Promoter ownership data is an important piece of information that can be consumed in risk assessment of corporate borrowers. This is because steep fall in promoter ownership could mean low confidence of promoters in their own company. Moreover, promoter equity dilution may also invite a change in management.
Our hypothesis is that promoter ownership related red flags such as a significant drop in promoter shareholding can act as a leading indicator to the deterioration in the company’s financial performance.
To test this hypothesis, we back-tested business rule output derived from FiND Credit Risk Early Warning System for all listed companies. Our back-testing has shown 298 promoter ownership related red flags for 232 companies for the March 2016 quarter.
As a next step, we have checked if there is any deterioration in the company’s performance captured by our Financial Risk score for these 232 companies over the last 2 years.
We found that: 85% of companies witnessed a deterioration in Financial Risk score in the subsequent quarters.
Highway developer Dilip Buildcon received extremely positive media coverage during the past 1-month. Buoyant media coverage lifted Dilip Buildcon’s news sentiment (50-day moving average DMA) to the highest level in the past 1-year on Feb. 23, 2018.
We highlight media coverage trends for Dilip Buildcon below:
#1. At 43, Dilip Buildcon’s news sentiment 50-DMA was the highest among its peers. On the other hand, news sentiment 50-DMA for Sadbhav Infrastructure Project was the lowest among highway developers.
2017 was the first year when Tesla’s Model S outsold its German rivals in the luxury sedan segment in Europe. Model S was launched in Europe in 2013, the same year as Mercedes S-Class and has been the main rival of S-class till 2016 before outpacing it in 2017 (Image 1).
Globally, Model S remains Tesla’s best-selling model and constituted more than half (53%) of the global deliveries in FY17.
[Image 1: Luxury sedan annual retail sales in Europe for top 4 players]
Model S retail sales grew at a staggering 38.6% in 2017. On the other hand, BMW 7-Series and Mercedes S-Class recorded a drop of 13.4% and 1.4% respectively in 2017. Meanwhile, Audi A-8 reported a modest growth of 9.6% in 2017. Read the rest of this entry »
The Indian pharma market has grown at an 8% compounded annual growth rate (CAGR) during the calendar year 2013-2017, helped by impressive growth in chronic segment sales. The pharma sales stood at USD 17.87 billion for the moving annual total (MAT) ended December 2017, up from USD 13.35 billion in CY13 (Image 1). On a year-on-year basis, the pharma market witnessed an 8.83% increase in sales for twelve months ended December 2017.
[Image 1: The Indian pharma market sales – moving annual total]
The chronic segment (a disease that persists over a long period of time such as diabetes, high blood pressure, Alzheimer etc.), which accounts for 32% of total Indian pharma market, staged a stellar performance during the CY13-17 period. Changes in lifestyle and food habits coupled with higher disposable income fueled growth in chronic diseases in recent years. Read the rest of this entry »
FiND media coverage study showed negative news sentiment for one-in-ten BSE500 companies during January 2018.
Dr. Reddy’s Laboratories Ltd, one of the leading drug makers in India, is one such company whose news sentiment has deteriorated significantly during the month of January 2018.
We highlight media coverage trends for Dr. Reddy’s below:
#1. News sentiment decelerates ahead of fall in the stock price
[Image 1: Sentiment Score 20 DMA versus Stock Price Performance]
#2: At negative 37, Dr. Reddy’s sentiment score 20-DMA was the lowest among its peers
[Image 2: Sentiment Score Peer Comparison] Read the rest of this entry »
Crude oil price has demonstrated a strong rally over the past 5-months. On Thursday, crude oil WTI futures jumped above USD 66 per barrel for the first time in more than three years. The rally in crude oil prices was supported by OPEC’s extension of production cut, strong demand and continuous drop in the US stockpiles of crude oil.
FiND, an alternative data platform developed by Heckyl showed the demand for crude oil has been outstripping supply consistently since February last year (Image 1).
[Image 1: Crude Oil Supply-Demand Balance]
At the same time, the US crude oil inventories have been witnessing downtrend for the past 10-months (Image 2).
[Image 2: US Crude Oil Inventory] Read the rest of this entry »
News sentiment for the state-run mineral producer NMDC soared to the highest level in the past 12-months as the positive media coverage gained momentum during December 2017. At 51, Heckyl sentiment score 50-day moving average (DMA) was at the highest in the past 1-year on Jan. 2, 2018.
At the same time, positive press coverage was also reflected in the share price (Image 1). Since November 30, NMDC has appreciated nearly 17% as buoyant news sentiment fueled optimism about the future prospects.
