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>
<a href="https://www.smartkarma.com/entities/ql-resources-bhd" target="_blank" data-smartkarma-citation="entities:11221:1" rel="noopener">Ql Resources (QLG MK)</a> and <a href="https://www.smartkarma.com/entities/ammb-holdings-bhd" target="_blank" data-smartkarma-citation="entities:137:1" rel="noopener">AMMB Holdings (AMM MK)</a> could replace <a href="https://www.smartkarma.com/entities/hartalega-holdings-bhd" target="_blank" data-smartkarma-citation="entities:10230:1" rel="noopener">Hartalega Holdings (HART MK)</a> and <a href="https://www.smartkarma.com/entities/top-glove-corp-bhd" target="_blank" data-smartkarma-citation="entities:20759:1" rel="noopener">Top Glove Corp (TOPG MK)</a> in the <a href="https://www.smartkarma.com/entities/kuala-lumpur-composite-index" target="_blank" data-smartkarma-citation="entities:22913:1" rel="noopener">Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX)</a>.</li>
<li>If the changes go through, glove makers will have no representation in the index. At one point in 2020, glove makers made up nearly 20% of the <a href="https://www.smartkarma.com/entities/kuala-lumpur-composite-index" target="_blank" data-smartkarma-citation="entities:22913:1" rel="noopener">FBMKLCI INDEX</a>.</li>
<li>One-Way turnover at the rebalance will be around 3% and the impact of passive trading will be higher on the inclusions as compared to the deletions.</li>
</ul>



Ql Resources (QLG MK) and AMMB Holdings (AMM MK) could replace Hartalega Holdings (HART MK) and Top Glove Corp (TOPG MK) in the Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX).
If the changes go through, glove makers will have no representation in the index. At one point in 2020, glove makers made up nearly 20% of the FBMKLCI INDEX.
One-Way turnover at the rebalance will be around 3% and the impact of passive trading will be higher on the inclusions as compared to the deletions.


KLCI Index Rebalance Preview: No More Glovemakers in the Index (Or How the Mighty Have Fallen)

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

Sri Trang Gloves Thailand  / Equity Bottom-Up

<ul>
<li>As continued strong market competition and excess capacities from major players have capped upward trajectory for ASP, key global glove manufacturers have revised their capex plans lower.</li>
<li>To reflect the current industry climate, Sri Trang expects to reach an annual production capacity of 56.6 billion pieces in 2024 from 81.9 billion pieces earlier.</li>
<li>The company aims to launch surgical gloves, which command a high margin, in the domestic market in Q4 2022.</li>
</ul>


As continued strong market competition and excess capacities from major players have capped upward trajectory for ASP, key global glove manufacturers have revised their capex plans lower.
To reflect the current industry climate, Sri Trang expects to reach an annual production capacity of 56.6 billion pieces in 2024 from 81.9 billion pieces earlier.
The company aims to launch surgical gloves, which command a high margin, in the domestic market in Q4 2022.


Sri Trang Gloves (STGT TB): Revised Capacity Expansion Plan to Arrest Downfall in ASP

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sri-trang-gloves-thailand-public-company-limited" target="_blank" data-smartkarma-citation="entities:29141:1" rel="noopener">Sri Trang Gloves (Thailand) Public Company Limited (STGT TB)</a> reported record high sales volume due to strong demand in existing markets and expansion into new markets.</li>
<li>However, lower ASP as a result of additional supply in the market, dragged down revenue and profitability of the company. No recovery in ASP is seen in near-term.</li>
<li>By leveraging on its locational advantage for NR glove, focusing on fast growing developing markets, and launching high-margin surgical glove in Thailand, STGT is well-positioned to outpace its Malaysian peers.</li>
</ul>



Sri Trang Gloves (Thailand) Public Company Limited (STGT TB) reported record high sales volume due to strong demand in existing markets and expansion into new markets.
However, lower ASP as a result of additional supply in the market, dragged down revenue and profitability of the company. No recovery in ASP is seen in near-term.
By leveraging on its locational advantage for NR glove, focusing on fast growing developing markets, and launching high-margin surgical glove in Thailand, STGT is well-positioned to outpace its Malaysian peers.


