Leading International Investment Research, Edison Investment Research

Edison Investment Research

Leading International Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

Equity Bottom-Up

<p>EML Payments reported FY22 underlying EBITDA just below guidance and underlying NPATA ahead of guidance. With EML now under strategic review, no quantitative guidance was given for FY23. Management noted several positives (the improving interest rate environment and that regulator-set growth caps in the General Purpose Reloadable (GPR) European business were not currently constraining divisional growth) but also highlighted the Q4 overheads run rate and cost inflation.  </p>

EML Payments reported FY22 underlying EBITDA just below guidance and underlying NPATA ahead of guidance. With EML now under strategic review, no quantitative guidance was given for FY23. Management noted several positives (the improving interest rate environment and that regulator-set growth caps in the General Purpose Reloadable (GPR) European business were not currently constraining divisional growth) but also highlighted the Q4 overheads run rate and cost inflation.  

EML Payments - New CEO launches strategic review

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 trading days to go in the review period for the September rebalance of the S&amp;P/ASX indices. Announcement is on 2 September with implementation on 16 September.</li>
<li>There could be 6 changes to the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a>, increasing to 8 if <a href="https://www.smartkarma.com/entities/avz-minerals-ltd" target="_blank" data-smartkarma-citation="entities:6148:1" rel="noopener">AVZ Minerals (AVZ AU)</a> continues to be halted and if <a href="https://www.smartkarma.com/entities/link-administration-holdings-ltd" target="_blank" data-smartkarma-citation="entities:970:1" rel="noopener">Link Administration (LNK)</a> is privatised.</li>
<li>The potential adds have outperformed the potential deletes over the last month. Short interest has increased on a few potential deletes. There will be pre-positions built up.</li>
</ul>


There are 4 trading days to go in the review period for the September rebalance of the S&amp;P/ASX indices. Announcement is on 2 September with implementation on 16 September.
There could be 6 changes to the S&amp;P/ASX 200 (AS51 INDEX), increasing to 8 if AVZ Minerals (AVZ AU) continues to be halted and if Link Administration (LNK) is privatised.
The potential adds have outperformed the potential deletes over the last month. Short interest has increased on a few potential deletes. There will be pre-positions built up.


S&P/​​​​ASX Index Rebalance Preview: Adds Outperform Deletes As Review Period End Nears

Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

<ul>
<li>With the Reference Period for the September 2022 Rebalance nearing its end, we take a final look at the potential index changes for ASX 300, 200, 100, 50, and 20.</li>
<li>
<a href="https://www.smartkarma.com/entities/avz-minerals-ltd" target="_blank" data-smartkarma-citation="entities:6148:1" rel="noopener">AVZ Minerals (AVZ AU)</a> and <a href="https://www.smartkarma.com/entities/firefinch-ltd" target="_blank" data-smartkarma-citation="entities:16094:1" rel="noopener">Firefinch Ltd (FFX AU)</a> are both members of the ASX Index family and are currently suspended from trading. There could be index consequences here.</li>
<li>Based on current data, I expect 7 ADDs/DELs for the ASX 200 Index and 22 ADDs and 18 DELs for the ASX 300 Index.</li>
</ul>


With the Reference Period for the September 2022 Rebalance nearing its end, we take a final look at the potential index changes for ASX 300, 200, 100, 50, and 20.

AVZ Minerals (AVZ AU) and Firefinch Ltd (FFX AU) are both members of the ASX Index family and are currently suspended from trading. There could be index consequences here.
Based on current data, I expect 7 ADDs/DELs for the ASX 200 Index and 22 ADDs and 18 DELs for the ASX 300 Index.


S&P/​​​​​​​ASX Quiddity Leaderboard Sep 2022: Potential Last Minute Surprises

<p>Recent engagement with the Central Bank of Ireland (CBI) has confirmed that EML Payments’ Irish subsidiary will need to undertake further work to meet the CBI’s risk assessment requirements. This is likely to push the final third-party validation process into 2023. Interest rate rises in Europe should go some way to offset additional compliance costs. We maintain our forecasts pending FY22 results on 22 August.</p>

Recent engagement with the Central Bank of Ireland (CBI) has confirmed that EML Payments’ Irish subsidiary will need to undertake further work to meet the CBI’s risk assessment requirements. This is likely to push the final third-party validation process into 2023. Interest rate rises in Europe should go some way to offset additional compliance costs. We maintain our forecasts pending FY22 results on 22 August.

