Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>In last week's Int'l Compass (Aug. 18) we discussed that global equities are going through a bottoming process, but that the real test will come during the eventual pullback.</li>
<li>We are getting the pullback now, but so far, there has yet to be any failed breakouts among the indexes discussed over the past month -- a positive sign.</li>
<li>Worth noting- <em>further</em> breakout attempts have failed on some of the leading market indexes, notably the Nasdaq 100 and India's SENSEX, but they remain well-above their breakout levels from July.</li>
</ul>


In last week's Int'l Compass (Aug. 18) we discussed that global equities are going through a bottoming process, but that the real test will come during the eventual pullback.
We are getting the pullback now, but so far, there has yet to be any failed breakouts among the indexes discussed over the past month -- a positive sign.
Worth noting- further breakout attempts have failed on some of the leading market indexes, notably the Nasdaq 100 and India's SENSEX, but they remain well-above their breakout levels from July.


Pullback Underway; Buy Ideas: Energy, Materials, Japan/India Motor Vehicles, Japan Health Care

External broker reports(aggregated public sources), ICICI Securities Ltd

ICICI Securities Limited

External broker reports(aggregated public sources)

ICICI Securities Ltd

ICICI Securities Limited provides investment services. The Company provides corporate and investment banking, securities, wealth management, retail brokerage, initial public offerings, and advisory services. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

<ul><li>Grindwell Norton (GNL) is the market leader in the India abrasive market with ~26% market share.</li><li>The segments include abrasives (contributing ~57%), ceramics &amp; plastics (33%) and IT services &amp; others (10%).</li><li>Target Price and Valuation: We value GNL at Rs 2035 i.e. 55x P/E on FY24E EPS</li></ul><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Grindwell Norton (GNL) is the market leader in the India abrasive market with ~26% market share.The segments include abrasives (contributing ~57%), ceramics &amp; plastics (33%) and IT services &amp; others (10%).Target Price and Valuation: We value GNL at Rs 2035 i.e. 55x P/E on FY24E EPSContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

<p>About the stock: Grindwell Norton (GNL) is the market leader in the India abrasive market with ~26% market share. The segments include abrasives (contributing ~57%), ceramics &amp; plastics (33%) and IT services &amp; others (10%).</p><ul><li>GNL has witnessed strong &amp; positive free cash flows consistently over more than a decade irrespective of the macro environment</li><li>It has consistently operated with high (&gt;16%) margins &amp; return ratios</li></ul><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

About the stock: Grindwell Norton (GNL) is the market leader in the India abrasive market with ~26% market share. The segments include abrasives (contributing ~57%), ceramics &amp; plastics (33%) and IT services &amp; others (10%).GNL has witnessed strong &amp; positive free cash flows consistently over more than a decade irrespective of the macro environmentIt has consistently operated with high (&gt;16%) margins &amp; return ratiosContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Grindwell Norton: Decent Performance Across Key Segments

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<p>The Indian mutual fund industry has assets of almost INR 7.93 trillion (US$106.3bn) across Multi cap, Large Cap, Large and Mid Cap, Mid Cap, Small Cap and Flexi Cap equity schemes. Equity schemes classified as large cap need to have at least 80% of their assets invested in large cap stocks, large and mid cap schemes need to have at least 35% of their assets in large cap stocks and at least 35% in mid cap stocks, mid cap funds need to hold at least 65% of their assets in mid cap stocks, and small cap funds need to hold at least 65% of their assets in small cap stocks. Flexi cap funds can invest across market caps.</p><p>The Association of Mutual Funds in India (AMFI) publishes the list of the stocks in each market cap segment in January and July each year and mutual funds have one month to rebalance their portfolios to adhere to the new categorization.</p><p>We are just past halfway through the review period for the second half of 2021. Using data to the close on 4 October, at the next recategorization in January 2022, we see 10 stocks moving from the mid cap segment to the large cap segment, 11 stocks moving from the large cap segment to the mid cap segment , 11 stocks are expected to move from the small cap segment to the mid cap segment, with16 stocks moving from the mid cap to the small cap segment. <a href="https://www.smartkarma.com/entities/zomato-media-pvt" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOMATO IN)</a> will be a part of the large cap universe, while 4 other newly listed stocks will be a part of the mid cap universe.</p><p>Historically, stocks moving to a higher market cap category have outperformed stocks that migrate to a lower market cap category over the back half of the review period. In some cases, the outperformance continues past the announcement of the changes as well. This can be attributed to fund managers realigning their portfolios to meet the new categorization. This provides opportunities to pre-position for the move and unwind post the announcement of the reclassification.</p>

