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 coming week has a lot of review periods ending - <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI 200</a>, <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150</a>, <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI 300</a>, <a href="https://www.smartkarma.com/entities/csi-smallcap-500-index-shang" target="_blank" data-smartkarma-citation="entities:35347:1" rel="noopener">CSI 500</a>, <a href="https://www.smartkarma.com/entities/shanghai-stock-exchange-sse-50-a-share-index" target="_blank" data-smartkarma-citation="entities:31073:1" rel="noopener">SSE50</a>, <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">STAR50</a>, <a href="https://www.smartkarma.com/entities/chinext-index" target="_blank" data-smartkarma-citation="entities:25483:1" rel="noopener">ChiNext</a> and <a href="https://www.smartkarma.com/entities/s-p-bse-sensex-index" target="_blank" data-smartkarma-citation="entities:31494:1" rel="noopener">SENSEX</a>, among others.</li>
<li>The <a href="https://www.smartkarma.com/entities/tokyo-stock-exchange-tokyo-price-index-topix" target="_blank" data-smartkarma-citation="entities:22910:1" rel="noopener">TOPIX</a> rebalance will be implemented on Monday while the <a href="https://www.smartkarma.com/entities/global-x-lithium-battery-tech-etf" target="_blank" data-smartkarma-citation="entities:32745:1" rel="noopener">Global X Lithium &amp; Battery Tech ETF (LIT US)</a> and IDX indices will rebalance at the close on Tuesday.</li>
<li>There were outflows from Emerging Market ETFs including <a href="https://www.smartkarma.com/entities/ishares-msci-emerging-markets" target="_blank" data-smartkarma-citation="entities:438:1" rel="noopener">iShares Emerging Markets (EEM)</a>, <a href="https://www.smartkarma.com/entities/ishares-core-msci-emerging-mar" target="_blank" data-smartkarma-citation="entities:32967:1" rel="noopener">iShares Core Emerging Mar (IEMG),</a> <a href="https://www.smartkarma.com/entities/schwab-emerging-markets-equi" target="_blank" data-smartkarma-citation="entities:32879:1" rel="noopener">Schwab Emerging Markets Equi (SCHE)</a> and <a href="https://www.smartkarma.com/entities/ishares-edge-msci-min-vol-emerging-markets-etf" target="_blank" data-smartkarma-citation="entities:725:1" rel="noopener">IShares Edge Min Vol Emerging Markets ETF (EEMV)</a>.</li>
</ul>


The coming week has a lot of review periods ending - KOSPI 200, KOSDAQ 150, CSI 300, CSI 500, SSE50, STAR50, ChiNext and SENSEX, among others.
The TOPIX rebalance will be implemented on Monday while the Global X Lithium &amp; Battery Tech ETF (LIT US) and IDX indices will rebalance at the close on Tuesday.
There were outflows from Emerging Market ETFs including iShares Emerging Markets (EEM), iShares Core Emerging Mar (IEMG), Schwab Emerging Markets Equi (SCHE) and IShares Edge Min Vol Emerging Markets ETF (EEMV).


Index Rebalance & ETF Flow Recap: KS200, KQ150, Yuanta Div+, LIT, HSCI, IDX, Japan Positioning

Alamtri Resources Indonesia / Index Rebalance

<ul>
<li>Float and capping changes will require passive trackers to sell <a href="https://www.smartkarma.com/entities/bank-central-asia-tbk-pt" target="_blank" data-smartkarma-citation="entities:440:1" rel="noopener">Bank Central Asia (BBCA)</a> and <a href="https://www.smartkarma.com/entities/adaro-energy-tbk-pt" target="_blank" data-smartkarma-citation="entities:6061:1" rel="noopener">Adaro Energy (ADRO)</a> while buying <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia (BBRI)</a> and <a href="https://www.smartkarma.com/entities/goto-gojek-tokopedia-tbk-pt" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">GoTo Gojek Tokopedia (GOTO)</a>. </li>
<li>There will be passive trading to other stocks too, though the impact and flow is not material on most of the stocks.</li>
<li>Passive trackers will trade at the close on 31 October, so there are only 3 days to implementation of the changes.</li>
</ul>


Float and capping changes will require passive trackers to sell Bank Central Asia (BBCA) and Adaro Energy (ADRO) while buying Bank Rakyat Indonesia (BBRI) and GoTo Gojek Tokopedia (GOTO). 
There will be passive trading to other stocks too, though the impact and flow is not material on most of the stocks.
Passive trackers will trade at the close on 31 October, so there are only 3 days to implementation of the changes.


IDX30/​​LQ45/IDX80 Index Rebalance: Float & Capping Changes on Tuesday

ESSA Industries Indonesia / Index Rebalance

<ul>
<li>There are 3 changes for the IDX30 Index, 6 changes for the LQ45 Index, and 7 changes for the IDX80 Index at the rebalance to be implemented on 31 January.</li>
<li>Largest passive inflows are expected to be on <a href="https://www.smartkarma.com/entities/sumber-alfaria-trijaya-tbk-pt" target="_blank" data-smartkarma-citation="entities:15659:1" rel="noopener">Sumber Alfaria Trijaya Tbk Pt (AMRT IJ)</a> and <a href="https://www.smartkarma.com/entities/surya-esa-perkasa-tbk-pt" target="_blank" data-smartkarma-citation="entities:14326:1" rel="noopener">Surya Esa Perkasa (ESSA IJ)</a>. </li>
<li>With only 4 days to implementation, there will be relatively big moves on stocks that have large flow/impact from passive fund trading.</li>
</ul>


There are 3 changes for the IDX30 Index, 6 changes for the LQ45 Index, and 7 changes for the IDX80 Index at the rebalance to be implemented on 31 January.
Largest passive inflows are expected to be on Sumber Alfaria Trijaya Tbk Pt (AMRT IJ) and Surya Esa Perkasa (ESSA IJ). 
With only 4 days to implementation, there will be relatively big moves on stocks that have large flow/impact from passive fund trading.


