Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Quantitative Analysis

<ul>
<li>An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top 100 stocks in the MSCI GEM Index.</li>
<li>The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.</li>
<li>Developed over roughly 4 years and implemented in its current state for over 3 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.</li>
</ul>


An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top 100 stocks in the MSCI GEM Index.
The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.
Developed over roughly 4 years and implemented in its current state for over 3 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.


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>The WisdomTree Emerging Markets High Dividend Index is a fundamentally weighted index that measures the performance of high dividend yield stocks within emerging markets.</li>
<li>The October rebalance will result in a one-way turnover of ~37% and in a one-way trade of US$926m. There are 92 stocks with over 1 day of ADV to trade.</li>
<li>In Asia, the largest buy flows are expected on <a href="https://www.smartkarma.com/entities/astra-international-tbk-pt" target="_blank" data-smartkarma-citation="entities:46:1" rel="noopener">Astra International (ASII IJ)</a> and the largest sell flows on <a href="https://www.smartkarma.com/entities/posco-holdings-inc" target="_blank" data-smartkarma-citation="entities:208:1" rel="noopener">POSCO Holdings (005490 KS)</a>. </li>
</ul>


The WisdomTree Emerging Markets High Dividend Index is a fundamentally weighted index that measures the performance of high dividend yield stocks within emerging markets.
The October rebalance will result in a one-way turnover of ~37% and in a one-way trade of US$926m. There are 92 stocks with over 1 day of ADV to trade.
In Asia, the largest buy flows are expected on Astra International (ASII IJ) and the largest sell flows on POSCO Holdings (005490 KS). 


WisdomTree Emerging Markets High Dividend Index Rebalance: Huge Turnover & Trade Next Week

<ul>
<li>An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top 100 stocks in the MSCI GEM Index.</li>
<li>The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.</li>
<li>Developed over roughly 4 years and implemented in its current state for over 2.5 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.</li>
</ul>


An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top 100 stocks in the MSCI GEM Index.
The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.
Developed over roughly 4 years and implemented in its current state for over 2.5 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.


<ul>
<li>An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top100 stocks in the MSCI GEM Index.</li>
<li>The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.</li>
<li>Developed over roughly 4 years and implemented in its current state for over 2 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.</li>
</ul>


An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top100 stocks in the MSCI GEM Index.
The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.
Developed over roughly 4 years and implemented in its current state for over 2 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.


Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

In mid-December, eight trading days after Vedanta promotor Anil Agarwal said the promoter (Vedanta Resources, himself, the associated companies) had no plans at all to increase their stake in <a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd (VEDL IN)</a> and no plans to make an Open Offer, the promoter launched a block bid to buy 4.98% in a post-market trade. The shares had climbed more than 50% in the previous two months to Rs 150/share, but the deal got done at Rs 160/share.Less than three weeks later, two entities controlled by <a href="https://www.smartkarma.com/entities/vedanta-resources-limited" target="_blank" data-smartkarma-citation="entities:22202:1" rel="noopener">Vedanta Resources (VED LN)</a> announced an intention to conduct an Open Offer to buy another 10% of its main Indian-listed asset, VEDL at the same Rs. 160/share price as the clearing price. But by that time (9 January), the price had risen past Rs. 180/share as global market movements had propelled gains in cyclicals and commodity markets had propelled the underlying products.But even then, VEDL was quite cheap on a relative basis. The question was about the nature of the Open Offer. Was it a real Open Offer?  Or was it designed for another purpose in mind? We still do not know the answer, but on 18 February the stock reached a new 2-year intraday high, closing at Rs. 195+/share. And VEDL is still not expensive vs peers. Q3 results at both HZ and at VEDL ex-HZ were great. VEDL ex-HZ Operating Income was the highest since March 2014, and VEDL ex-HZ Net Income in Q3 was the second highest non-accounting gimmick Net Income ever?Looking forward, consensus on VEDL is stale. It shows the largest negative number for VEDL ex-HZ OP in the modern VEDL era in Q4 this year despite strong commodity pricing.And VEDL still owes a lot of back dividends to its shareholders. And we await the Open Offer details.This and a lot more below.

In mid-December, eight trading days after Vedanta promotor Anil Agarwal said the promoter (Vedanta Resources, himself, the associated companies) had no plans at all to increase their stake in Vedanta Ltd (VEDL IN) and no plans to make an Open Offer, the promoter launched a block bid to buy 4.98% in a post-market trade. The shares had climbed more than 50% in the previous two months to Rs 150/share, but the deal got done at Rs 160/share.Less than three weeks later, two entities controlled by Vedanta Resources (VED LN) announced an intention to conduct an Open Offer to buy another 10% of its main Indian-listed asset, VEDL at the same Rs. 160/share price as the clearing price. But by that time (9 January), the price had risen past Rs. 180/share as global market movements had propelled gains in cyclicals and commodity markets had propelled the underlying products.But even then, VEDL was quite cheap on a relative basis. The question was about the nature of the Open Offer. Was it a real Open Offer?  Or was it designed for another purpose in mind? We still do not know the answer, but on 18 February the stock reached a new 2-year intraday high, closing at Rs. 195+/share. And VEDL is still not expensive vs peers. Q3 results at both HZ and at VEDL ex-HZ were great. VEDL ex-HZ Operating Income was the highest since March 2014, and VEDL ex-HZ Net Income in Q3 was the second highest non-accounting gimmick Net Income ever?Looking forward, consensus on VEDL is stale. It shows the largest negative number for VEDL ex-HZ OP in the modern VEDL era in Q4 this year despite strong commodity pricing.And VEDL still owes a lot of back dividends to its shareholders. And we await the Open Offer details.This and a lot more below.

Vedanta Soars Beyond Indicative Open Offer Level. Not Expensive

Mexico

Grupo Mexico SAB de CV mines, processes, and markets copper, silver, gold, molybdenum, lead, and zinc.  The Company holds concessions to operate the Pacifico-Norte and Chihuahua-Pacifico Railroad lines.  Grupo Mexico, through subsidiaries, operates open-pit copper mines, underground mines, a coal mine, copper smelters, a rod mill facility, and a precious metals refinery.

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Grupo Mexico Sab De Cv (GMEXICOB MM)

Screening for GEMs: February 2024

This insight provides an overview of our, machine learning-driven, proprietary GEM screening model, based on a Multifactor model, a Deep Neural...

Wium Malan, CFA

WisdomTree Emerging Markets High Dividend Index Rebalance: Huge Turnover & Trade Next Week

There are 265 adds/215 deletes for the WisdomTree Emerging Markets High Dividend Index. One-way turnover is 37% resulting in a one-way trade of...

Brian Freitas

Screening for GEMs: January 2023

This insight provides an overview of our, machine learning-driven, proprietary GEM screening model, based on a Multifactor model, a Deep Neural...

Wium Malan, CFA

Screening for GEMs: October 2022

This insight provides an overview of our, machine learning-driven, proprietary GEM screening model, based on a Multifactor model, a Deep Neural...

Wium Malan, CFA

Vedanta Soars Beyond Indicative Open Offer Level. Not Expensive

VEDL is STILL cheap to peers relative, on a stub basis, on a fundamental basis using current or forward EV/consensus EBIT or EBITDA. We await the...

Travis Lundy

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