Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

<ul>
<li>The September 2024 Rebalance results for the NIFTY broad market Indices were announced after the close on Friday 23rd August 2024.</li>
<li>There will be two changes for NIFTY 50 and five changes for NIFTY 100 during the September 2024 index rebal event. All of these changes were as predicted. </li>
<li>All NIFTY 50 and NIFTY 100 changes will also be reflected in the NIFTY Next 50 index which could see US$647mn one-way capping flows.</li>
</ul>


The September 2024 Rebalance results for the NIFTY broad market Indices were announced after the close on Friday 23rd August 2024.
There will be two changes for NIFTY 50 and five changes for NIFTY 100 during the September 2024 index rebal event. All of these changes were as predicted. 
All NIFTY 50 and NIFTY 100 changes will also be reflected in the NIFTY Next 50 index which could see US$647mn one-way capping flows.


Quiddity NIFTY Sep 24 Rebal: US$647mn One-Way Capping for NIFTY Next 50; All Changes Were Predicted

External broker reports(aggregated public sources), Emkay Global Financial Services Limited

Emkay

External broker reports(aggregated public sources)

Emkay Global Financial Services Limited

Emkay Global Financial Services Ltd. is a leader in the financial services sector, actively creating wealth for our clients for over two decades. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

SBI Cards & Payment Services / Equity Bottom-Up

<ul><li>Amid rising hopes of a policy rate cut in CY25, we believe SBI Cards with its fixed rate asset portfolio and higher share of borrowings maturing in &lt;1 year, could benefit on the margins front which has stabilized after a prolonged contraction cycle.</li><li>However, asset quality has deteriorated meaningfully with GNPA/Stage 2 pool already rising to 3.1%/6.2% of loans in 1QFY25 from 2.4%/5.3% a year ago.</li><li>Our industry level channel checks suggest that the overall stress build-up in the card business remains elevated, which coupled with the regulatory salvo on unsecured loans could hurt business growth.</li></ul><p><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></p>

Amid rising hopes of a policy rate cut in CY25, we believe SBI Cards with its fixed rate asset portfolio and higher share of borrowings maturing in &lt;1 year, could benefit on the margins front which has stabilized after a prolonged contraction cycle.However, asset quality has deteriorated meaningfully with GNPA/Stage 2 pool already rising to 3.1%/6.2% of loans in 1QFY25 from 2.4%/5.3% a year ago.Our industry level channel checks suggest that the overall stress build-up in the card business remains elevated, which coupled with the regulatory salvo on unsecured loans could hurt business growth.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.

SBI Cards - Margins to Bottom-Out, but Asset Quality Remains an Irritant

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

Bharat Heavy Electricals / Index Rebalance

<ul>
<li>There are 7 changes 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> that will be implemented at the close on 27 September. Changes are on expected lines.</li>
<li>Estimated one-way turnover for the <a href="https://www.smartkarma.com/entities/nse-nifty-next-50-index" target="_blank" data-smartkarma-citation="entities:36053:1" rel="noopener">Nifty Next 50 Index (NIFTYJR INDEX)</a> is 19.6% resulting in a one-way trade of INR 63.64bn (US$759m). Many stocks have over 1x ADV to trade.</li>
<li>The adds have outperformed the deletes this year but there has been big underperformance over the last month as stocks expected to benefit from rural spending have rallied.</li>
</ul>


There are 7 changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) that will be implemented at the close on 27 September. Changes are on expected lines.
Estimated one-way turnover for the Nifty Next 50 Index (NIFTYJR INDEX) is 19.6% resulting in a one-way trade of INR 63.64bn (US$759m). Many stocks have over 1x ADV to trade.
The adds have outperformed the deletes this year but there has been big underperformance over the last month as stocks expected to benefit from rural spending have rallied.


