Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>On the 30th of September, the <a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd (VEDL IN)</a> AGM took place to approve the audited financial results of the fiscal year ended 31 March and to re-appoint a certain number of directors. Voting results are linked <a href="https://www.bseindia.com/stock-share-price/vedanta-limited/vedl/500295/voting-results/" target="_blank" rel="noopener">here</a>. </p>
<p>On 1 October, <strong>Vedanta Limited</strong> reported that the promoters Vedanta Resources Limited and its indirect subsidiaries namely, Vedanta Holdings Mauritius Limited and Vedanta Holdings Mauritius II Limited, had, with the assistance of its agent KFin Technologies Private Limited, completed the dispatch of <a href="https://www.bseindia.com/xml-data/corpfiling/AttachHis/0a3309f5-7c2a-4b9e-9d5c-90c16c541dba.pdf" target="_blank" rel="noopener">Letter of Offer</a> to all public shareholders.</p>
<p>2 October saw the <a href="https://www.bseindia.com/xml-data/corpfiling/AttachLive/75e5b6d2-92f5-40f7-85bf-12a8e0cca785.pdf" target="_blank" rel="noopener">announcements</a> of the Letter of Offer along with a minor corrigendum in the newspapers.</p>
<p>On 3 October, <strong>Vedanta Limited</strong> reported its Q1 financials on Saturday 3 October, some 9-10 weeks later than normal (since the 2010-2011 year, the latest Q1 financials had ever been released was 31 July), with no good reason for the delay noted. Results came in many forms: <a href="https://www.vedantalimited.com/InvestorReports/Standalone%20Results%20June%202020.pdf" target="_blank" rel="noopener">Standalone financials</a>, <a href="https://www.vedantalimited.com/InvestorReports/Consol%20Results%20June%202020.pdf" target="_blank" rel="noopener">Consolidated Financials</a>, and a <a href="https://www.vedantalimited.com/InvestorReports/VEDL%20Results%20Presentation%20Q1%20FY2021.pdf" target="_blank" rel="noopener">Presentation</a>, but unlike prior years, there is no transcript.</p>
<div class="content-highlight">
<p>There are some really interesting pieces of information in this set of financial reports, especially in the auditor's letter. </p>
<p><strong>It appears to tell you more about the possibilities of the Delisting Offer. </strong></p>
</div>
<p>I note that the Reverse Book Build Auction commences tomorrow 5 October and goes through 9 October. </p>
<p>Details below the fold. </p>
<section>
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<hr>
<div>
<p><em>Insights previously published in the timeline of the Vedanta Delisting Offer are listed below.</em></p>
</div>
<div>
<table class="table table-striped">
<tbody>
<tr>
<td colspan="3" style="width: 724.8px;">
<h3>Relevant Insights To Date</h3>
</td>
</tr>
<tr>
<td style="width: 72px;"><strong>Date</strong></td>
<td style="width: 134.4px;"><strong>Theme or Ticker</strong></td>
<td style="width: 476.8px;"><strong>Insight Title</strong></td>
</tr>
<tr>
<td style="width: 72px;">2019</td>
<td style="width: 134.4px;">Indian M&amp;A Guide</td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/quiddity-india-m-a-guide-2019" target="_blank" data-smartkarma-citation="insights:30885" rel="noopener">Quiddity India M&amp;A Guide 2019</a> </td>
</tr>
<tr>
<td style="width: 72px;">24 May 2020</td>
<td style="width: 134.4px;">Delisting Offers</td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/indian-delisting-exit-offers-know-your-process-and-the-games-played" target="_blank" data-smartkarma-citation="insights:39683" rel="noopener">Indian Delisting/Exit Offers - Know Your Process and The Games Played</a> </td>
</tr>
<tr>
<td style="width: 72px;">19 Jun 2020</td>
<td style="width: 134.4px;">Failed Exit Offers</td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/failed-exit-offers-in-india-lessons-for-vedl-adani-and-hexw" target="_blank" data-smartkarma-citation="insights:40492" rel="noopener">Failed Exit Offers in India: Lessons for VEDL, ADANI, and HEXW?</a> </td>
</tr>
<tr>
<td style="width: 72px;">27 May 2020</td>
<td style="width: 134.4px;">
<a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd</a> </td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/vedanta-delisting-offer-how-it-goes-from-here" target="_blank" data-smartkarma-citation="insights:39761" rel="noopener">Vedanta Delisting Offer - How It Goes From Here</a> </td>
</tr>
<tr>
<td style="width: 72px;">22 Jun 2020</td>
<td style="width: 134.4px;">
<a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd</a> </td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/vedanta-delisting-offer-opportunities-and-timing" target="_blank" data-smartkarma-citation="insights:40528" rel="noopener">Vedanta Delisting Offer: Opportunities and Timing</a> </td>
</tr>
<tr>
<td style="width: 72px;">25 Jun 2020</td>
<td style="width: 134.4px;">
<a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd</a> </td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/vedanta-buyout-loan-huge-hindustan-zinc-div-but-may-change-vedanta-rbb-timing" target="_blank" data-smartkarma-citation="insights:40653" rel="noopener">Vedanta Buyout Loan = HUGE Hindustan Zinc Div But May Change Vedanta RBB Timing</a> </td>
</tr>
<tr>
<td style="width: 72px;">14 Jul 2020</td>
<td style="width: 134.4px;">
<a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd</a> </td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/putting-sightlines-on-the-vedanta-discovered-price" target="_blank" data-smartkarma-citation="insights:41236" rel="noopener">Putting Sightlines on the Vedanta Discovered Price</a> </td>
</tr>
<tr>
<td style="width: 72px;">18 Aug 2020</td>
<td style="width: 134.4px;">
<a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd</a> </td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/putting-sightlines-on-the-vedanta-delisting-offer-timing" target="_blank" data-smartkarma-citation="insights:42260" rel="noopener">Putting Sightlines on the Vedanta Delisting Offer TIMING</a> </td>
</tr>
<tr>
<td style="width: 72px;">7 Sep 2020</td>
<td style="width: 134.4px;">
<a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd</a> </td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/vedanta-reaching-the-end-game" target="_blank" data-smartkarma-citation="insights:42969" rel="noopener">Vedanta: Reaching The End Game</a> </td>
</tr>
<tr>
<td style="width: 72px;">17 Sep 2020</td>
<td style="width: 134.4px;">
<a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd</a> </td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/vedanta-more-fuel-for-the-fire" target="_blank" data-smartkarma-citation="insights:43316" rel="noopener">Vedanta : More Fuel For The Fire</a> </td>
</tr>
<tr>
<td style="width: 72px;">21 Sep 2020</td>
<td style="width: 134.4px;">
<a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd</a> </td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/vedanta-vedl-cash-raised-money-flow-and-how-it-affects-delisting-offer-discovered-price" target="_blank" data-smartkarma-citation="insights:43429" rel="noopener">Vedanta (VEDL): Cash Raised, Money Flow, and How It Affects Discovered Price</a> </td>
</tr>
<tr>
<td style="width: 72px;">29 Sep 2020</td>
<td style="width: 134.4px;">
<a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd</a> </td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/vedanta-reverse-book-build-auction-it-s-on-and-the-schedule-from-here-is-tight" target="_blank" data-smartkarma-citation="insights:43694" rel="noopener">Vedanta Reverse Book Build Auction - It’s On And the Schedule From Here Is Tight</a> </td>
</tr>
</tbody>
</table>
</div>
</div>
</section>

