Solution based on high price cointegration, consider basket-trading them before the rebalancing, using the battery sector as a long hedge.


Underexposed Flow Trading Opportunity: LONG Banks & SHORT LG Chem/Energy on June 14

Huatai Securities Co Ltd (A) / Event-Driven

Huatai Securities Co., Ltd. provides financial company. The Company provides securities brokerage services, research consulting services, investment banking and direct investment services, fixed-income services and asset management services.

<ul>
<li>SSE 50 and SSE 180, respectively, aim to represent the performance of the 50 and 180 largest and most liquid A-share stocks listed on the Shanghai Stock Exchange.</li>
<li>The 12-month reference period used for the June 2024 review is now complete. The SSE 180 expected ADDs/DELs list has changed slightly since I published my last insight (<a href="https://www.smartkarma.com/insights/quiddity-leaderboard-sse50-180-jun-24-past-trades-successful-but-time-to-unwind-some" target="_blank" rel="noopener">link</a>).</li>
<li>In this insight, we take a look at our final expectations for index changes during the June 2024 index rebal event.</li>
</ul>


SSE 50 and SSE 180, respectively, aim to represent the performance of the 50 and 180 largest and most liquid A-share stocks listed on the Shanghai Stock Exchange.
The 12-month reference period used for the June 2024 review is now complete. The SSE 180 expected ADDs/DELs list has changed slightly since I published my last insight (link).
In this insight, we take a look at our final expectations for index changes during the June 2024 index rebal event.


Quiddity Leaderboard SSE50/180 Jun 24: US$2bn One-Way; LONGs up +9.8% Vs SHORTs in ~2 Months

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Many have missed out on the 14%, or 2,300 points, rally of the HSI in the last 9 trading days. There are still several stocks that look interesting now.</li>
<li>
<a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto (2015 HK)</a>, <a href="https://www.smartkarma.com/entities/link-reit" target="_blank" data-smartkarma-citation="entities:872:1" rel="noopener">Link REIT (823 HK)</a>, <a href="https://www.smartkarma.com/entities/china-mengniu-dairy-co" target="_blank" data-smartkarma-citation="entities:354:1" rel="noopener">China Mengniu Dairy Co (2319 HK)</a>, <a href="https://www.smartkarma.com/entities/hang-lung-properties-ltd" target="_blank" data-smartkarma-citation="entities:49:1" rel="noopener">Hang Lung Properties (101 HK)</a> and <a href="https://www.smartkarma.com/entities/galaxy-entertainment-group-limited" target="_blank" data-smartkarma-citation="entities:806:1" rel="noopener">Galaxy Entertainment Group (27 HK)</a> are massive laggards YTD.</li>
<li>As they have only experienced limited rebounds from the 19-Apr trough, they are set to catch up. Also, their earnings prospects look positive this year. </li>
</ul>


Many have missed out on the 14%, or 2,300 points, rally of the HSI in the last 9 trading days. There are still several stocks that look interesting now.

Li Auto (2015 HK), Link REIT (823 HK), China Mengniu Dairy Co (2319 HK), Hang Lung Properties (101 HK) and Galaxy Entertainment Group (27 HK) are massive laggards YTD.
As they have only experienced limited rebounds from the 19-Apr trough, they are set to catch up. Also, their earnings prospects look positive this year. 


HK Strategy: Where Are the Short-Term Opportunities?

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Rio Tinto Limited is an international mining company.  The Company has interests in mining for aluminum, borax, coal, copper, gold, iron ore, lead, silver, tin, uranium, zinc, titanium dioxide feedstock, diamonds, talc and zircon. Dually-listed company with RIO LN.

<ul>
<li>The Discounts to NAV of covered holdcos mainly widened during April. Discounts to NAV: C.F.Alba, 49.1% (vs. 47.3%); GBL, 39% (vs. 38.1%); Heineken Holding, 17.3% (vs 16.7%); </li>
<li>Industrivärden C, 4.7% (vs. 1.4%); Investor B, 8.3% (vs. 6.1%); Porsche Automobile Holding, 41.1% (vs. 45.4%). Rio DLC spread tightened to 22.5% (vs. to 24.9%).</li>
<li>What seems interesting: Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).</li>
</ul>


The Discounts to NAV of covered holdcos mainly widened during April. Discounts to NAV: C.F.Alba, 49.1% (vs. 47.3%); GBL, 39% (vs. 38.1%); Heineken Holding, 17.3% (vs 16.7%); 
Industrivärden C, 4.7% (vs. 1.4%); Investor B, 8.3% (vs. 6.1%); Porsche Automobile Holding, 41.1% (vs. 45.4%). Rio DLC spread tightened to 22.5% (vs. to 24.9%).
What seems interesting: Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).


Selected European HoldCos and DLC: April'24 Report

Research on Long and Short Asian Largecap Ideas

Long and Short Ideas on Asian Largecaps
Research on Long and Short Asian Largecap Ideas

Quiddity Leaderboard NIFTY Sep 24: Strong Flow Rationale for LONG Jio Financial - SHORT SBI Cards

SBI Cards is an expected DEL for NIFTY Next 50 in Sep 24 and BSE 100 in Jun 24. Jio Financial is an expected ADD for both BSE 100 and BSE 200 in...

Janaghan Jeyakumar, CFA

Underexposed Flow Trading Opportunity: LONG Banks & SHORT LG Chem/Energy on June 14

This post highlights an upcoming flow trading event on June 14th, stemming from the annual rebalancing of Korea's two largest sector ETFs.

Sanghyun Park

Quiddity Leaderboard SSE50/180 Jun 24: US$2bn One-Way; LONGs up +9.8% Vs SHORTs in ~2 Months

I estimate one-way turnover to be roughly US$2bn. Since 12th March 2024, the LONGs have outperformed the SHORTs by 9.77%.

Janaghan Jeyakumar, CFA

HK Strategy: Where Are the Short-Term Opportunities?

Li Auto, Link REIT, China Mengniu, Hang Lung Properties, and Galaxy Entertainment are massive laggards YTD but the recent rebound from the trough...

Osbert Tang, CFA

Selected European HoldCos and DLC: April'24 Report

The Discounts to NAV of covered holdcos mainly widened during April. What seems interesting: Porsche SE vs. listed assets and the Rio DLC (long RIO...

Jesus Rodriguez Aguilar