Production, ratings, contracts, product pricing, and expansion related news items dominated NMDC’s media coverage in the past 1-month (Image 2). Moreover, news coverage under these categories was extremely positive during this period.
Cadila Healthcare secured the highest number of ANDA (abbreviated new drug application) approvals among Indian pharmaceutical companies during the past nine month period.
The country’s fourth-largest drugmaker by market cap has received 70 ANDA approvals in the current financial year (Image 1). Out the total, 21 ANDA approvals were received by the company during the previous quarter.
The drug makers are required to obtain ANDA approval from the FDA to manufacture and market the low-cost generic alternative to the brand-name drug in the US market.
Total SA leads positive news coverage among top 10 oil & gas companies in 2017
Global oil & gas companies witnessed a significant improvement in underlying news sentiment for December 2017 quarter. Crude oil prices are at its highest level in past 8-quarters (Image 1), which has led to improvement in prospects of earnings, production and growth-oriented activities for the oil & gas companies. As a result, news coverage on top 100 global oil & gas companies during Q4 was most positive in the past 8-quarters.
FiND, an alternative data platform developed by Heckyl has accurately captured movement in news sentiment for the oil & gas sector. For the past 8-quarters, our positive to negative news ratio for top 100 oil & gas companies showed near perfect positive correlation (0.95) with Dow Jones Global Oil & Gas index (Image 2).
(The ratio value higher than 1 indicates mostly positive news sentiment. On the other hand, the ratio value lower than 1 signals broadly negative news sentiment.) Read the rest of this entry »
Product launch, alternative energy top news topics for global automakers
Surge in news volume highlighting alternative energy signals the automotive industry is moving towards electric vehicles at top speed
Tesla Inc. topped the media coverage among 20 major global automakers in 2017 followed by Volkswagen, Ford Motor, and Toyota (Image 1). Tesla generated a lot of media frenzy around its market launch of Model 3 and unveiling of Roadster and Tesla Semi during this year.
FiND, an alternative data platform showed a surge in news flow highlighting alternative energy for all major automakers globally (Image 2). Automotive product launches generate lots of media coverage and thus it topping the list is understandable.
Read the rest of this entry »
Analysts’ bearish stance on GSK weighs on stock price heavily
Media coverage for GlaxoSmithKline Plc, one of the world’s largest drug makers was dominated by Stock Rating related news items in the past 90-days. FiND, an alternative data platform showed the underlying news sentiment for analyst rating coverage on GSK was mostly negative during this period (Image 1).
FiND offers high-end Media analytics by tracking mainstream news and social media in real-time and analyzing movement in underlying sentiment around it for all listed and unlisted companies across the globe.
Passenger load factor is one of the key operating metrics for airlines. It measures how much of an airline’s passenger carrying capacity is used. Aviation is a capital-intensive sector and it is important for airlines to maintain higher load factor as it can lead to improvement in profitability.
FiND, an alternative data platform identified 12 airlines witnessing consistent improvement in monthly passenger load factor in 2017 when compared with 2016. We have highlighted passenger load factor trend for 4 such airlines below:
2017 is turning out to be a year of growth for passenger vehicle (PV) markets in Brazil and Russia, marking a shift in direction for the first time in last 5-years. Brazil and Russia, two commodity-driven economies witnessed a strong pick up in PV sales volume over the past 6-months.
The uptrend in commodity cycle helped Russia and Brazil to bounce back from recession in 2017. With the revival in economic activities, PV manufactures in these two countries logged double-digit growth in monthly sales volume (Image 1).
Come winter and the noise about air pollution increases multi-fold in the news and social media coverage. And so increases the calls for curbing pollution from vehicular emissions. Thankfully, we are closer to increase in the proportion of alternate energy vehicles in our fleet now than we were a couple of years back. In this study, we have highlighted how countries are placed in terms of electric vehicles sales growth and penetration.
China continues to be the engine behind electric vehicle growth in the world, thanks to policy push from the Chinese government. In the first 9 months of 2017, the sale of electric vehicles (pure and hybrid both) increased by 46% (Image 1). China contributed 22% out of the 46% growth followed by Europe (11%), USA (6%) and rest of the world contributing 7%.
In today’s digital world, no company can afford to ignore their coverage on mainstream and social media. It is extremely important for companies to track media coverage and analyse sentiment around it regularly for preventing a PR crisis.
Heckyl has introduced Media Monitoring Tool, which offers unique insights through deep-dive analytics on the company’s news and social media coverage.
To demonstrate Heckyl’s capabilities and depth of news coverage, we conducted a study on international media coverage for the Nifty companies during the past 30-days.
