Materials, IPO & Equity Analyst

Venkat Ramana Nandyal

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Commodities

<p>we expand on our previous note <a href="https://www.smartkarma.com/insights/gold-is-it-the-beginning-of-new-golden-era-or-end-of-the-bull-run" target="_blank" data-smartkarma-citation="insights:12832" rel="noopener">Gold: Is It the Beginning of New Golden Era or End of the Bull Run?</a> </p><p>Our analysis of returns on gold and gold-stock indicates the following:</p><ul>
<li>Gold stocks and gold commodity had no returns in FY18,</li>
<li>YTD FY19 gold stocks returns were superior compared to gold commodity,</li>
<li>Our portfolio of 11 gold producers returned 55% YTD with a Sharpe ratio of ~2.</li>
<li>Given the volatility in markets, we believe that ‘flight to safety’ will continue in short to mid-term, supporting gold prices.</li>
</ul>

we expand on our previous note Gold: Is It the Beginning of New Golden Era or End of the Bull Run? Our analysis of returns on gold and gold-stock indicates the following:
Gold stocks and gold commodity had no returns in FY18,
YTD FY19 gold stocks returns were superior compared to gold commodity,
Our portfolio of 11 gold producers returned 55% YTD with a Sharpe ratio of ~2.
Given the volatility in markets, we believe that ‘flight to safety’ will continue in short to mid-term, supporting gold prices.


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>There are 4 additions for the <a href="https://www.smartkarma.com/entities/vaneck-gold-miners-etf-usa" target="_blank" data-smartkarma-citation="entities:32924:1" rel="noopener">VanEck Gold Miners ETF/USA (GDX US)</a> in March. Plus a whole bunch of float and capping changes.</li>
<li>Estimated one-way turnover is 7.5% and that leads to a round-trip trade of US$5.1bn. There are many stocks with multiple days of ADV to trade from passive trackers.</li>
<li>
<a href="https://www.smartkarma.com/entities/pan-american-silver-corp-ce7d7ca6-59e0-44f1-958f-e5b679750b06" target="_blank" data-smartkarma-citation="entities:25937:1" rel="noopener">Pan American Silver</a> and <a href="https://www.smartkarma.com/entities/royal-gold-inc" target="_blank" data-smartkarma-citation="entities:11226:1" rel="noopener">Royal Gold</a> are deletions from the <a href="https://www.smartkarma.com/entities/vaneck-vectors-junior-gold-miners-etf" target="_blank" data-smartkarma-citation="entities:32845:1" rel="noopener">VanEck Vectors Junior Gold Miners ETF</a> while <a href="https://www.smartkarma.com/entities/greatland-resources-ltd" target="_blank" data-smartkarma-citation="entities:47602:1" rel="noopener">Greatland Resources (GGP AU)</a> is an inclusion to the ASX100 Index.</li>
</ul>


There are 4 additions for the VanEck Gold Miners ETF/USA (GDX US) in March. Plus a whole bunch of float and capping changes.
Estimated one-way turnover is 7.5% and that leads to a round-trip trade of US$5.1bn. There are many stocks with multiple days of ADV to trade from passive trackers.

Pan American Silver and Royal Gold are deletions from the VanEck Vectors Junior Gold Miners ETF while Greatland Resources (GGP AU) is an inclusion to the ASX100 Index.


Gold Miners ETF (GDX US) March Rebalance: 4 Adds and US$5.1bn Trade

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>The MV Global Gold Miners index represents the performance of high and mid-cap gold and silver mining companies listed around the world.</li>
<li>There will be four ADDs for the March 2026 rebal event. We predicted two correctly and the other two were surprises.</li>
<li>We expect a one-way flow of US$2.7bn and a turnover of ~7.2% for March 2026. Most of this is recapping flows of the large caps.</li>
</ul>


The MV Global Gold Miners index represents the performance of high and mid-cap gold and silver mining companies listed around the world.
There will be four ADDs for the March 2026 rebal event. We predicted two correctly and the other two were surprises.
We expect a one-way flow of US$2.7bn and a turnover of ~7.2% for March 2026. Most of this is recapping flows of the large caps.