On the 30th of September, the Vedanta Ltd (VEDL IN) AGM took place to approve the audited financial results of the fiscal year ended 31 March and to re-appoint a certain number of directors. Voting results are linked here. 
On 1 October, Vedanta Limited reported that the promoters Vedanta Resources Limited and its indirect subsidiaries namely, Vedanta Holdings Mauritius Limited and Vedanta Holdings Mauritius II Limited, had, with the assistance of its agent KFin Technologies Private Limited, completed the dispatch of Letter of Offer to all public shareholders.
2 October saw the announcements of the Letter of Offer along with a minor corrigendum in the newspapers.
On 3 October, Vedanta Limited reported its Q1 financials on Saturday 3 October, some 9-10 weeks later than normal (since the 2010-2011 year, the latest Q1 financials had ever been released was 31 July), with no good reason for the delay noted. Results came in many forms: Standalone financials, Consolidated Financials, and a Presentation, but unlike prior years, there is no transcript.

There are some really interesting pieces of information in this set of financial reports, especially in the auditor's letter. 
It appears to tell you more about the possibilities of the Delisting Offer. 

I note that the Reverse Book Build Auction commences tomorrow 5 October and goes through 9 October. 
Details below the fold. 




Insights previously published in the timeline of the Vedanta Delisting Offer are listed below.






Relevant Insights To Date



Date
Theme or Ticker
Insight Title


2019
Indian M&amp;A Guide

Quiddity India M&amp;A Guide 2019 


24 May 2020
Delisting Offers

Indian Delisting/Exit Offers - Know Your Process and The Games Played 


19 Jun 2020
Failed Exit Offers

Failed Exit Offers in India: Lessons for VEDL, ADANI, and HEXW? 