IDX30/​​LQ45/IDX80 Index Rebalance: 4 Days to Implementation

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Quantamental Investing to beat Benchmarks

A. Stotz Investment Research

We pick stocks. We construct portfolios. All our effort is focused on how to better pick stocks and construct portfolios. We serve fund management companies, family offices, and high net worth individuals.

Equity Bottom-Up

Indah Kiat Pulp & Paper / Equity Bottom-Up

<ul>
<li>Good price momentum, low correlation with Western stock markets, and good growth in core profit relative to its sector</li>
<li>Indonesia’s largest pulp and paper-related products manufacturer by sales should continue to benefit from continued high pulp price due to tight global supply following a suspension of capacity by the Chinese</li>
<li>Asian demand should remain solid at a CAGR of 5% until 2018, while announced capacity expansions from global paper players aren’t expected until 2020, 88% of INKP’s sales were in Asia in 2017</li>
<li>INKP has shown strong improvement in gross profit margin and current PE is still undemanding relative to global peers</li>
<li>Risk: China ramps up supply, lower demand from downstream players</li>
</ul>


Good price momentum, low correlation with Western stock markets, and good growth in core profit relative to its sector
Indonesia’s largest pulp and paper-related products manufacturer by sales should continue to benefit from continued high pulp price due to tight global supply following a suspension of capacity by the Chinese
Asian demand should remain solid at a CAGR of 5% until 2018, while announced capacity expansions from global paper players aren’t expected until 2020, 88% of INKP’s sales were in Asia in 2017
INKP has shown strong improvement in gross profit margin and current PE is still undemanding relative to global peers
Risk: China ramps up supply, lower demand from downstream players


INKP (INKP IJ): Valuation Still Undemanding Relative to Global Peers

<ul><li>Strong stock price momentum, sales on an upcycle trend, and cheap on a core profit basis relative to its sector</li><li>Indonesia’s largest pulp and paper-related products manufacturer by sales should continue to benefit from continued high pulp price due to tight global supply following suspension of capacity by the Chinese</li><li>Asian demand should remain solid at a CAGR of 5% until 2018, 88% of INKP’s sales were in Asia in 2017</li><li>INKP has shown strong improvement in gross profit margin and current PE is still undemanding</li><li>Risk: China moves to ramp up supply again, reduced demand from downstream players due to the currently high pulp price</li></ul>

Strong stock price momentum, sales on an upcycle trend, and cheap on a core profit basis relative to its sectorIndonesia’s largest pulp and paper-related products manufacturer by sales should continue to benefit from continued high pulp price due to tight global supply following suspension of capacity by the ChineseAsian demand should remain solid at a CAGR of 5% until 2018, 88% of INKP’s sales were in Asia in 2017INKP has shown strong improvement in gross profit margin and current PE is still undemandingRisk: China moves to ramp up supply again, reduced demand from downstream players due to the currently high pulp price

INKP: Tight Supply and Good Demand Should Remain

Indonesia

PT Indah Kiat Pulp & Paper Tbk is an integrated Indonesian producer of pulp, cultural paper, industrial paper, tissue, and packaging products. The company manufactures various paper products, including writing, printing, photocopy, and colored papers, as well as industrial papers like linerboard, corrugating medium, boxboard, and food packaging. It operates production facilities in Perawang, Serang, and Tangerang, Indonesia. The company was founded on June 21, 1976, and its headquarters are in Jakarta, Indonesia.

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Indah Kiat Pulp & Paper (INKP IJ)

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Brian Freitas

IDX30/LQ45/IDX80 Index Rebalance: Float & Capping Changes on Tuesday

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IDX30/LQ45/IDX80 Index Rebalance: 4 Days to Implementation

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Brian Freitas

INKP (INKP IJ): Valuation Still Undemanding Relative to Global Peers

Good price momentum, low correlation with Western stock markets, and good growth in core profit relative to its sector Indonesia’s largest pulp...

A. Stotz Investment Research

INKP: Tight Supply and Good Demand Should Remain

Strong stock price momentum, sales on an upcycle trend, and cheap on a core profit basis relative to its sector Indonesia’s largest pulp and...

A. Stotz Investment Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Index Rebalance & ETF Flow Recap: KS200, KQ150, Yuanta Div+, LIT, HSCI, IDX, Japan Positioning

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

IDX30/​​LQ45/IDX80 Index Rebalance: Float & Capping Changes on Tuesday

Float and capping changes will be implemented at the close on 31 October and will require passive trackers to sell BBCA, ADRO and BMRI while buying...

Brian Freitas

IDX30/​​LQ45/IDX80 Index Rebalance: 4 Days to Implementation

There are 3, 6 and 7 changes for the IDX30, LQ45 and IDX80 indices. There are only 4 days to implementation and multiple days ADV to trade on a lot...

Brian Freitas

INKP (INKP IJ): Valuation Still Undemanding Relative to Global Peers

Good price momentum, low correlation with Western stock markets, and good growth in core profit relative to its sector Indonesia’s largest pulp...

A. Stotz Investment Research

INKP: Tight Supply and Good Demand Should Remain

Strong stock price momentum, sales on an upcycle trend, and cheap on a core profit basis relative to its sector Indonesia’s largest pulp and...

A. Stotz Investment Research

IDX30/LQ45/IDX80 Index Rebalance: Float & Capping Changes on Tuesday

IDX30/LQ45/IDX80 Index Rebalance: 4 Days to Implementation