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

Event-Driven

<ul>
<li>Float and capping changes will require passive trackers to sell <a href="https://www.smartkarma.com/entities/bank-central-asia-tbk-pt" target="_blank" data-smartkarma-citation="entities:440:1" rel="noopener">Bank Central Asia (BBCA)</a> and <a href="https://www.smartkarma.com/entities/adaro-energy-tbk-pt" target="_blank" data-smartkarma-citation="entities:6061:1" rel="noopener">Adaro Energy (ADRO)</a> while buying <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia (BBRI)</a> and <a href="https://www.smartkarma.com/entities/goto-gojek-tokopedia-tbk-pt" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">GoTo Gojek Tokopedia (GOTO)</a>. </li>
<li>There will be passive trading to other stocks too, though the impact and flow is not material on most of the stocks.</li>
<li>Passive trackers will trade at the close on 31 October, so there are only 3 days to implementation of the changes.</li>
</ul>


Float and capping changes will require passive trackers to sell Bank Central Asia (BBCA) and Adaro Energy (ADRO) while buying Bank Rakyat Indonesia (BBRI) and GoTo Gojek Tokopedia (GOTO). 
There will be passive trading to other stocks too, though the impact and flow is not material on most of the stocks.
Passive trackers will trade at the close on 31 October, so there are only 3 days to implementation of the changes.


IDX30/​​LQ45/IDX80 Index Rebalance: Float & Capping Changes on Tuesday

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Yesterday, Indonesia's second largest coal mining business <a href="https://www.smartkarma.com/entities/adaro-energy-tbk-pt" target="_blank" data-smartkarma-citation="entities:6061:1" rel="noopener">Adaro Energy (ADRO IJ)</a> announced a buyback. This follows another buyback which ended in December 2022.</li>
<li>The Sep21-Dec22 buyback bought back 1bn shares, but did not spend all the money allocated to the buyback. This new one might buy back a similar quantity.</li>
<li>Looking at Real World Float is the right frame of reference. And the stock was at a recent low vs a Peer Basket. </li>
</ul>


Yesterday, Indonesia's second largest coal mining business Adaro Energy (ADRO IJ) announced a buyback. This follows another buyback which ended in December 2022.
The Sep21-Dec22 buyback bought back 1bn shares, but did not spend all the money allocated to the buyback. This new one might buy back a similar quantity.
Looking at Real World Float is the right frame of reference. And the stock was at a recent low vs a Peer Basket. 


Adaro Energy (ADRO IJ) Buyback - A Decent Chunk of 1 Year ADV

Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

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.<ul><li><a href='#lucror-entity-6061'>Adaro Energy</a></li></ul>

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.Adaro Energy

David Blennerhassett

<ul>
<li>Fund manager <a href="https://www.smartkarma.com/entities/saratoga-investama-sedaya-tbk-pt" target="_blank" data-smartkarma-citation="entities:13714:1" rel="noopener">Saratoga Investama Sedaya (SRTG IJ)</a> is up 107% yoy, buoyed by its investment holdings in <a href="https://www.smartkarma.com/entities/merdeka-copper-gold-tbk-pt" target="_blank" data-smartkarma-citation="entities:28447:1" rel="noopener">Merdeka Copper Gold (MDKA IJ)</a> and <a href="https://www.smartkarma.com/entities/adaro-energy-tbk-pt" target="_blank" data-smartkarma-citation="entities:6061:1" rel="noopener">Adaro Energy (ADRO IJ)</a>.</li>
<li>The discount to NAV is ~31% against a one-year average of 37%.</li>
<li>Potential large divestments, such as its holding in <a href="https://www.smartkarma.com/entities/tower-bersama-infrastructure" target="_blank" data-smartkarma-citation="entities:3537:1" rel="noopener">Tower Bersama Infrastructure (TBIG IJ)</a>, could causer investors to substantially narrow the NAV discount. </li>
</ul>


Fund manager Saratoga Investama Sedaya (SRTG IJ) is up 107% yoy, buoyed by its investment holdings in Merdeka Copper Gold (MDKA IJ) and Adaro Energy (ADRO IJ).
The discount to NAV is ~31% against a one-year average of 37%.
Potential large divestments, such as its holding in Tower Bersama Infrastructure (TBIG IJ), could causer investors to substantially narrow the NAV discount. 


Unlocking Saratoga Investama (SRTG IJ)'s Holdco

Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Thematic (Sector/Industry)

<ul>
<li>In our October 2021 insight, we correctly anticipated a catch-up trade in Indonesian coal names: GEO is up 66.45%, Adaro is up 102% and ITMG is up 37.4%.</li>
<li>Coal is the new tobacco as coal stays stronger for longer due to limited capacity expansion. At spot prices, FY22 div yield is 48% for Adaro and 65% for ITMG.</li>
<li>Shares have re-rated but not as fast as improvement in profits, given historical payout ratios dividend yields in 2022 could be astronomically high capping downside risks.</li>
</ul>


In our October 2021 insight, we correctly anticipated a catch-up trade in Indonesian coal names: GEO is up 66.45%, Adaro is up 102% and ITMG is up 37.4%.
Coal is the new tobacco as coal stays stronger for longer due to limited capacity expansion. At spot prices, FY22 div yield is 48% for Adaro and 65% for ITMG.
Shares have re-rated but not as fast as improvement in profits, given historical payout ratios dividend yields in 2022 could be astronomically high capping downside risks.


Indonesian Coal = the New Tobacco? Dividend Bonanza Coming: 48-65% Dividend Yields Possible

Indonesia

PT Adaro Energy Tbk is a coal mining company. The Company and its subsidiaries currently deal in coal mining and trade, coal infrastructure and logistics, and mining contractor services.

Adaro Energy (ADRO IJ)

IDX30/LQ45/IDX80 Index Rebalance: Float & Capping Changes on Tuesday

Float and capping changes will be implemented at the close on 31 October and will require passive trackers to sell BBCA, ADRO and BMRI while buying...

Brian Freitas