[Quiddity Index] MV Global Gold Miners Mar26 Rebal Results: Four ADDs; US$2.7bn One-Way

Northern Star Resources / Index Rebalance

<ul>
<li>The <a href="https://www.smartkarma.com/entities/vaneck-gold-miners-etf-usa" target="_blank" data-smartkarma-citation="entities:32924:1" rel="noopener">VanEck Gold Miners ETF/USA (GDX US)</a> will change benchmark from the NYSE Arca Gold Miners Index to the MarketVector Global Gold Miners Index at the close on 19 September.</li>
<li>The differences in the constituents between the two indices should result in 8 adds and 25 deletes. Estimated one-way turnover is 27.4% resulting in a round-trip trade of US$12.5bn.</li>
<li>The forecast adds have continued to underperform the forecast deletes as the big valuation gap that had opened up since the announcement of the benchmark switch narrows.</li>
</ul>


The VanEck Gold Miners ETF/USA (GDX US) will change benchmark from the NYSE Arca Gold Miners Index to the MarketVector Global Gold Miners Index at the close on 19 September.
The differences in the constituents between the two indices should result in 8 adds and 25 deletes. Estimated one-way turnover is 27.4% resulting in a round-trip trade of US$12.5bn.
The forecast adds have continued to underperform the forecast deletes as the big valuation gap that had opened up since the announcement of the benchmark switch narrows.


Gold Miners ETF (GDX US): Further Capping Pushes Trade to Over US$12.5bn

Amman Mineral Internasional / Index Rebalance

<ul>
<li>The <a href="https://www.smartkarma.com/entities/vaneck-gold-miners-etf-usa" target="_blank" data-smartkarma-citation="entities:32924:1" rel="noopener">VanEck Gold Miners ETF/USA (GDX US)</a> will change benchmark from the NYSE Arca Gold Miners Index to the MarketVector Global Gold Miners Index at the close on 19 September.</li>
<li>We forecast 8 adds and 25 deletes for the ETF. Estimated one-way turnover is 15.77% resulting in a round-trip trade of US$6.18bn.</li>
<li>The forecast adds have outperformed the forecast deletes since the announcement of the benchmark switch and over shorter time frames too. The valuation gap has opened up.</li>
</ul>


The VanEck Gold Miners ETF/USA (GDX US) will change benchmark from the NYSE Arca Gold Miners Index to the MarketVector Global Gold Miners Index at the close on 19 September.
We forecast 8 adds and 25 deletes for the ETF. Estimated one-way turnover is 15.77% resulting in a round-trip trade of US$6.18bn.
The forecast adds have outperformed the forecast deletes since the announcement of the benchmark switch and over shorter time frames too. The valuation gap has opened up.


Gold Miners ETF (GDX US): Big Outperformance Driven by Benchmark Change; Valuation Gap Opens Up

Canada

Centerra Gold Inc, acquires, explores, develops, and operates gold properties primarily in Central Asia, the former Soviet Union, and other emerging markets. The Company currently operates the Kumtor mine in the Kyrgyz Republic and the Boroo mine in Mongolia.

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Centerra Gold (CG CN)

Gold: Gold Stocks Making a Comeback?

we expand on our previous note Gold: Is It the Beginning of New Golden Era or End of the Bull Run? Our analysis of returns on gold and gold-stock...

Venkat Ramana Nandyal

Gold Miners ETF (GDX US) March Rebalance: 4 Adds and US$5.1bn Trade

The index rebalances at the close today. With gold trading lower since rebalance announcement and another big down move overnight (though off the...

Brian Freitas

[Quiddity Index] MV Global Gold Miners Mar26 Rebal Results: Four ADDs; US$2.7bn One-Way

The MV Global Gold Miners Index saw 4 ADDs and sees US$2.7bn one-way of flows or about 7.2% turnover. That is as expected, but 2 of the 4 ADDs were...

Travis Lundy

Gold Miners ETF (GDX US): Further Capping Pushes Trade to Over US$12.5bn

The GDX benchmark change is expected to result in 27.4% turnover and a US$12.5bn trade. Multiple days of ADV need to be traded in a lot of stocks....

Brian Freitas

Gold Miners ETF (GDX US): Big Outperformance Driven by Benchmark Change; Valuation Gap Opens Up

We see 8 adds and 25 deletes for GDX. Estimated one-way turnover is 15.77% and round-trip trade is US$6.18bn. Forecast adds have outperformed...

Brian Freitas

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