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>Following their inclusion in the F&amp;O segment in November, <a href="https://www.smartkarma.com/entities/zomato-ltd" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOMATO IN)</a> and <a href="https://www.smartkarma.com/entities/jio-financial-services-limited" target="_blank" data-smartkarma-citation="entities:40042:1" rel="noopener">Jio Financial Services (JIOFIN IN)</a> appear to be sure-shot inclusions to the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index</a> in March.</li>
<li>
<a href="https://www.smartkarma.com/entities/bharat-petroleum-corp-ltd" target="_blank" data-smartkarma-citation="entities:10222:1" rel="noopener">Bharat Petroleum Corp (BPCL IN)</a> is a certain deletion from the index. <a href="https://www.smartkarma.com/entities/britannia-industries-ltd" target="_blank" data-smartkarma-citation="entities:16495:1" rel="noopener">Britannia Industries</a>' average free-float market cap is less than 0.004% below <a href="https://www.smartkarma.com/entities/hero-motocorp-ltd" target="_blank" data-smartkarma-citation="entities:2391:1" rel="noopener">Hero Motocorp</a>'s. It's very close.</li>
<li>Passive trackers need to trade between 3.7-11.8 days of ADV on the stocks. The impact increases significantly to between 8.4-21.8 days of delivery volume to trade on the stocks.</li>
</ul>


Following their inclusion in the F&amp;O segment in November, Zomato (ZOMATO IN) and Jio Financial Services (JIOFIN IN) appear to be sure-shot inclusions to the NIFTY Index in March.

Bharat Petroleum Corp (BPCL IN) is a certain deletion from the index. Britannia Industries' average free-float market cap is less than 0.004% below Hero Motocorp's. It's very close.
Passive trackers need to trade between 3.7-11.8 days of ADV on the stocks. The impact increases significantly to between 8.4-21.8 days of delivery volume to trade on the stocks.


NIFTY50 Index Rebalance Preview: Adds Secure; Tight Among the Deletes

Event-Driven

<ul>
<li>In November 2020, HT Global IT Solutions acquired all the shares it did not own in <a href="https://www.smartkarma.com/entities/hexaware-technologies-ltd" target="_blank" data-smartkarma-citation="entities:7882:1" rel="noopener">Hexaware Technologies (HEXW IN)</a> and delisted the stock from the <a href="https://www.smartkarma.com/entities/national-stock-exchange" target="_blank" data-smartkarma-citation="entities:23751:1" rel="noopener">NSE</a> and <a href="https://www.smartkarma.com/entities/bombay-stock-exchange" target="_blank" data-smartkarma-citation="entities:23694:1" rel="noopener">BSE</a>.</li>
<li>Now, <a href="https://www.smartkarma.com/entities/carlyle-group-inc-the" target="_blank" data-smartkarma-citation="entities:33402:1" rel="noopener">Carlyle Group</a> is looking to raise INR 87.5bn by selling stock at a price range of INR 674-708/share, valuing <a href="https://www.smartkarma.com/entities/hexaware-technologies-ltd" target="_blank" data-smartkarma-citation="entities:7882:1" rel="noopener">Hexaware Technologies (HEXW IN)</a> at US$4.8bn.</li>
<li>The stock will not get Fast Entry to global indices. Inclusion at regular rebalances should take place in May and September, though the impact will be limited.</li>
</ul>


In November 2020, HT Global IT Solutions acquired all the shares it did not own in Hexaware Technologies (HEXW IN) and delisted the stock from the NSE and BSE.
Now, Carlyle Group is looking to raise INR 87.5bn by selling stock at a price range of INR 674-708/share, valuing Hexaware Technologies (HEXW IN) at US$4.8bn.
The stock will not get Fast Entry to global indices. Inclusion at regular rebalances should take place in May and September, though the impact will be limited.


Hexaware Technologies IPO: Delisted in 2020; Now Looking to Raise US$1bn

<ul>
<li>With 10 trading days left in the review period, there could be 7 changes (including 2 migrations) for the <a href="https://www.smartkarma.com/entities/nse-nifty-next-50-index" target="_blank" data-smartkarma-citation="entities:36053:1" rel="noopener">NSE Nifty Next 50 Index (NIFTYJR INDEX)</a> in March.</li>
<li>Estimated one-way turnover is 15.9% resulting in a one-way trade of INR 52bn (US$600m). All forecast changes, bar one, have over 1.5x ADV to trade from passive trackers.</li>
<li>All the forecast deletes are F&amp;O members while two adds are not. NSE Indices could revisit the index membership criteria especially given the launch of futures on the index.</li>
</ul>


With 10 trading days left in the review period, there could be 7 changes (including 2 migrations) for the NSE Nifty Next 50 Index (NIFTYJR INDEX) in March.
Estimated one-way turnover is 15.9% resulting in a one-way trade of INR 52bn (US$600m). All forecast changes, bar one, have over 1.5x ADV to trade from passive trackers.
All the forecast deletes are F&amp;O members while two adds are not. NSE Indices could revisit the index membership criteria especially given the launch of futures on the index.