Sri Trang Gloves (STGT TB): 2022 Started On a Weak Note; Lower ASP Is Industry Wide Phenomena

<ul>
<li>Riding on COVID-driven demand boom, <a href="https://www.smartkarma.com/entities/sri-trang-gloves-thailand-public-company-limited" target="_blank" data-smartkarma-citation="entities:29141:1" rel="noopener">Sri Trang Gloves (Thailand) Public Company Limited (STGT TB)</a> reported record high performance in 2021, which is not likely to continue in near-term.</li>
<li>However, post pandemic, gloves demand is expected to improve on the back of increased glove usage from emerging markets with low gloves consumption per capita and heightened hygiene awareness.</li>
<li>STGT shares have corrected 15% thus far in this year, providing a good buy on dip opportunity. Shares can be considered for the long-haul.</li>
</ul>


Riding on COVID-driven demand boom, Sri Trang Gloves (Thailand) Public Company Limited (STGT TB) reported record high performance in 2021, which is not likely to continue in near-term.
However, post pandemic, gloves demand is expected to improve on the back of increased glove usage from emerging markets with low gloves consumption per capita and heightened hygiene awareness.
STGT shares have corrected 15% thus far in this year, providing a good buy on dip opportunity. Shares can be considered for the long-haul.


Sri Trang Gloves (Thailand) Public Company Limited (STGT TB): Short-Term Pain; Long-Term Gain

External broker reports(aggregated public sources), TA Securities Holdings Berhad

TA Securities Holdings Bhd

External broker reports(aggregated public sources)

Kossan Rubber Industries / Equity Bottom-Up

<p>Solid 9MFY21 Results Last Traded: RM2.44 [...] Kossan reported 9MFY21 net profit of RM2.6bn (+383.8%), which came in at 85.2% and 83.8% of our and consensus full-year estimates, respectively. We deem the results to be within expectations as we expect 4Q21 results to be weaker underpinned by lower ASP. [...] The increase in ASP has boosted the PBT margin to 60.6% as compared to 29.0% in 9MFY20. [...] Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium.</p><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>

Solid 9MFY21 Results Last Traded: RM2.44 [...] Kossan reported 9MFY21 net profit of RM2.6bn (+383.8%), which came in at 85.2% and 83.8% of our and consensus full-year estimates, respectively. We deem the results to be within expectations as we expect 4Q21 results to be weaker underpinned by lower ASP. [...] The increase in ASP has boosted the PBT margin to 60.6% as compared to 29.0% in 9MFY20. [...] Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium.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.

Malaysia

Kossan Rubber Industries Berhad manufactures and sells rubber products. Through its subsidiaries, the Company also manufactures and trades latex examination gloves as well as fabricates and installs machinery.

Kossan Rubber Industries (KRI MK)

KLCI Index Rebalance Preview: No More Glovemakers in the Index (Or How the Mighty Have Fallen)

QL Resources and AMMB could replace Top Glove and Hartalega in the KLCI. That would mean no glove makers in the index, down from a near 20% index...

Brian Freitas

Sri Trang Gloves (STGT TB): Revised Capacity Expansion Plan to Arrest Downfall in ASP

Sri Trang has revised annual production capacity target to 56.6B pieces in 2024 from 81.9B pieces earlier. Glove ASP seems to be bottoming out,...

Tina Banerjee

Sri Trang Gloves (STGT TB): 2022 Started On a Weak Note; Lower ASP Is Industry Wide Phenomena

STGT reported massive revenue and earnings decline in 1Q22, a trend expected to continue in the rest of the year due to lower ASP. However, the...

Tina Banerjee

Sri Trang Gloves (Thailand) Public Company Limited (STGT TB): Short-Term Pain; Long-Term Gain

With strong financials and aggressive capacity expansion plans, STGT can be a long-term bet to gain from the post pandemic global gloves demand boom.

Tina Banerjee

Solid 9MFY21 Results

<p>Solid 9MFY21 Results Last Traded: RM2.44 [...] Kossan reported 9MFY21 net profit of RM2.6bn (+383.8%), which came in at 85.2% and 83.8% of our...

TA Securities Holdings Bhd