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>
<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/ammb-holdings-bhd" target="_blank" data-smartkarma-citation="entities:137:1" rel="noopener">AMMB Holdings (AMM MK)</a> and <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> 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> at the December rebalance.</li>
<li>One way turnover is estimated at 2.87% and the impact of passive flows is larger on the potential adds as compared to the potential deletes.</li>
<li>
<a href="https://www.smartkarma.com/entities/westports-holdings-bhd" target="_blank" data-smartkarma-citation="entities:3954:1" rel="noopener">Westports Holdings (WPRTS MK)</a> is a close add and there could be changes over the next few months as we approach the end of the review period.</li>
</ul>



AMMB Holdings (AMM MK) and Ql Resources (QLG MK) could replace Hartalega Holdings (HART MK) and Top Glove Corp (TOPG MK) at the December rebalance.
One way turnover is estimated at 2.87% and the impact of passive flows is larger on the potential adds as compared to the potential deletes.

Westports Holdings (WPRTS MK) is a close add and there could be changes over the next few months as we approach the end of the review period.


KLCI Index Rebalance Preview: The Gloves Could Come Off

<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>
<a href="https://www.smartkarma.com/entities/supermax-corp-bhd" target="_blank" data-smartkarma-citation="entities:12883:1" rel="noopener">Supermax Corp (SUCB MK)</a> is facing import ban from the U.S. and Canada. Recently, Norway wealth fund has put the investment in the company under observation for two years.</li>
<li>Since 2019, Supermax is being alleged for the poor living and working conditions experienced by its employees. Recently the company has aligned itself to the ILO standard.</li>
<li>However, COVID-driven demand of glove is cooling off. Even upon this, excess capacity is bringing down the average selling price, thereby making the earnings outlook uncertain for glove manufacturers.   </li>
</ul>



Supermax Corp (SUCB MK) is facing import ban from the U.S. and Canada. Recently, Norway wealth fund has put the investment in the company under observation for two years.
Since 2019, Supermax is being alleged for the poor living and working conditions experienced by its employees. Recently the company has aligned itself to the ILO standard.
However, COVID-driven demand of glove is cooling off. Even upon this, excess capacity is bringing down the average selling price, thereby making the earnings outlook uncertain for glove manufacturers.   


Supermax Corp (SUCB MK): Quickly Mending the Damage; Soft Demand Outlook Remains the Main Overhang

Malaysia

Supermax Corporation Berhad is an investment holding company whose subsidiaries manufacture, sell, and export various type of latex gloves around the world.

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Supermax Corp (SUCB 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

KLCI Index Rebalance Preview: The Gloves Could Come Off

AMMB and QL Resources could replace Hartalega and Top Glove in the KLCI at the December rebalance. Westports is a close add, while Top Glove needs...

Brian Freitas

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

Supermax Corp (SUCB MK): Quickly Mending the Damage; Soft Demand Outlook Remains the Main Overhang

Supermax has upgraded itself to comply with the ILO standard, which may lead to repeal the import ban by the U.S. Even if export commences, soft...

Tina Banerjee

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