Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The MSCI revised the Adani Group weighting after reviewing FF. <a href="https://www.smartkarma.com/entities/adani-enterprises-ltd" target="_blank" data-smartkarma-citation="entities:245:1" rel="noopener">Adani Enterprises (ADE IN)</a>affected. <a href="https://www.smartkarma.com/entities/adani-green-energy-ltd" target="_blank" data-smartkarma-citation="entities:29012:1" rel="noopener">Adani Green (ADANIGR IN)</a>, <a href="https://www.smartkarma.com/entities/adani-power-ltd" target="_blank" data-smartkarma-citation="entities:247:1" rel="noopener">Adani Power (ADANI IN)</a>, and <a href="https://www.smartkarma.com/entities/adani-ports-special-economic-zone-ltd" target="_blank" data-smartkarma-citation="entities:246:1" rel="noopener">Adani Ports (ADSEZ IN)</a> not affected. </li>
<li>
<a href="https://www.smartkarma.com/entities/hongkong-land-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15465:1" rel="noopener">Hongkong Land (HKL SP)</a> is dirt cheap at 0.3x P/B. It is a China re-opening play. Plus the company is buying back shares. </li>
<li>The Nikkei didn't write an article on <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba (6502 JP)</a> when everyone else did. They waited another day, with what appears to be a zinger on price at "about ¥2trln". </li>
</ul>


The MSCI revised the Adani Group weighting after reviewing FF. Adani Enterprises (ADE IN)affected. Adani Green (ADANIGR IN), Adani Power (ADANI IN), and Adani Ports (ADSEZ IN) not affected. 

Hongkong Land (HKL SP) is dirt cheap at 0.3x P/B. It is a China re-opening play. Plus the company is buying back shares. 
The Nikkei didn't write an article on Toshiba (6502 JP) when everyone else did. They waited another day, with what appears to be a zinger on price at "about ¥2trln". 


Last Week in SPACE: Adani Group, Hongkong Land, Toshiba, Haw Par, Renault/Nissan

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>We expect 5 changes to the <a href="https://www.smartkarma.com/entities/nifty-100-index" target="_blank" data-smartkarma-citation="entities:36051:1" rel="noopener">Nifty 100 Index (NSE100 INDEX)</a> at the March rebalance. The review period ends on 31 January and the announcement should be late February.</li>
<li>The largest impact of passive trading will be on <a href="https://www.smartkarma.com/entities/page-industries-ltd" target="_blank" data-smartkarma-citation="entities:4940:1" rel="noopener">Page Industries (PAG IN)</a>, <a href="https://www.smartkarma.com/entities/biocon-ltd" target="_blank" data-smartkarma-citation="entities:398:1" rel="noopener">Biocon Ltd (BIOS IN)</a>, <a href="https://www.smartkarma.com/entities/mphasis-ltd" target="_blank" data-smartkarma-citation="entities:7672:1" rel="noopener">Mphasis Ltd (MPHL IN)</a> and <a href="https://www.smartkarma.com/entities/abb-india-ltd" target="_blank" data-smartkarma-citation="entities:8703:1" rel="noopener">ABB India Ltd (ABB IN)</a>. </li>
<li>There are quite a few overlaps with the AMFI reclassification of stocks and there could be buying and selling from active fund managers over the next few weeks.</li>
</ul>


We expect 5 changes to the Nifty 100 Index (NSE100 INDEX) at the March rebalance. The review period ends on 31 January and the announcement should be late February.
The largest impact of passive trading will be on Page Industries (PAG IN), Biocon Ltd (BIOS IN), Mphasis Ltd (MPHL IN) and ABB India Ltd (ABB IN). 
There are quite a few overlaps with the AMFI reclassification of stocks and there could be buying and selling from active fund managers over the next few weeks.


NIFTY100 Index Rebalance Preview: Active Trading Before Passive Trading Kicks In

Travis Lundy

<ul>
<li>
<a href="https://www.smartkarma.com/entities/adani-enterprises-ltd" target="_blank" data-smartkarma-citation="entities:245:1" rel="noopener">Adani Enterprises (ADE IN)</a> ("ADL") on Tuesday announced a Board Meeting for Friday to consider capital raising options. Multiple media sources suggest a record Indian Follow-on Public Offering of INR200bn.</li>
<li>The company has bid for/bought multiple assets recently, and proposed investments plan of up to US$150bn in 10yrs in renewables, cement, airports, healthcare to aim at a US$1trln valuation.</li>
<li>This will get complicated, interesting, and is not necessarily going to come out well.</li>
</ul>



Adani Enterprises (ADE IN) ("ADL") on Tuesday announced a Board Meeting for Friday to consider capital raising options. Multiple media sources suggest a record Indian Follow-on Public Offering of INR200bn.
The company has bid for/bought multiple assets recently, and proposed investments plan of up to US$150bn in 10yrs in renewables, cement, airports, healthcare to aim at a US$1trln valuation.
This will get complicated, interesting, and is not necessarily going to come out well.