Our analysis showed that Tata Motors, Infosys, and Bharti Airtel were the top 3 companies attracting maximum news coverage from international media houses.
In our view, keeping track of international media coverage and analysis of underlying tone of news stories is essential for the companies with global presence.
In this blog post, we highlight infographics which shows region-wise news coverage, the tone of global media coverage and top news publishers for these 3 companies.
Heckyl Seasonality screen helps you to identify unique opportunities for trading in commodities by bringing out the best insights from the historical patterns.
We studied the directional likeness of 10 completed months of 2017 with the average monthly price trends of the past 5-years to derive at an accuracy score. The accuracy is calculated as
Here we are sharing 4 success stories for this year. Read the rest of this entry »
Reliance Jio, India’s fourth largest telecom company, witnessed a drop in the share of voice for both mainstream and social media in October 2017 when compared with previous month.
The share of voice for mainstream media stood at 15.6% in October, down from 22.6% in the previous month. At the same time, the share of voice for social media (Twitter) dropped to 14.1% in October from 21.1% in the last month (Image 1).
French drug-maker Sanofi faces risk to its 16% of revenues after its top-selling drug Lantus came under threat from the generic manufacturers. The fear of losing revenue from Lantus has forced Sanofi to defend its intellectual property rights. Recent news flow showed that the maker of Lantus drug filed several patent infringement suits against the generic manufacturers.
Lantus, an “Insulin glargine” (a long-acting basal insulin analogue), accounted for 16.4% of Sanofi’s net sales in 2016. Lantus consists of microcrystals, which slowly releases insulin over a period of 24 hours with a peak-less profile. This drug helps in controlling the blood sugar of diabetic people.
Lantus is one of the major drugs in the anti-diabetic segment. In 2015, Lantus accounted for ~17% of the global sales for anti-diabetic products.
Heckyl Sentiment Index for Nifty regained strength and moved back into bullish territory, indicating the recent rally in the 50-share index may continue in the near term. The Modi government’s Rs 9-trillion plan to boost economy fueled optimism in the market and has sent the broad based Nifty to a record high level during the past week.
Heckyl has developed a Sentiment Index to track the sentiment around the market based on news development. This index analyses the potential impact of the sentiment on the value of Nifty index. This is done through an analysis of the news flow on the Nifty companies in real-time.
Our back-testing has indicated a strong positive correlation (0.80+), implying that the Heckyl Sentiment Index is an alternative proxy for the 50-share index.
Sentiment Index for Nifty regained strength (Image 1) after the Modi government decided infuse Rs 2.1-trillion as capital in the ailing public sector banks. Moreover, the government’s plan to spend whopping Rs 7-trillion on the road projects also lifted the sentiments.
During the last week, the Nifty moved up 1.70 percent, while the 30-share Sensex surged 2.40 percent.
Bharti Airtel dominated media coverage among the leading telecom companies in the past 30-days, while news sentiment soared to the highest level in the past 12-months.
Media share of voice for the India’s largest telecom operator stood at 43%, followed by Reliance Communications (26.4%) and Vodafone India (22%) [Image 1].
Bharti Airtel and Vodafone India have recorded a surge in sentiment score over the past 2-months helped by positive media coverage. On the other hand, news sentiment for Reliance Communications remained in negative territory during the same period [Image 2].
Patents on drugs worth over USD 200 billion are going to expire in the next 5-years, according to a study conducted by Heckyl. More than 330 drugs will lose patents issued by the US Patent and Trademark Office during CY2018-2022. These drugs constitute ~38.5% of the total number of patented drugs in the US.
A slew of impending patent expirations in the US offers a huge opportunity for generic drug manufacturers. The key beneficiaries of upcoming patent expiries are Mylan, Teva, Celgene, Wockhardt, Dr Reddy’s, Cipla, Lupin, Aurobindo, Natco and Cadila.
The bad loans of Indian banks has touched a record high of Rs 9.5 trillion at the end of June 2017. The banks witnessed an increase of 4.5% in bad loans from January to June 2017, according to RBI data. The recent surge in bad loans suggests that there is no end to the NPA crisis anytime soon.
Heckyl believes there is a lot more that can be done in the credit risk space in the financial institutions. It is no secret anymore that be it the banks or the non-banking financial companies (NBFCs), the wrath of the non-performing assets has spared none. Although, these financial institutions have their existing risk models in place, the important question remains, that is, are they able to comprehensively highlight the impending risk ahead of time?