<ul>
<li>At the September rebalance, we expect changes to the S&amp;P/ASX 100 Index, <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> and S&amp;P/ASX 300 Index. Announcement is on 2 September with implementation on 16 September.</li>
<li>Potential adds/deletes with large flow and impact include <a href="https://www.smartkarma.com/entities/shopping-centres-australasia" target="_blank" data-smartkarma-citation="entities:20100:1" rel="noopener">Shopping Cntrs Austrls (SCP AU)</a>, <a href="https://www.smartkarma.com/entities/sayona-mining-ltd" target="_blank" data-smartkarma-citation="entities:1589:1" rel="noopener">Sayona Mining (SYA AU)</a>, <a href="https://www.smartkarma.com/entities/charter-hall-social-infrastructure-reit" target="_blank" data-smartkarma-citation="entities:8288:1" rel="noopener">Charter Hall Social Infrastructure REIT (CQE AU)</a> and <a href="https://www.smartkarma.com/entities/capricorn-metals-ltd" target="_blank" data-smartkarma-citation="entities:10775:1" rel="noopener">Capricorn Metals (CMM AU)</a>.</li>
<li>Shorts have increased significantly on a few stocks over the last few weeks, indicating that there could be some pre-positioning on these stocks.</li>
</ul>


At the September rebalance, we expect changes to the S&amp;P/ASX 100 Index, S&amp;P/ASX 200 (AS51 INDEX) and S&amp;P/ASX 300 Index. Announcement is on 2 September with implementation on 16 September.
Potential adds/deletes with large flow and impact include Shopping Cntrs Austrls (SCP AU), Sayona Mining (SYA AU), Charter Hall Social Infrastructure REIT (CQE AU) and Capricorn Metals (CMM AU).
Shorts have increased significantly on a few stocks over the last few weeks, indicating that there could be some pre-positioning on these stocks.


S&P/​​​ASX Index Rebalance Preview: Busy Rebalance With Lots of Changes Expected

Australia

EML Payments Limited is a financial services company that specializes in pre-paid financial cards.

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EML Payments Limited (EML AU)

EML Payments - New CEO launches strategic review

EML Payments reported FY22 underlying EBITDA just below guidance and underlying NPATA ahead of guidance. With EML now under strategic review, no...

Edison Investment Research

S&P/ASX Index Rebalance Preview: Adds Outperform Deletes As Review Period End Nears

There are a LOT of potential changes to the S&P/ASX indices as we near the end of the review period. The potential adds have outperformed the...

Brian Freitas

S&P/ASX Quiddity Leaderboard Sep 2022: Potential Last Minute Surprises

The ASX 200 ADDs have underperformed the ASX 200 DELs in the last 3 months. Over the next couple of weeks, the ADDs could outperform the DELs

Janaghan Jeyakumar, CFA

EML Payments - More work to do in Europe

Recent engagement with the Central Bank of Ireland (CBI) has confirmed that EML Payments’ Irish subsidiary will need to undertake further work to...

Edison Investment Research

S&P/ASX Index Rebalance Preview: Busy Rebalance With Lots of Changes Expected

There are no changes expected for the ASX20 & ASX50, maybe a couple for the ASX100, more for the ASX200 and many more for the ASX300 index at the...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

EML Payments - New CEO launches strategic review

EML Payments reported FY22 underlying EBITDA just below guidance and underlying NPATA ahead of guidance. With EML now under strategic review, no...

Edison Investment Research

S&P/​​​​ASX Index Rebalance Preview: Adds Outperform Deletes As Review Period End Nears

There are a LOT of potential changes to the S&P/ASX indices as we near the end of the review period. The potential adds have outperformed the...

Brian Freitas

S&P/​​​​​​​ASX Quiddity Leaderboard Sep 2022: Potential Last Minute Surprises

The ASX 200 ADDs have underperformed the ASX 200 DELs in the last 3 months. Over the next couple of weeks, the ADDs could outperform the DELs

Janaghan Jeyakumar, CFA

EML Payments - More work to do in Europe

Recent engagement with the Central Bank of Ireland (CBI) has confirmed that EML Payments’ Irish subsidiary will need to undertake further work to...

Edison Investment Research

S&P/​​​ASX Index Rebalance Preview: Busy Rebalance With Lots of Changes Expected

There are no changes expected for the ASX20 & ASX50, maybe a couple for the ASX100, more for the ASX200 and many more for the ASX300 index at the...

Brian Freitas

S&P/ASX Index Rebalance Preview: Adds Outperform Deletes As Review Period End Nears

S&P/ASX Quiddity Leaderboard Sep 2022: Potential Last Minute Surprises

S&P/ASX Index Rebalance Preview: Busy Rebalance With Lots of Changes Expected