NIFTY NEXT50 Index Rebalance: 7 Changes on Expected Lines

<ul>
<li>There are 19 changes a side for the NIFTY Midcap 150 Index at the September rebalance. There are many stocks with same-way flows from passive trackers of other indices.</li>
<li>Estimated one-way turnover is 9.8% resulting in a one-way trade of INR 8.2bn (US$98m). With US$40.1bn tracking the index actively, the impact on the stocks will be much larger.</li>
<li>The adds have outperformed the deletes this year, though near-term performance has been meh. There was a similar trend in March and the adds could outperform nearer to implementation.</li>
</ul>


There are 19 changes a side for the NIFTY Midcap 150 Index at the September rebalance. There are many stocks with same-way flows from passive trackers of other indices.
Estimated one-way turnover is 9.8% resulting in a one-way trade of INR 8.2bn (US$98m). With US$40.1bn tracking the index actively, the impact on the stocks will be much larger.
The adds have outperformed the deletes this year, though near-term performance has been meh. There was a similar trend in March and the adds could outperform nearer to implementation.


NIFTY MIDCAP150 Index Rebalance: 19 Changes a Side; Lots of Overlap with Other Index Flow

Dr. Reddy's Laboratories / Index Rebalance

<ul>
<li>NIFTY 50 represents the 50 largest stocks listed in the National Stock Exchange (NSE) of India and the NIFTY Next 50 index tracks the next 50 largest names.</li>
<li>With three more trading days left in the reference period, we are presenting our final  expectations for ADDs and DELs for the September 2024 index rebal event.</li>
<li>We see five changes for the NIFTY 100 index which will also affect the NIFTY Next 50 index. There could also be multiple changes for the NIFTY 50 index.</li>
</ul>


NIFTY 50 represents the 50 largest stocks listed in the National Stock Exchange (NSE) of India and the NIFTY Next 50 index tracks the next 50 largest names.
With three more trading days left in the reference period, we are presenting our final  expectations for ADDs and DELs for the September 2024 index rebal event.
We see five changes for the NIFTY 100 index which will also affect the NIFTY Next 50 index. There could also be multiple changes for the NIFTY 50 index.


Quiddity Leaderboard NIFTY Sep 24: Final Expectations; Trades Perform Positively; New Ideas

India

SBI Cards and Payment Services Private Limited provides credit card services. The Company offers payment products and services in the form of corporate and credit cards with incentive and rewards programs. SBI Cards and Payment Services serves customers in India.

SBI Cards & Payment Services (SBICARD IN)

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SBI Cards & Payment Services (SBICARD IN)

Quiddity NIFTY Sep 24 Rebal: US$647mn One-Way Capping for NIFTY Next 50; All Changes Were Predicted

The NIFTY50/NIFTY Next 50 Inclusion/Exclusion events will take place at the close of 27th September 2024. The final capping flows will be decided...

Janaghan Jeyakumar, CFA

SBI Cards - Margins to Bottom-Out, but Asset Quality Remains an Irritant

However, asset quality has deteriorated meaningfully with GNPA/Stage 2 pool already rising to 3.1%/6.2% of loans in 1QFY25 from 2.4%/5.3% a year ago.

Emkay

NIFTY NEXT50 Index Rebalance: 7 Changes on Expected Lines

There are 7 changes for the NIFTY Next50 Index. Estimated 1-way turnover is 19.6% resulting in a 1-way trade of INR 63.64bn (US$759m). There are...

Brian Freitas

NIFTY MIDCAP150 Index Rebalance: 19 Changes a Side; Lots of Overlap with Other Index Flow

There are 19 changes for the index in Sep. Estimated one-way turnover is 9.8% resulting in a one-way trade of INR 8.2bn (US$98m). There are many...

Brian Freitas

Quiddity Leaderboard NIFTY Sep 24: Final Expectations; Trades Perform Positively; New Ideas

The official index changes for the NIFTY September 2024 index rebal event will be confirmed after market close on Friday 23rd August 2024. In this...

Janaghan Jeyakumar, CFA

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