27 May 2020

Vedanta Ltd 

Vedanta Delisting Offer - How It Goes From Here 


22 Jun 2020

Vedanta Ltd 

Vedanta Delisting Offer: Opportunities and Timing 


25 Jun 2020

Vedanta Ltd 

Vedanta Buyout Loan = HUGE Hindustan Zinc Div But May Change Vedanta RBB Timing 


14 Jul 2020

Vedanta Ltd 

Putting Sightlines on the Vedanta Discovered Price 


18 Aug 2020

Vedanta Ltd 

Putting Sightlines on the Vedanta Delisting Offer TIMING 


7 Sep 2020

Vedanta Ltd 

Vedanta: Reaching The End Game 


17 Sep 2020

Vedanta Ltd 

Vedanta : More Fuel For The Fire 


21 Sep 2020

Vedanta Ltd 

Vedanta (VEDL): Cash Raised, Money Flow, and How It Affects Discovered Price 


29 Sep 2020

Vedanta Ltd 

Vedanta Reverse Book Build Auction - It’s On And the Schedule From Here Is Tight 







Vedanta Limited Reports Results: KEY Info on Deal Funding Embedded

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.

Thematic (Sector/Industry)

<p>It is unclear which bank or NBFC will be next. <a href="https://www.smartkarma.com/entities/dewan-housing-finance-corp" target="_blank" data-smartkarma-citation="entities:8142:1" rel="noopener">Dewan Housing Finance (DEWH IN)</a> went bankrupt last year. IL&amp;FS went bankrupt the year before. This year we have <a href="https://www.smartkarma.com/entities/yes-bank-ltd" target="_blank" data-smartkarma-citation="entities:767:1" rel="noopener">Yes Bank (YES IN)</a> being nationalized or rescued or both, but effectively the same fate. It is unclear who will be next. Perhaps a bank or an NBFC which exaggerated credit growth during the past two years, with a limited amount of capital and with relatively high exposure to weak sectors? The collapse in oil prices is salt on India’s open wound - at least for lenders to oil companies with weakening financials.</p>

It is unclear which bank or NBFC will be next. Dewan Housing Finance (DEWH IN) went bankrupt last year. IL&amp;FS went bankrupt the year before. This year we have Yes Bank (YES IN) being nationalized or rescued or both, but effectively the same fate. It is unclear who will be next. Perhaps a bank or an NBFC which exaggerated credit growth during the past two years, with a limited amount of capital and with relatively high exposure to weak sectors? The collapse in oil prices is salt on India’s open wound - at least for lenders to oil companies with weakening financials.

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

<p>The Government of India has been divesting its stake in Central Public Sector Enterprises (CPSE) and other public companies held by the Specified Undertaking of the Unit Trust of India (SUUTI) through the ETF route via the <a href="https://www.smartkarma.com/entities/cpse-etf" target="_blank" rel="noopener" data-smartkarma-citation="entities:28191:1">R* Shares CPSE ETF (CPSEBE IN)</a> and <a href="https://www.smartkarma.com/entities/bharat-22-etf" target="_blank" rel="noopener" data-smartkarma-citation="entities:28307:1">BHARAT 22 ETF (ICICIB22 IN)</a> ETFs.</p><p>Since launch, the <a href="https://www.smartkarma.com/entities/cpse-etf" target="_blank" rel="noopener" data-smartkarma-citation="entities:28191:1">R* Shares CPSE ETF (CPSEBE IN)</a> ETF has raised INR 665bn while the <a href="https://www.smartkarma.com/entities/bharat-22-etf" target="_blank" rel="noopener" data-smartkarma-citation="entities:28307:1">BHARAT 22 ETF (ICICIB22 IN)</a> ETF has raised INR 416bn. The AUM for the two ETFs as of the end of January 2020 is INR 90.75bn and INR 67.53bn respectively.</p><p>With the Government looking to raise funds from divestments to bridge the fiscal deficit, we look at the relevance of the ETFs in meeting this objective and identify stocks that would need to be excluded from the indices for the Government to continue with further fund offerings.</p>

The Government of India has been divesting its stake in Central Public Sector Enterprises (CPSE) and other public companies held by the Specified Undertaking of the Unit Trust of India (SUUTI) through the ETF route via the R* Shares CPSE ETF (CPSEBE IN) and BHARAT 22 ETF (ICICIB22 IN) ETFs.Since launch, the R* Shares CPSE ETF (CPSEBE IN) ETF has raised INR 665bn while the BHARAT 22 ETF (ICICIB22 IN) ETF has raised INR 416bn. The AUM for the two ETFs as of the end of January 2020 is INR 90.75bn and INR 67.53bn respectively.With the Government looking to raise funds from divestments to bridge the fiscal deficit, we look at the relevance of the ETFs in meeting this objective and identify stocks that would need to be excluded from the indices for the Government to continue with further fund offerings.

