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

Event-Driven

<ul>
<li>Nearing the end of the review period, we see 5 stocks moving from MidCap to LargeCap, 2 new listings added to LargeCap and 7 stocks moving from LargeCap to MidCap.</li>
<li>We see 7 stocks moving from SmallCap to MidCap, 3 new listings added to MidCap, and 12 stocks moving from MidCap to SmallCap.</li>
<li>Stock migrating upward have, on average, outperformed stocks that are downward migrations. Stocks moving from MidCap to LargeCap have performed the best.</li>
</ul>


Nearing the end of the review period, we see 5 stocks moving from MidCap to LargeCap, 2 new listings added to LargeCap and 7 stocks moving from LargeCap to MidCap.
We see 7 stocks moving from SmallCap to MidCap, 3 new listings added to MidCap, and 12 stocks moving from MidCap to SmallCap.
Stock migrating upward have, on average, outperformed stocks that are downward migrations. Stocks moving from MidCap to LargeCap have performed the best.


India: AMFI Stock Reclassification Preview

<ul>
<li>Two-Thirds of the way through the review period, we see 7 stocks migrating from MidCap to LargeCap, 8 stocks from LargeCap to MidCap, and 1 new listing added to LargeCap.</li>
<li>Post listing, <a href="https://www.smartkarma.com/entities/life-insurance-corp-of-india-lic" target="_blank" data-smartkarma-citation="entities:28829:1" rel="noopener">Life Insurance Corp of India (LIC) (1248Z IN)</a> should be added to the LargeCap segment while <a href="https://www.smartkarma.com/entities/delhivery-pvt-ltd" target="_blank" data-smartkarma-citation="entities:33471:1" rel="noopener">Delhivery (1058656D IN)</a> should be added to the MidCap segment.</li>
<li>On average, stocks expected to migrate from Mid Cap to Large Cap have outperformed. Stocks expected to migrate from the Large Cap to Mid Cap segment have performed the worst.</li>
</ul>


Two-Thirds of the way through the review period, we see 7 stocks migrating from MidCap to LargeCap, 8 stocks from LargeCap to MidCap, and 1 new listing added to LargeCap.
Post listing, Life Insurance Corp of India (LIC) (1248Z IN) should be added to the LargeCap segment while Delhivery (1058656D IN) should be added to the MidCap segment.
On average, stocks expected to migrate from Mid Cap to Large Cap have outperformed. Stocks expected to migrate from the Large Cap to Mid Cap segment have performed the worst.


India: Preview of Stock Reclassification for Active Funds

India Financials

Saumya Agarwal

Thematic (Sector/Industry)

Indian Banks have built up huge ammunition of Covid related and contingent provisions even as the ‘Real’ NPA picture remains somewhat obscure due to multiple factors playing out such as Moratorium, the Supreme Court interim order and the Restructuring framework. How well placed are Indian Banks to ride the current stress cycle?

Indian Banks have built up huge ammunition of Covid related and contingent provisions even as the ‘Real’ NPA picture remains somewhat obscure due to multiple factors playing out such as Moratorium, the Supreme Court interim order and the Restructuring framework. How well placed are Indian Banks to ride the current stress cycle?

Indian Banks: How Well-Placed Are Indian Banks to Ride the Current Stress Cycle?

Equity Bottom-Up

Last month, IDBI Bank announced the draft scheme for setting off its accumulated losses against the Share Premium account balance. As per IDBI Bank, this accounting re-arrangement will help represent its true financial position and also benefit shareholders in the long run. Though not commonly used, this kind of accounting exercise is not 'first-of-its-kind' for an Indian Bank. Can this accounting move really be a game changer for IDBI Bank?

Last month, IDBI Bank announced the draft scheme for setting off its accumulated losses against the Share Premium account balance. As per IDBI Bank, this accounting re-arrangement will help represent its true financial position and also benefit shareholders in the long run. Though not commonly used, this kind of accounting exercise is not 'first-of-its-kind' for an Indian Bank. Can this accounting move really be a game changer for IDBI Bank?

IDBI Bank: Can ‘setting-Off’ the Accumulated Losses Be a Game Changer for IDBI Bank?