Adani Enterprises - A Record Follow-On Public Offering May Be in the Works

<ul>
<li>There was a lot of confusion around how NSE Indices would handle the <a href="https://www.smartkarma.com/entities/housing-development-finance" target="_blank" data-smartkarma-citation="entities:252:1" rel="noopener">HDFC Limited (HDFC IN)</a> / <a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank (HDFCB IN)</a> merger in its indices.</li>
<li>The market consultation seeks to change the index methodology to bring it in line with other index providers. That will result in much lower turnover than the existing index methodology.</li>
<li>
<a href="https://www.smartkarma.com/entities/pidilite-industries-ltd" target="_blank" data-smartkarma-citation="entities:20573:1" rel="noopener">Pidilite Industries (PIDI IN)</a> is a high probability add to the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index</a> possibly in the first quarter of 2023. There will also be changes to <a href="https://www.smartkarma.com/entities/nifty-next-50-index" target="_blank" data-smartkarma-citation="entities:36053:1" rel="noopener">Nifty Next 50 Index</a>.</li>
</ul>


There was a lot of confusion around how NSE Indices would handle the HDFC Limited (HDFC IN) / HDFC Bank (HDFCB IN) merger in its indices.
The market consultation seeks to change the index methodology to bring it in line with other index providers. That will result in much lower turnover than the existing index methodology.

Pidilite Industries (PIDI IN) is a high probability add to the NIFTY Index possibly in the first quarter of 2023. There will also be changes to Nifty Next 50 Index.


NIFTY Indices: HDFC/HDFCB Merger Driven Market Consultation

<ul>
<li>
<a href="https://www.smartkarma.com/entities/adani-enterprises-ltd" target="_blank" data-smartkarma-citation="entities:245:1" rel="noopener">Adani Enterprises (ADE IN)</a> will replace <a href="https://www.smartkarma.com/entities/shree-cement-ltd" target="_blank" data-smartkarma-citation="entities:10531:1" rel="noopener">Shree Cement (SRCM IN)</a> in the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index (NIFTY INDEX)</a> at the close of trading on 29 September.</li>
<li>We had forecast the change in April and <a href="https://www.smartkarma.com/entities/adani-enterprises-ltd" target="_blank" data-smartkarma-citation="entities:245:1" rel="noopener">Adani Enterprises (ADE IN)</a> is up over 60% since then while <a href="https://www.smartkarma.com/entities/shree-cement-ltd" target="_blank" data-smartkarma-citation="entities:10531:1" rel="noopener">Shree Cement (SRCM IN)</a> is down a bit.</li>
<li>Passive <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index (NIFTY INDEX)</a> trackers will need to buy over 7% of the real float on <a href="https://www.smartkarma.com/entities/adani-enterprises-ltd" target="_blank" data-smartkarma-citation="entities:245:1" rel="noopener">Adani Enterprises (ADE IN)</a>. The stock could continue to move higher. </li>
</ul>



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. 


NIFTY50 Index Rebalance: Adani Enterprises Replaces Shree Cement

India

ACC Limited  manufactures a range of cements and blended cements. The Company also manufactures gypsum and refractory products such as Brown Tabular Alumina. The Company provides turnkey and application consulting services for setting up and operating cement plants and refractories. The Company owns cement plants throughout India.

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ACC Ltd (ACC IN)

Last Week in SPACE: Adani Group, Hongkong Land, Toshiba, Haw Par, Renault/Nissan

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

NIFTY100 Index Rebalance Preview: Active Trading Before Passive Trading Kicks In

There should be 5 changes to the NIFTY100 in March. Quite a few names overlap with the potential AMFI reclassification of stocks which will result...

Brian Freitas

Adani Enterprises - A Record Follow-On Public Offering May Be in the Works

ADANI ENTERPRISES has a board meeting Friday to discuss/approve a capital raise. The stock is up 25x+ in 3yrs and trades at 20x book and 300x PER...

Travis Lundy

NIFTY Indices: HDFC/HDFCB Merger Driven Market Consultation

NSE Indices' market consultation on merger/demerger treatment will significantly reduce index turnover. We expect the HDFC/HDFCB merger to complete...

Brian Freitas

NIFTY50 Index Rebalance: Adani Enterprises Replaces Shree Cement

Adani Ent will replace Shree Cement in the NIFTY50 at the close on 29 Sep. With passives needing to buy over 28 days of delivery volume and 7% of...

Brian Freitas

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