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>Today is the last day of the review period for the June review of the <a href="https://www.smartkarma.com/entities/s-p-bse-sensex-index" target="_blank" data-smartkarma-citation="entities:31494:1" rel="noopener">S&amp;P BSE SENSEX Index (SENSEX INDEX)</a>. Changes become effective at the close on 17 June. </li>
<li>We see <a href="https://www.smartkarma.com/entities/tata-motors-ltd" target="_blank" data-smartkarma-citation="entities:216:1" rel="noopener">Tata Motors Ltd (TTMT IN)</a> and <a href="https://www.smartkarma.com/entities/tata-motors-ltd-a-dvr" target="_blank" data-smartkarma-citation="entities:349:1" rel="noopener">Tata Motors DVR (TTMT/A IN)</a> replacing <a href="https://www.smartkarma.com/entities/dr-reddy-s-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:16406:1" rel="noopener">Dr. Reddy's Laboratories (DRRD IN)</a>. <a href="https://www.smartkarma.com/entities/hindalco-industries-ltd" target="_blank" data-smartkarma-citation="entities:18490:1" rel="noopener">Hindalco Industries (HNDL IN)</a> is a close add on sector balance.</li>
<li>The impact on <a href="https://www.smartkarma.com/entities/dr-reddy-s-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:16406:1" rel="noopener">DRRD IN</a> will be higher than on <a href="https://www.smartkarma.com/entities/tata-motors-ltd" target="_blank" data-smartkarma-citation="entities:216:1" rel="noopener">TTMT IN</a>, in terms of days of ADV to trade and days of delivery volume that needs to change hands.</li>
</ul>


Today is the last day of the review period for the June review of the S&amp;P BSE SENSEX Index (SENSEX INDEX). Changes become effective at the close on 17 June. 
We see Tata Motors Ltd (TTMT IN) and Tata Motors DVR (TTMT/A IN) replacing Dr. Reddy's Laboratories (DRRD IN). Hindalco Industries (HNDL IN) is a close add on sector balance.
The impact on DRRD IN will be higher than on TTMT IN, in terms of days of ADV to trade and days of delivery volume that needs to change hands.


SENSEX Index Rebalance Preview: Tata Motors Should Replace Dr. Reddy; Hindalco Is Close

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

Dr. Reddy's Laboratories / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dr-reddy-s-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:16406:1" rel="noopener">Dr. Reddy's Laboratories (DRRD IN)</a> is outperforming the domestic pharma industry and aims to expand its market share. Currently, India business contributes 19% of revenue. </li>
<li>The company’s largest revenue segment, the U.S. generic business continues to see pricing pressure. It plans to launch new products, including complex generics to combat the impact of price erosion.</li>
<li>Dr. Reddy also has around 13% revenue exposure to Russia and other CIS countries. Sharp depreciation of Russian currency will negatively impact revenue from the region.</li>
</ul>



Dr. Reddy's Laboratories (DRRD IN) is outperforming the domestic pharma industry and aims to expand its market share. Currently, India business contributes 19% of revenue. 
The company’s largest revenue segment, the U.S. generic business continues to see pricing pressure. It plans to launch new products, including complex generics to combat the impact of price erosion.
Dr. Reddy also has around 13% revenue exposure to Russia and other CIS countries. Sharp depreciation of Russian currency will negatively impact revenue from the region.


Dr. Reddy's Laboratories (DRRD IN): India Business Is the Only Bright Spot Amid Many Headwinds

Tata Motors Passenger Vehicles / Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tata-motors-ltd" target="_blank" data-smartkarma-citation="entities:216:1" rel="noopener">Tata Motors Ltd (TTMT IN)</a> and <a href="https://www.smartkarma.com/entities/tata-motors-ltd-a-dvr" target="_blank" data-smartkarma-citation="entities:349:1" rel="noopener">Tata Motors DVR (TTMT/A IN)</a> are likely inclusions to the <a href="https://www.smartkarma.com/entities/s-p-bse-sensex-index" target="_blank" data-smartkarma-citation="entities:31494:1" rel="noopener">S&amp;P SENSEX INDEX</a> in June while <a href="https://www.smartkarma.com/entities/dr-reddy-s-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:16406:1" rel="noopener">Dr. Reddy's Laboratories (DRRD IN)</a> could be deleted.</li>
<li>
<a href="https://www.smartkarma.com/entities/hindalco-industries-ltd" target="_blank" data-smartkarma-citation="entities:18490:1" rel="noopener">Hindalco Industries (HNDL IN)</a> could be added depending on sector balance while <a href="https://www.smartkarma.com/entities/nestle-india-ltd" target="_blank" data-smartkarma-citation="entities:13101:1" rel="noopener">Nestle India (NEST IN)</a> is a close delete on liquidity.</li>
<li>The inclusion of Tata Motors could result in the discount on the DVR line <a href="https://www.smartkarma.com/entities/tata-motors-ltd-a-dvr" target="_blank" data-smartkarma-citation="entities:349:1" rel="noopener">Tata Motors DVR (TTMT/A IN)</a> narrowing versus the common shares <a href="https://www.smartkarma.com/entities/tata-motors-ltd" target="_blank" data-smartkarma-citation="entities:216:1" rel="noopener">Tata Motors Ltd (TTMT IN)</a>. </li>
</ul>



Tata Motors Ltd (TTMT IN) and Tata Motors DVR (TTMT/A IN) are likely inclusions to the S&amp;P SENSEX INDEX in June while Dr. Reddy's Laboratories (DRRD IN) could be deleted.

