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>
<a href="https://www.smartkarma.com/entities/idp-education-ltd" target="_blank" data-smartkarma-citation="entities:1098:1" rel="noopener">IDP Education (IEL AU)</a> and <a href="https://www.smartkarma.com/entities/lendlease-group" target="_blank" data-smartkarma-citation="entities:11248:1" rel="noopener">Lendlease Group (LLC AU)</a> will be deleted from the MV Australia Equal Weight Index at the June rebalance.</li>
<li>Constituent, float and capping changes will result in a one-way turnover of 5% and in a round-trip trade of A$228m.</li>
<li>There are many stocks from the S&amp;P/ASX index family that will have same way or opposing flows from <a href="https://www.smartkarma.com/entities/vaneck-vectors-australian-equal-weight-etf" target="_blank" data-smartkarma-citation="entities:24297:1" rel="noopener">VanEck Vectors Australian Equal Weight ETF (MVW AU)</a>. </li>
</ul>



IDP Education (IEL AU) and Lendlease Group (LLC AU) will be deleted from the MV Australia Equal Weight Index at the June rebalance.
Constituent, float and capping changes will result in a one-way turnover of 5% and in a round-trip trade of A$228m.
There are many stocks from the S&amp;P/ASX index family that will have same way or opposing flows from VanEck Vectors Australian Equal Weight ETF (MVW AU). 


MV Australia Equal Weight Index Rebalance: IDP Education (IEL) & Lendlease Group (LLC) Out

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

Equity Bottom-Up

Commonwealth Bank of Australia / Equity Bottom-Up

<ul>
<li>It is not only NPLs that we must worry about for banks, but also loans that can turn NPL amidst a worsening economic backdrop</li>
<li>CBA's past due loans but not impaired are up 43% in past two years and this bucket of loans is now 2.6x NPLs compared with 1.9x NPLs recently</li>
<li>Australia shows surging insolvencies across many sectors through 17 March 2024 and this can mean past due loans are more prone to migrating to turn NPL</li>
</ul>


It is not only NPLs that we must worry about for banks, but also loans that can turn NPL amidst a worsening economic backdrop
CBA's past due loans but not impaired are up 43% in past two years and this bucket of loans is now 2.6x NPLs compared with 1.9x NPLs recently
Australia shows surging insolvencies across many sectors through 17 March 2024 and this can mean past due loans are more prone to migrating to turn NPL


CBA - Sharply Higher Past Due Loans, but Not Impaired, Alongside Surge of Australia Insolvencies

<ul>
<li>AMP released 1H23 numbers with 24-26% underlying NPAT growth in 2 key divisions</li>
<li>AUD610m of returned capital in past 12 months will see AUD140m added by October</li>
<li>AMP Bank is unlike peers, which is deposit-funded, small, focused on mortgages</li>
</ul>


AMP released 1H23 numbers with 24-26% underlying NPAT growth in 2 key divisions
AUD610m of returned capital in past 12 months will see AUD140m added by October
AMP Bank is unlike peers, which is deposit-funded, small, focused on mortgages


AMP - Strong Numbers Released,, Returning Capital, Paying Down Debt, Deposit Funded, Mortgage Bank

National Australia Bank / Equity Bottom-Up

<ul>
<li>NAB holds significantly more maturing debt in the coming year than its largest 3 peer banks in Australia and also more than the 3 banks in Singapore, by comparison</li>
<li>The bank has grown its business loans aggressively, which can see lumpy bad loans in a poor economy, with high unseasoned loans, yet its HoH credit costs were flat</li>
<li>CRE loans are meaningful at NAB, adding another risk to maturing debt at the top of the rate cycle with what appears to optimistic credit costs in recent results</li>
</ul>


NAB holds significantly more maturing debt in the coming year than its largest 3 peer banks in Australia and also more than the 3 banks in Singapore, by comparison
The bank has grown its business loans aggressively, which can see lumpy bad loans in a poor economy, with high unseasoned loans, yet its HoH credit costs were flat
CRE loans are meaningful at NAB, adding another risk to maturing debt at the top of the rate cycle with what appears to optimistic credit costs in recent results


NAB - Maturing Debt AUD40bn | At Top of Rate Cycle | With High Unseasoned Loans, CRE Loans

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Australia & New Zealand Bankin / Event-Driven

<ul>
<li>This morning, ACCC <a href="https://www.accc.gov.au/media-release/accc-seeks-further-views-on-anzs-proposed-acquisition-of-suncorp-bank" target="_blank" rel="noopener">announced</a> that it had released a "<a href="https://www.accc.gov.au/system/files/public-registers/documents/Statement%20of%20preliminary%20views%20-%2004.04.23%20-%20PR%20-%20MA1000023%20ANZ%20Suncorp.pdf" target="_blank" rel="noopener">Statement of Preliminary Views</a>" on the ANZ/Suncorp deal and sought further views. </li>
<li>For now, the ACCC questions "the nature, likelihood, and extend of claimed public benefits" including synergies or claims regarding investment in Queensland. </li>
<li>Based on my reading of the document, this view is likely to carry over through the final decision due mid-June 2023. That means there's likely a trade here. </li>
</ul>


This morning, ACCC announced that it had released a "Statement of Preliminary Views" on the ANZ/Suncorp deal and sought further views. 
For now, the ACCC questions "the nature, likelihood, and extend of claimed public benefits" including synergies or claims regarding investment in Queensland. 
Based on my reading of the document, this view is likely to carry over through the final decision due mid-June 2023. That means there's likely a trade here. 


ACCC Sour on ANZ/Suncorp Bank Deal Makes for A Good Trade

Australia

Bendigo and Adelaide Bank Limited offers a variety of banking and other financial services, including first mortgage housing finance, retail and business banking, commercial finance, funds management, treasury and foreign exchange services, superannuation and trustee services. Bendigo also offers internet banking.

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Bendigo And Adelaide Bank (BEN AU)

MV Australia Equal Weight Index Rebalance: IDP Education (IEL) & Lendlease Group (LLC) Out

IDP Education and Lendlease Group will be deleted from the MV Australia Equal Weight Index. Constituent, float and capping changes will result in 1...

Brian Freitas

CBA - Sharply Higher Past Due Loans, but Not Impaired, Alongside Surge of Australia Insolvencies

CBA shows sharply high past due loans that are not impaired, alongside worsening insolvencies in Australia. There are implications for its...

Daniel Tabbush

AMP - Strong Numbers Released,, Returning Capital, Paying Down Debt, Deposit Funded, Mortgage Bank

AMP is now launching an online bank, and this is a real concern. A the same time, its margin pressure at its AMP Bank is not strong, new guidance...

Daniel Tabbush

NAB - Maturing Debt AUD40bn | At Top of Rate Cycle | With High Unseasoned Loans, CRE Loans

NAB has more maturity debt than large peers, which can mean worse NIM impact when refinancing at the top of the rate cycle. Business loan growth...

Daniel Tabbush

ACCC Sour on ANZ/Suncorp Bank Deal Makes for A Good Trade

The ACCC has come out pretty clearly against the ANZ/SunCorp Bank deal, and seems to prefer a deal where SunCorp Bank would be merged with another...

Travis Lundy

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