The Indian mutual fund industry has assets of almost INR 7.93 trillion (US$106.3bn) across Multi cap, Large Cap, Large and Mid Cap, Mid Cap, Small Cap and Flexi Cap equity schemes. Equity schemes classified as large cap need to have at least 80% of their assets invested in large cap stocks, large and mid cap schemes need to have at least 35% of their assets in large cap stocks and at least 35% in mid cap stocks, mid cap funds need to hold at least 65% of their assets in mid cap stocks, and small cap funds need to hold at least 65% of their assets in small cap stocks. Flexi cap funds can invest across market caps.The Association of Mutual Funds in India (AMFI) publishes the list of the stocks in each market cap segment in January and July each year and mutual funds have one month to rebalance their portfolios to adhere to the new categorization.We are just past halfway through the review period for the second half of 2021. Using data to the close on 4 October, at the next recategorization in January 2022, we see 10 stocks moving from the mid cap segment to the large cap segment, 11 stocks moving from the large cap segment to the mid cap segment , 11 stocks are expected to move from the small cap segment to the mid cap segment, with16 stocks moving from the mid cap to the small cap segment. Zomato (ZOMATO IN) will be a part of the large cap universe, while 4 other newly listed stocks will be a part of the mid cap universe.Historically, stocks moving to a higher market cap category have outperformed stocks that migrate to a lower market cap category over the back half of the review period. In some cases, the outperformance continues past the announcement of the changes as well. This can be attributed to fund managers realigning their portfolios to meet the new categorization. This provides opportunities to pre-position for the move and unwind post the announcement of the reclassification.

India: Stock Reclassification & Active Portfolio Management (Dec 2021)

Asia-Focused Industry Research, Speeda Research

Speeda

Asia-Focused Industry Research

Speeda Research

Speeda Research analysts cover China, Japan, India and SEA on the latest trends and topics. We have analysts of diverse nationalities who are able to access information in their respective local languages to provide customers with comprehensive reports. With access to private company data in these regions, Speeda Research is also able to provide insights into niche sectors which are not usually covered by other parties. We are also able to undertake ad hoc company and industry research reports.

Thematic (Sector/Industry)

<p>In July 2015, the Indian government set a target of 10 million PNG (piped natural gas) connections to be made within two years. But as of September 2016, the government was 7 million short of its goal with the odds of achieving it in less than a year seeming very low. Increasing PNG and CNG (compressed natural gas) connections are part of the government’s wider plan to more than double the share of natural gas in India’s energy mix to 20% by 2025. To achieve this goal, the government needs to ramp up transmission infrastructure and increase capacity of import infrastructure to cater to the expected surge in natural gas imports, apart from introducing key policies with regards to pricing, taxation and regulation. Based on past evidence and the information provided within this report, we think the government will fall short of its energy mix targets, just like it did in the PNG segment.</p>

In July 2015, the Indian government set a target of 10 million PNG (piped natural gas) connections to be made within two years. But as of September 2016, the government was 7 million short of its goal with the odds of achieving it in less than a year seeming very low. Increasing PNG and CNG (compressed natural gas) connections are part of the government’s wider plan to more than double the share of natural gas in India’s energy mix to 20% by 2025. To achieve this goal, the government needs to ramp up transmission infrastructure and increase capacity of import infrastructure to cater to the expected surge in natural gas imports, apart from introducing key policies with regards to pricing, taxation and regulation. Based on past evidence and the information provided within this report, we think the government will fall short of its energy mix targets, just like it did in the PNG segment.

Falling Natural Gas Production and Poor Import Infra Make PNG a Distant Dream for Most Indians

India

Grindwell Norton Limited manufactures abrasive products, including bonded and coated abrasives. The Company also manufactures silicon carbide and aluminum oxide, as well as industrial ceramics. Grindwell Norton also operates through a joint venture which manufactures a wide range of centralized lubrication systems (CLS).

Grindwell Norton (GWN IN)

Pullback Underway; Buy Ideas: Energy, Materials, Japan/India Motor Vehicles, Japan Health Care

Pullback Underway; Problem: U.S. Dollar $DXY, Global 10-Yr Sovereign Yields, and Commodities All on the Rise Again; Actionable Themes: Energy,...

Vermilion Research

Grindwell Norton: Mixed Performance

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general...

ICICI Securities Limited

Grindwell Norton: Decent Performance Across Key Segments

Grindwell Norton (GNL) is the market leader in the India abrasive market with ~26% market share. The segments include abrasives (contributing...

ICICI Securities Limited

India: Stock Reclassification & Active Portfolio Management (Dec 2021)

Halfway through the review period, we take a look at stocks that could migrate across the large, mid and small cap segments. With over US$100bn of...

Brian Freitas

Falling Natural Gas Production and Poor Import Infra Make PNG a Distant Dream for Most Indians

In July 2015, the Indian government set a target of 10 million PNG (piped natural gas) connections to be made within two years. But as of September...

Speeda Research