EM PM, Ecstrat

Emad Mostaque

EM PM

Ecstrat

Ecstrat is a consultancy advising on asset allocation between global equity markets, with a focus on the intersection of governments, geopolitics, governance and markets.
 
Over the past few years and more especially since the Great Financial Crisis (GFC), investors have become more focused on short-term market movements and real-time returns and have consequently neglected the analysis of the underlying structural themes that underpin longer term performance.
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More specifically we believe that the evolution of governance-based relationships between investors, controlling shareholders, labour and the state is one of the primary determinants of both relative and absolute performance between individual equity markets.
 
We will endeavour to provide investors with some of the context surrounding governance-related issues which encompass many different disciplines including history, economics and political science, as well as the financial metrics which are the most obvious manifestation of the structural characteristics of each market.
 
We will pay particular attention to the shifts and potential inflection points for governance in individual markets as these are often the best lead indicators for both economic and market performance.

Thematic (Sector/Industry)

Private market valuations for tech companies have increased sharply in recent years, with an outbreak of so-called "unicorns" (startups valued at over $1bn) and the median seed-stage valuation in the USA now an eye-popping $5.8m leading to fears of a bubble.In contrast the tech IPO pipeline has remained relatively moribund as investors have eschewed public markets (indeed, IPOing is now almost a sign of weakness (!)).If we look at some of the key drivers of these private market flows, we can see that it may actually be different this time and that public market valuations may be set to follow in the coming years.

Private market valuations for tech companies have increased sharply in recent years, with an outbreak of so-called "unicorns" (startups valued at over $1bn) and the median seed-stage valuation in the USA now an eye-popping $5.8m leading to fears of a bubble.In contrast the tech IPO pipeline has remained relatively moribund as investors have eschewed public markets (indeed, IPOing is now almost a sign of weakness (!)).If we look at some of the key drivers of these private market flows, we can see that it may actually be different this time and that public market valuations may be set to follow in the coming years.

Information Technology Consultant

Ishita Jain

In January 2014, I bought my first Fitbit device. At the time, it was a company almost unheard of except by a few. The Fitbit app on the phone was cool too. In remarkable fashion, 15 months later, almost everyone I knew had a&nbsp;Fitbit device. In June 2015, the company went public and became&nbsp;the talk of the town. Aided by the trend of&nbsp;quantifying health and health consciousness, many manufacturers threw their hats in the fitness &lsquo;wearables&rsquo; ring (including giants like Apple and Motorola). The euphoria around Fitbit's IPO was understandable and the numbers for Q2&nbsp;2015 dazzled. Looking forward, will Fitbit continue to impress given that the wearables market is evolving and competitors are crowding the market?&nbsp;

In January 2014, I bought my first Fitbit device. At the time, it was a company almost unheard of except by a few. The Fitbit app on the phone was cool too. In remarkable fashion, 15 months later, almost everyone I knew had a&nbsp;Fitbit device. In June 2015, the company went public and became&nbsp;the talk of the town. Aided by the trend of&nbsp;quantifying health and health consciousness, many manufacturers threw their hats in the fitness &lsquo;wearables&rsquo; ring (including giants like Apple and Motorola). The euphoria around Fitbit's IPO was understandable and the numbers for Q2&nbsp;2015 dazzled. Looking forward, will Fitbit continue to impress given that the wearables market is evolving and competitors are crowding the market?&nbsp;

The Greece government is running out of time and money. 320 billion euros is the size of their&nbsp;debt mountain. Money enough to carry out 15 Apollo moon landings!It owes 6.74 B euros in June (IMF and short-term bills), 5.95 B euros in July (IMF, ECB and short-term bills) and 4.38 B euros in August (IMF, ECB and short-term bills).They may default on their loans and reach the much dreaded&nbsp;<a href="http://lexicon.ft.com/Term?term=Grexit" target="_blank">Grexit</a>&nbsp;from Euro. Unless they find saviours and implement serious reforms&nbsp;quickly, the&nbsp;Greeks&nbsp;will come back to drachma, face inflation, unemployment and an abysmal fall in their GDP.While most industries are swimming against the tide to survive, the tourism industry is a proud exception. Greece is witnessing a summer flooded&nbsp;with tourists. Flights&nbsp;are full, beaches are bustling and hotels are&nbsp;full capacity. Will the inevitable debt storm&nbsp;end the vacation for the tourism industry? Let us deep dive.

The Greece government is running out of time and money. 320 billion euros is the size of their&nbsp;debt mountain. Money enough to carry out 15 Apollo moon landings!It owes 6.74 B euros in June (IMF and short-term bills), 5.95 B euros in July (IMF, ECB and short-term bills) and 4.38 B euros in August (IMF, ECB and short-term bills).They may default on their loans and reach the much dreaded&nbsp;Grexit&nbsp;from Euro. Unless they find saviours and implement serious reforms&nbsp;quickly, the&nbsp;Greeks&nbsp;will come back to drachma, face inflation, unemployment and an abysmal fall in their GDP.While most industries are swimming against the tide to survive, the tourism industry is a proud exception. Greece is witnessing a summer flooded&nbsp;with tourists. Flights&nbsp;are full, beaches are bustling and hotels are&nbsp;full capacity. Will the inevitable debt storm&nbsp;end the vacation for the tourism industry? Let us deep dive.