Specialist in Indian Banking and Economic Research

Hemindra Hazari

Macroeconomics

The stock market has responded euphorically to India’s central government budget for the fiscal year 2021-22 (April-March). The question is: does this indicate that investors anticipate a revival of investment, employment, and GDP growth? Paradoxically, it may not. While investment in the macroeconomic sense may not increase, and GDP may take some time to come back to its pre-Covid levels, it appears that the market is unconcerned. The reason is that it anticipates a rise in corporate profits as a result of the measures in the budget, and it is excited about the government’s tough stance regarding reforms.During a severe economic slowdown, such as what India is currently facing, large scale privatisation of the public sector is unlikely to stimulate growth. The private sector typically is focused on short-term profits, and in an environment where aggregate demand is constricted and capacity utilisation is low, the private sector cannot be expected to undertake capital expenditure. It is only the government and government-owned companies which can play a counter-cyclical role in the economy in a downturn. The privatisation of the public sector would likely result in cost cutting to generate higher profits, instead of stimulating the economy. The Indian prime minister’s statement in parliament that “improper words against the private sector…[and] the culture of abusing the private sector” may not be tolerated indicates that the government now aims to bring about a major change in the political culture of India. Indeed, just as various dissidents, protesters and even comedians have been charged with serious offences against the state, it is possible that those alleging private corporate firms with corruption may face similar charges. This is intended to carry through unpopular reform measures with a minimum of opposition.Given the vulnerable state of some government banks, the proposed privatisation of two government banks may not yield much revenue. In such a scenario the purpose of privatisation may be to send a signal to international investors and the capital market of the government’s tough reform credentials, rather to raise substantial budgetary resources. The central role now given to the private sector as “wealth creators” at the vanguard of the economy may not result in the stated outcome of higher investments, employment and growth. But it may boost corporate profits, especially at the top of the corporate sector, even if the rest of the economy may actually decline. It is this boost to corporate profits that appears to have enthused the share market.

The stock market has responded euphorically to India’s central government budget for the fiscal year 2021-22 (April-March). The question is: does this indicate that investors anticipate a revival of investment, employment, and GDP growth? Paradoxically, it may not. While investment in the macroeconomic sense may not increase, and GDP may take some time to come back to its pre-Covid levels, it appears that the market is unconcerned. The reason is that it anticipates a rise in corporate profits as a result of the measures in the budget, and it is excited about the government’s tough stance regarding reforms.During a severe economic slowdown, such as what India is currently facing, large scale privatisation of the public sector is unlikely to stimulate growth. The private sector typically is focused on short-term profits, and in an environment where aggregate demand is constricted and capacity utilisation is low, the private sector cannot be expected to undertake capital expenditure. It is only the government and government-owned companies which can play a counter-cyclical role in the economy in a downturn. The privatisation of the public sector would likely result in cost cutting to generate higher profits, instead of stimulating the economy. The Indian prime minister’s statement in parliament that “improper words against the private sector…[and] the culture of abusing the private sector” may not be tolerated indicates that the government now aims to bring about a major change in the political culture of India. Indeed, just as various dissidents, protesters and even comedians have been charged with serious offences against the state, it is possible that those alleging private corporate firms with corruption may face similar charges. This is intended to carry through unpopular reform measures with a minimum of opposition.Given the vulnerable state of some government banks, the proposed privatisation of two government banks may not yield much revenue. In such a scenario the purpose of privatisation may be to send a signal to international investors and the capital market of the government’s tough reform credentials, rather to raise substantial budgetary resources. The central role now given to the private sector as “wealth creators” at the vanguard of the economy may not result in the stated outcome of higher investments, employment and growth. But it may boost corporate profits, especially at the top of the corporate sector, even if the rest of the economy may actually decline. It is this boost to corporate profits that appears to have enthused the share market.

Boost to “Wealth Creators” May Not Boost Investment, Employment and GDP

India

IDBI Bank Limited provides a range of banking and financial services. The Bank's services include fund-based operations, such as venture capital and fee-based activities, which include merchant banking and debenture trusteeship.

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IDBI Bank Ltd (IDBI IN)

India: AMFI Stock Reclassification Preview

With 9 trading days to go in the review period, we see 5 stocks moving from Mid to Large and 7 stocks moving the other way. 2 new listings will be...

Brian Freitas

India: Preview of Stock Reclassification for Active Funds

Two-thirds of the way through the review period, we see quite a few changes to the Large/Mid/Small Cap classification for Indian stocks. The upward...

Brian Freitas

Indian Banks: How Well-Placed Are Indian Banks to Ride the Current Stress Cycle?

Indian Banks have built up huge ammunition of Covid related and contingent provisions even as the ‘Real’ NPA picture remains somewhat obscure . Can...

Saumya Agarwal

IDBI Bank: Can ‘setting-Off’ the Accumulated Losses Be a Game Changer for IDBI Bank?

IDBI Bank announced the draft scheme for setting off its accumulated losses against the Share Premium account balance. Can such an accounting...

Saumya Agarwal

Boost to “Wealth Creators” May Not Boost Investment, Employment and GDP

Post budget euphoria in market on account of anticipation of rise in select large corporate profits rather than revival in investments, employment...

Hemindra Hazari

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)