Hindalco Industries (HNDL IN) could be added depending on sector balance while Nestle India (NEST IN) is a close delete on liquidity.
The inclusion of Tata Motors could result in the discount on the DVR line Tata Motors DVR (TTMT/A IN) narrowing versus the common shares Tata Motors Ltd (TTMT IN). 


SENSEX Index Rebalance Preview (June): Down to the Wire

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mayne-pharma-group-ltd" target="_blank" data-smartkarma-citation="entities:757:1" rel="noopener">Mayne Pharma (MYX AU)</a>'s revenue is decelerating since FY19, which is reflected in its share price performance. From predominantly being into generics, the company is now focusing on specialty pharma.  </li>
<li>In FY21, Mayne Pharma added 11 dermatology and women’s health products to portfolio targeting $650 million in IQVIA sales. Its U.S. contract service business is on a double-digit growth path.</li>
<li>Commercialization of new oral contraceptive Nextstellis in the U.S. is the major growth driver of the company. Neststellis peak U.S. sales are projected at $200 million annually.  </li>
</ul>



Mayne Pharma (MYX AU)'s revenue is decelerating since FY19, which is reflected in its share price performance. From predominantly being into generics, the company is now focusing on specialty pharma.  
In FY21, Mayne Pharma added 11 dermatology and women’s health products to portfolio targeting $650 million in IQVIA sales. Its U.S. contract service business is on a double-digit growth path.
Commercialization of new oral contraceptive Nextstellis in the U.S. is the major growth driver of the company. Neststellis peak U.S. sales are projected at $200 million annually.  


Mayne Pharma (MYX AU): Shifting Focus to Specialty Products to Return to Sustainable Growth Path

<ul>
<li>As expected, the December review of the <a href="https://www.smartkarma.com/entities/s-p-bse-sensex-index" target="_blank" data-smartkarma-citation="entities:31494:1" rel="noopener">S&amp;P BSE SENSEX Index (SENSEX INDEX)</a> sees <a href="https://www.smartkarma.com/entities/wipro-ltd" target="_blank" data-smartkarma-citation="entities:15360:1" rel="noopener">Wipro Ltd (WPRO IN)</a> added and <a href="https://www.smartkarma.com/entities/bajaj-auto-ltd" target="_blank" data-smartkarma-citation="entities:3613:1" rel="noopener">Bajaj Auto Ltd (BJAUT IN)</a> deleted.</li>
<li>Buying on Wipro is 2.5 days of ADV and 8.2 days of delivery volume, while selling on Bajaj Auto is 4.5 days of ADV and 8.9 days of delivery volume.</li>
<li>The overweight of the Information Technology sector in the Sensex gets even bigger and the Consumer Discretionary sector gets even more underweighted vs the BSE All Cap Index.</li>
</ul>


As expected, the December review of the S&amp;P BSE SENSEX Index (SENSEX INDEX) sees Wipro Ltd (WPRO IN) added and Bajaj Auto Ltd (BJAUT IN) deleted.
Buying on Wipro is 2.5 days of ADV and 8.2 days of delivery volume, while selling on Bajaj Auto is 4.5 days of ADV and 8.9 days of delivery volume.
The overweight of the Information Technology sector in the Sensex gets even bigger and the Consumer Discretionary sector gets even more underweighted vs the BSE All Cap Index.


SENSEX Dec 21 Index Rebalance: Wipro Added, Bajaj Auto Deleted

India

Torrent Pharmaceuticals is an Indian multinational pharmaceutical company specializing in the manufacturing, marketing, and distribution of branded generics and generic pharmaceutical products. The company focuses on therapeutic segments such as cardiovascular, central nervous system, gastrointestinal, diabetology, anti-infective, and pain management. It is headquartered in Ahmedabad, Gujarat, India, and was founded in 1959.

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Torrent Pharmaceuticals (TRP IN)

SENSEX Index Rebalance Preview: Tata Motors Should Replace Dr. Reddy; Hindalco Is Close

Tata Motors should replace Dr Reddy at the June rebalance. Hindalco is an alternate add on sector balance. Passives will need to trade 4-7 days of...

Brian Freitas

Dr. Reddy's Laboratories (DRRD IN): India Business Is the Only Bright Spot Amid Many Headwinds

Despite price erosion headwinds in North America generics and revenue exposure to Russia, Dr. Reddy’s Laboratories look attractive due to its...

Tina Banerjee

SENSEX Index Rebalance Preview (June): Down to the Wire

Tata Motors could replace Dr Reddy in the Sensex at the June rebalance. Hindalco is a close add while Nestle is a close delete. The inclusion of...

Brian Freitas

Mayne Pharma (MYX AU): Shifting Focus to Specialty Products to Return to Sustainable Growth Path

Mayne Pharma is well-positioned for next leg of growth through new specialty product launches and portfolio expansion. The shares are trading at a...

Tina Banerjee

SENSEX Dec 21 Index Rebalance: Wipro Added, Bajaj Auto Deleted

Wipro will be added to the Sensex in December while Bajaj Auto will be deleted. Impact on both stocks is over 8 days of delivery volume to trade....

Brian Freitas

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