Greece's Travel & Tourism industry shines amidst crisis

The shared economy companies&nbsp;are threatened by laws and regulation. But then, which <a href="http://en.wikipedia.org/wiki/Disruptive_innovation" target="_blank">disruptive</a> businesses are not? Uber and Airbnb are likely to be darlings of Wall Street if they decide to go public. But will they live up to the hype? Possibly in the long run, some things could go downhill. But with access to capital, low debts and high reach, these companies are likely to cover their tracks and stay on top in the near future. But skeptics would compare these possible high profile IPOs to <a href="http://www.forbes.com/sites/joanlappin/2013/11/11/two-years-after-its-busted-ipo-groupon-still-cant-turn-a-profit/" target="_blank">Groupon</a> and <a href="http://www.cnbc.com/id/102020026" target="_blank">Alibaba</a> which saw decline in shares after going public. Time will tell.

The shared economy companies&nbsp;are threatened by laws and regulation. But then, which disruptive businesses are not? Uber and Airbnb are likely to be darlings of Wall Street if they decide to go public. But will they live up to the hype? Possibly in the long run, some things could go downhill. But with access to capital, low debts and high reach, these companies are likely to cover their tracks and stay on top in the near future. But skeptics would compare these possible high profile IPOs to Groupon and Alibaba which saw decline in shares after going public. Time will tell.

Will the 'shared economy' pioneers be the next Twitter or Facebook?

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>There were 6 inclusions and 6 exclusions for the <a href="https://www.smartkarma.com/entities/nasdaq-100-stock-index" target="_blank" data-smartkarma-citation="entities:26197:1" rel="noopener">Nasdaq-100 Stock Index (NDX INDEX)</a> at the annual December reconstitution. Then another ad hoc change was added on top of that.</li>
<li>Impact on the inclusions ranges from 1-8 days of ADV to buy, while the impact on the deletions varies from 0.7-2.6 days of ADV to sell.</li>
<li>Apart from the constituent changes, there are expected to be inflows in <a href="https://www.smartkarma.com/entities/tesla-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors</a> and <a href="https://www.smartkarma.com/entities/broadcom-inc" target="_blank" data-smartkarma-citation="entities:998:1" rel="noopener">Broadcom</a> and outflows from <a href="https://www.smartkarma.com/entities/apple-inc" target="_blank" data-smartkarma-citation="entities:666:1" rel="noopener">Apple</a>, <a href="https://www.smartkarma.com/entities/microsoft-corp" target="_blank" data-smartkarma-citation="entities:15273:1" rel="noopener">Microsoft</a>, <a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com</a> and <a href="https://www.smartkarma.com/entities/nvidia-corp" target="_blank" data-smartkarma-citation="entities:5891:1" rel="noopener">NVIDIA</a>.</li>
</ul>


There were 6 inclusions and 6 exclusions for the Nasdaq-100 Stock Index (NDX INDEX) at the annual December reconstitution. Then another ad hoc change was added on top of that.
Impact on the inclusions ranges from 1-8 days of ADV to buy, while the impact on the deletions varies from 0.7-2.6 days of ADV to sell.
Apart from the constituent changes, there are expected to be inflows in Tesla Motors and Broadcom and outflows from Apple, Microsoft, Amazon.com and NVIDIA.


NASDAQ 100 Index Rebalance: 6 Regular Changes + 1 Adhoc Change; US$37bn to Trade

United States

Splunk Inc. develops web based application software. The Company provides software that collects and analyzes machine data generated by websites, applications, servers, networks, and mobile devices. Splunk serves customers worldwide.

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Splunk Inc (SPLK US)

Why large funds are piling into PE & VC

Private market valuations for tech companies have increased sharply in recent years, with an outbreak of so-called "unicorns" (startups valued at...

Emad Mostaque

Fitbit, a good 'fit' for your portfolio?

In January 2014, I bought my first Fitbit device. At the time, it was a company almost unheard of except by a few. The Fitbit app on the phone was...

Ishita Jain

Greece's Travel & Tourism industry shines amidst crisis

The Greece government is running out of time and money. 320 billion euros is the size of their debt mountain. Money enough to carry out 15 Apollo...

Ishita Jain

Will the 'shared economy' pioneers be the next Twitter or Facebook?

The shared economy companies are threatened by laws and regulation. But then, which disruptive businesses are not? Uber and Airbnb are likely to be...

Ishita Jain

NASDAQ 100 Index Rebalance: 6 Regular Changes + 1 Adhoc Change; US$37bn to Trade

There are 7 changes at the close on 15 December with an estimated one-way trade of US$18.7bn. Impact on the constituent changes varies from 1-8...

Brian Freitas

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