NIFTY NEXT50 Index Rebalance Preview: 7 Potential Changes in March

<ul>
<li>The lock-up on the second half of the anchor investor allocation for <a href="https://www.smartkarma.com/entities/hyundai-motor-india-ltd" target="_blank" data-smartkarma-citation="entities:40900:1" rel="noopener">Hyundai Motor India (HYUNDAI IN)</a> ends after market close today and the shares will be available for sale tomorrow.</li>
<li>The lock-up expiry further increases free float for the stock and there will be multiple index inclusions over the next few months.</li>
<li>The largest index inclusion will be in February, followed by smaller inclusions in March and June. In total, passives will mop up around 16% of the float.</li>
</ul>


The lock-up on the second half of the anchor investor allocation for Hyundai Motor India (HYUNDAI IN) ends after market close today and the shares will be available for sale tomorrow.
The lock-up expiry further increases free float for the stock and there will be multiple index inclusions over the next few months.
The largest index inclusion will be in February, followed by smaller inclusions in March and June. In total, passives will mop up around 16% of the float.


Hyundai Motor (HYUNDAI IN): Anchor Lock-Up Expiry Increases Float; Index Inclusions Near

Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Macroeconomics

<ul>
<li>The real policy rate is +1.28% (using CPI; +4.13% using WPI). High real rates are a hindrance to the real economy, especially with core inflation below 4%YoY for 13 months.</li>
<li>F&amp;B inflation moderated to 7.69%YoY in Dec'24 (from 9.69%YoY in Oct'24), as vegetable inflation eased to 26.6%YoY (from 42.2%YoY). All other key food and non-food inflation categories abated. </li>
<li>Bountiful winter and spring crops should dampen inflation further, allowing the first rate cut in 2 years (Feb'25), and 25bp rate cuts at each of the next 2 MPC meetings. </li>
</ul>


The real policy rate is +1.28% (using CPI; +4.13% using WPI). High real rates are a hindrance to the real economy, especially with core inflation below 4%YoY for 13 months.
F&amp;B inflation moderated to 7.69%YoY in Dec'24 (from 9.69%YoY in Oct'24), as vegetable inflation eased to 26.6%YoY (from 42.2%YoY). All other key food and non-food inflation categories abated. 
Bountiful winter and spring crops should dampen inflation further, allowing the first rate cut in 2 years (Feb'25), and 25bp rate cuts at each of the next 2 MPC meetings. 


India: Still on Track for Rate Cuts to Begin in Feb'25; Continue at Next 2 MPC Meetings

India

The Nifty Junior Index is a free-float capitalization weighted index of the most liquid stocks excluded from the Nifty Index.

NSE Nifty Next 50 Index (NIFTYJR INDEX EQUITY)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

NSE Nifty Next 50 Index (NIFTYJR INDEX EQUITY)

NIFTY50 Index Rebalance Preview: Adds Secure; Tight Among the Deletes

Zomato and JioFin should replace BPCL and Britannia in March. Hero Motors just avoids deletion for now. Passives need to trade 3.7-11.8x ADV (8.4...

Brian Freitas

Hexaware Technologies IPO: Delisted in 2020; Now Looking to Raise US$1bn

Hexaware delisted in 2020. Now, Carlyle is looking to sell stock worth INR 87.5bn and relist Hexaware. The mid-point of the INR 674-708/share range...

Brian Freitas

NIFTY NEXT50 Index Rebalance Preview: 7 Potential Changes in March

There could be 7 changes in March. Estimated one-way turnover is 15.9% resulting in a one-way trade of INR 52bn (US$600m). Index methodology could...

Brian Freitas

Hyundai Motor (HYUNDAI IN): Anchor Lock-Up Expiry Increases Float; Index Inclusions Near

Hyundai Motor India has a lock-up expiry tomorrow - that is unlikely to lead to big selling but will increase free float. There will be multiple...

Brian Freitas

India: Still on Track for Rate Cuts to Begin in Feb'25; Continue at Next 2 MPC Meetings

High real policy rates are hindering the economy. But with core inflation low and the bountiful winter harvest, food inflation should ease...

Prasenjit K. Basu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

NIFTY50 Index Rebalance Preview: Adds Secure; Tight Among the Deletes

Zomato and JioFin should replace BPCL and Britannia in March. Hero Motors just avoids deletion for now. Passives need to trade 3.7-11.8x ADV (8.4...

Brian Freitas

Hexaware Technologies IPO: Delisted in 2020; Now Looking to Raise US$1bn

Hexaware delisted in 2020. Now, Carlyle is looking to sell stock worth INR 87.5bn and relist Hexaware. The mid-point of the INR 674-708/share range...

Brian Freitas

NIFTY NEXT50 Index Rebalance Preview: 7 Potential Changes in March

There could be 7 changes in March. Estimated one-way turnover is 15.9% resulting in a one-way trade of INR 52bn (US$600m). Index methodology could...

Brian Freitas

Hyundai Motor (HYUNDAI IN): Anchor Lock-Up Expiry Increases Float; Index Inclusions Near

Hyundai Motor India has a lock-up expiry tomorrow - that is unlikely to lead to big selling but will increase free float. There will be multiple...

Brian Freitas

India: Still on Track for Rate Cuts to Begin in Feb'25; Continue at Next 2 MPC Meetings

​High real policy rates are hindering the economy. But with core inflation low and the bountiful winter harvest, food inflation should ease...

Prasenjit K. Basu

High real policy rates are hindering the economy. But with core inflation low and the bountiful winter harvest, food inflation should ease...