India - The Future of CPSE and BHARAT22 ETFs & Potential Rebalance Candidates

Index Rebalance

<div>
<p>Last evening, the Index Maintenance Sub-Committee of NSE Indices Limited decided to make some changes to the NIFTY CPSE index. <a href="https://www.smartkarma.com/entities/indian-oil-corp-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:7781:1">Indian Oil Corp (IOCL IN)</a> and <a href="https://www.smartkarma.com/entities/power-finance-corporation" target="_blank" rel="noopener" data-smartkarma-citation="entities:13579:1">Power Finance (POWF IN)</a> are being dropped from the index, while <a href="https://www.smartkarma.com/entities/cochin-shipyard-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:24261:1">Cochin Shipyard (COCHIN IN)</a>, <a href="https://www.smartkarma.com/entities/nhpc-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:7826:1">Nhpc Ltd (NHPC IN)</a>, <a href="https://www.smartkarma.com/entities/nmdc-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:2016:1">Nmdc Ltd (NMDC IN)</a> and <a href="https://www.smartkarma.com/entities/power-grid-corporation-of-india-limited" target="_blank" rel="noopener" data-smartkarma-citation="entities:12621:1">Power Grid Corporation Of India (PWGR IN)</a> are being included. This takes the number of constituents from 10 to 12.</p>
<p>The eligibility criteria has been tweaked to include stocks having more than 51% Government holding, down from the 51.5% needed earlier.</p>
<p>We expect <a href="https://www.smartkarma.com/entities/indian-oil-corp-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:7781:1">Indian Oil Corp (IOCL IN)</a> and <a href="https://www.smartkarma.com/entities/power-finance-corporation" target="_blank" rel="noopener" data-smartkarma-citation="entities:13579:1">Power Finance (POWF IN)</a> to trade significantly lower this week with 24 days and 17 days of average volume to sell, respectively.</p>
<p>While the headline days to buy on the inclusions is very big, there is a high probability of the ETF buying the shares from the Government of India at the closing price on 23 January. We do not expect the inclusion names to trade higher and any price spikes on the headlines could be sold into.</p>
</div><div><p></p></div>


Last evening, the Index Maintenance Sub-Committee of NSE Indices Limited decided to make some changes to the NIFTY CPSE index. Indian Oil Corp (IOCL IN) and Power Finance (POWF IN) are being dropped from the index, while Cochin Shipyard (COCHIN IN), Nhpc Ltd (NHPC IN), Nmdc Ltd (NMDC IN) and Power Grid Corporation Of India (PWGR IN) are being included. This takes the number of constituents from 10 to 12.
The eligibility criteria has been tweaked to include stocks having more than 51% Government holding, down from the 51.5% needed earlier.
We expect Indian Oil Corp (IOCL IN) and Power Finance (POWF IN) to trade significantly lower this week with 24 days and 17 days of average volume to sell, respectively.
While the headline days to buy on the inclusions is very big, there is a high probability of the ETF buying the shares from the Government of India at the closing price on 23 January. We do not expect the inclusion names to trade higher and any price spikes on the headlines could be sold into.


NIFTY CPSE Index Review - HUGE Impact & Possibly an Upcoming FFO

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

Chang Chun Eurasia Group Co. / Equity Bottom-Up

Market Insights with Eurasia Group - US-China Phase 1 deal a limited truce rather than peace

India

Bharat Petroleum Corporation Limited explores for and refines crude oil. The Company manufactures petroleum, petroleum products, lubricants, liquefied petroleum gas, aromatics like benzene and toluene, and other related products. Bharat has retail outlets throughout the country.

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Bharat Petroleum Corp (BPCL IN)

Vedanta Limited Reports Results: KEY Info on Deal Funding Embedded

$Vedanta Limit

Travis Lundy

India Banks – An Open Wound

It is unclear which bank or NBFC will be next. Dewan Housing Finance (DEWH IN) went bankrupt last year. IL&FS went bankrupt the year before....

Daniel Tabbush

India - The Future of CPSE and BHARAT22 ETFs & Potential Rebalance Candidates

The Government of India has been divesting its stake in Central Public Sector Enterprises (CPSE) and other public companies held by the Specified...

Brian Freitas

NIFTY CPSE Index Review - HUGE Impact & Possibly an Upcoming FFO

Last evening, the Index Maintenance Sub-Committee of NSE Indices Limited decided to make some changes to the NIFTY CPSE index. Indian Oil Corp...

Brian Freitas

Market Insights with Eurasia Group - US-China Phase 1 deal a limited truce rather than peace

The recent conclusion of a US-China “Phase 1” trade deal signals a limited truce that will likely last through the US...

Singapore Exchange Ltd (SGX)

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