The Biggish Sep 2023 "Wednesday-Thursday Trade" With Added Monday/Friday Flavour

ECM Weekly (24th Sep 2023) - Cainiao, J&T, Midea, Kokusai, Seoul Guarantee, Barito, Integral, DPC

Midea A/H Listing - Early Look - Probably Raising Acquisition Currency

India Stock Classification Changes - Active Portfolio Churn

SBI Cards - Investors Swiping Out as Lockdown Extended

SBI Cards IPO - Hedge Basket for a Volatile Market

Pan-Asia Index Rebalances/Events/Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/Events/Delta One

Event-Driven

The Indian mutual fund industry has assets of almost INR 5 trillion across Multi cap, Large Cap, Large and Mid Cap, Mid Cap and Small Cap equity schemes. Equity schemes classified as large cap need to have at least 80% of their assets invested in large cap stocks, large and mid cap schemes need to have at least 35% of their assets in large cap stocks and at least 35% in mid cap stocks, mid cap funds need to hold at least 65% of their assets in mid cap stocks, and small cap funds need to hold at least 65% of their assets in small cap stocks.The Association of Mutual Funds in India (AMFI) publishes the list of the stocks in each market cap segment in January and July each year and mutual funds have one month to rebalance their portfolios to adhere to the new categorization.In the upcoming recategorization in January 2021, we see 6 stocks moved from the mid cap segment to the large cap segment with an equal number of stocks moving the other way, and 12 stocks are expected to move from the small cap segment to the mid cap segment with the same number moving the other way. There are quite a few IPOs that will join the small cap list, with just 1 joining the large cap list and 1 joining the mid cap list.Historically, the stocks migrating upward to a higher market cap segment have outperformed stocks that migrate to a lower market cap segment over the 1 month and 2 month period post the publishing of the AMFI list. This can be attributed to fund managers realigning their portfolios to meet the new categorization. This provides opportunities to pre-position for the move and unwind post the announcement of the reclassification.

The Indian mutual fund industry has assets of almost INR 5 trillion across Multi cap, Large Cap, Large and Mid Cap, Mid Cap and Small Cap equity schemes. Equity schemes classified as large cap need to have at least 80% of their assets invested in large cap stocks, large and mid cap schemes need to have at least 35% of their assets in large cap stocks and at least 35% in mid cap stocks, mid cap funds need to hold at least 65% of their assets in mid cap stocks, and small cap funds need to hold at least 65% of their assets in small cap stocks.The Association of Mutual Funds in India (AMFI) publishes the list of the stocks in each market cap segment in January and July each year and mutual funds have one month to rebalance their portfolios to adhere to the new categorization.In the upcoming recategorization in January 2021, we see 6 stocks moved from the mid cap segment to the large cap segment with an equal number of stocks moving the other way, and 12 stocks are expected to move from the small cap segment to the mid cap segment with the same number moving the other way. There are quite a few IPOs that will join the small cap list, with just 1 joining the large cap list and 1 joining the mid cap list.Historically, the stocks migrating upward to a higher market cap segment have outperformed stocks that migrate to a lower market cap segment over the 1 month and 2 month period post the publishing of the AMFI list. This can be attributed to fund managers realigning their portfolios to meet the new categorization. This provides opportunities to pre-position for the move and unwind post the announcement of the reclassification.

Cholamandalam Investment and Finance (CIFC IN)

General Insurance Corp Of India (GICRE IN)

Mazagon Dock Shipbuilders Ltd (MAZDOCKS IN)

Equitas Small Finance Bank  (EQUITASB IN)

Computer Age Management Services (CAMS IN)

Happiest Minds Technologies (HAPPSTMN IN)

India: AMFI Stock Categorization Changes to Drive Active Portfolio Churn

Laurus Labs

India: AMFI Stock Categorization Changes to Drive Active Portfolio Churn