Smartkarma Daily Briefs

• The market cap review period for the December rebalance of the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) started on 1 September and will end 30 November.
• We currently see one high probability change and two lower probability changes to the index at the upcoming rebalance.
• There are a couple of lower probability adds/deletes that will have between 3-5 days of ADV to trade from passive funds and could be interesting from a trading angle.

• Changes to the S&P/ASX indices, FTSE All-World/All-Cap, VanEck Vectors Rare Earth/Strategic Metals (REMX US) and VanEck Vectors Junior Gold Miners (GDXJ US) will be implemented at the close on Friday.
• There are quite a few stocks that have over 5 days of ADV to trade from passive trackers. Pre-positions will be built up on a lot of names.
• Short interest has increased on a lot of additions/upweights and decreased on the deletions/downweights.

• PayMate India Ltd (935383Z IN) is looking to raise approximately US$193m in its upcoming India IPO.  
• PayMate India is a business to business (B2B) payments and services provider that digitizes, automates and streamlines B2B payments in supply chains. 
• The firm remains unprofitable even on a gross profit level. Its cash burn also appears unsustainable as it has been financing its operations through equity raises. 

• Blue Jet Healthcare Ltd (BJHC IN) is looking to raise about US$300m in its upcoming India IPO. The deal will be run by Kotak, ICICI Securities and JP Morgan. 
• Blue Jet Healthcare (BJH) is a specialty pharmaceutical and healthcare ingredient and intermediate company, offering niche products targeted toward innovator pharmaceutical companies and multinational generic pharmaceutical companies. 
• It operates via a contract development and manufacturing organization (CDMO) model with specialized chemistry capabilities in contrast media intermediates and high-intensity sweeteners, including saccharin and its salts. 

We view First Pacific (FIRPAC) as “Low Risk” on the LARA scale. This is primarily due to the group’s strong assets and tight control over key investee companies, which ensure reliable dividend streams to service debt. The investment holding company has a reasonable track record. Its key assets include Philippine Long Distance Telephone Company, Indofood and Metro Pacific Investments Corp. The group’s asset concentration is offset by the strength of these companies, which are: [1] leaders in their market segments; and [2] stable non-cyclical businesses. Leverage is moderate (measured as Net Debt at Holdco/Market Value of Assets). The investment portfolio has high transparency, with almost all assets (based on NAV) being listed.

Our fundamental Credit Bias is “Stable”​, due to the subsidiaries’ robust performance.

Controversies are “Immaterial” and the ESG Impact on Credit is “Neutral”. As an investment holding company, FIRPAC does not face substantial regulatory, geopolitical or ESG risks.