Heckyl has developed innovative Credit Risk Early Warning System (EWS) that collects, organizes and performs deep-dive analytics on structured and unstructured data sets to offer 360-degree view on lender’s loan portfolio. Our EWS application identifies the pre-default behavior of corporate borrowers to help lenders pick up warning signals ahead of time.
Heckyl EWS spots several red-flags on Sintex Industries Read the rest of this entry »
Equity mutual funds have recorded nearly 4-fold growth in net inflows in the past six months. Net inflows in equity-oriented funds stood at a staggering Rs 76,065 crore for the first half of the financial year 2017, up from Rs 19,829 crore in the same period last year. At the same time, equity funds’ asset under management (AUM) grew 22% over the past six months primarily due to a surge in net inflows.
Heckyl has developed India’s first Sentiment Index for Mutual Funds. Our proprietary Sentiment Index offers a broad reading of collective sentiment through real-time analysis of news flow on the stocks within fund portfolio.
News, which drives the day-to-day movement in the stock prices, can help to predict fund performance. A positive news flow on the stocks within the portfolio could possibly indicate better returns ahead and vice-versa.
Heckyl Sentiment Index can help fund managers to decipher underlying sentiment around fund portfolio. Our Sentiment Index indicates bullish/bearish signals for equity funds based on the crossover of fast and slow moving averages of the daily sentiment index value.
Delta Air Lines rallied on Tuesday after the company issued better-than-expected guidance for the third quarter passenger unit revenue. Despite fall in passenger traffic in September 2017, Delta management expects passenger unit revenue to increase by 2% for the quarter ended September 2017.
In September, operations of few US-based airlines including Delta were affected by the Hurricane Irma. Bad weather conditions forced Delta to cancel 22,000 flights in the last month. As a result, the carrier reported a drop of 2.3% (on a year-on-year basis) in the number of passengers carried during September.
Heckyl’s alternative data platform FiND did not show any major impact of Hurricane Irma on Delta’s operational performance for the quarter ended September 2017. Our analysis showed a growth of 3% (on a y-o-y basis) in the number of passengers carried by Delta during the quarter ended September 2017.
Heckyl has developed a Sentiment Index that analyses the potential impact of the sentiment on the value of Straits Times Index (STI) in real-time.
The Sentiment Index indicates bullish/bearish signals based on the crossover of fast and slow moving averages of the daily sentiment index value. This is done through an analysis of the news flow on the 30-largest public listed companies in real-time.
Our back-testing has indicated a strong positive correlation (0.75+), implying that the Heckyl Sentiment index is an alternative proxy for the Straits Times index.
Currently, Heckyl Sentiment Index for Straits Times index is in mildly bearish territory, indicating the sideways trade may continue.
Tata Motors dominated media coverage among the leading auto makers in the past 30-days. At 56.4%, Tata Motors’ media share of voice was the highest when compared with its peers.
55,000+ companies ventured into services sector: Could these new entrants be the prospective targets for banks?
Heckyl Business Intelligence application identifies companies, who at some point in time, may require funds to finance their various business operations. Our BI engine identified 55,082 private limited companies that have ventured into the services business between Aug. 1, 2016 and Jul. 31, 2017. These companies were formed with an aggregate paid up capital of Rs 2,944 crores.
In our view, building early relationships with young companies could be relatively easier for banks than building new-relationships with established companies. Newly incorporated companies could be the potential targets for banks to offer various products such as working capital, long-term loans, payrolls, bill discounting etc. The banks can grow their business by tapping these young companies when they are in need of funding. Read the rest of this entry »
The 7.1 magnitude earthquake that hit Mexico on September 19 has left auto OEMs, suppliers and dealers worried on possible production and sales losses, if any. Fortunately, Central Mexico, the worst affected area, has fewer manufacturing plants compared to other parts of the country.
But as a participant in the auto supply chain, are you well prepared to hedge or possibly gain out of the situations like these?
FiND, a brand new Alternative Data platform, can not only alert you about the OEMs and plants which are worse impacted by the supply disruptions but also can provide information about the models and parts produced in these plants.
Media coverage was overwhelmingly positive for Oil Marketing Companies (OMCs) during August 2017. Corporate growth, expansion and M&A related news flow dominated the media coverage for OMCs in the past month.
Indian Oil Corporation Ltd (IOCL), the country’s largest OMC, witnessed a marked improvement in positive media coverage during August 2017.
Journey from stagnant unit sales and average profit margins
Maruti Suzuki recorded stagnant unit sales during FY13 (up 3.3% y-o-y) and FY14 (down 1.4% y-o-y). EBITDA margin stood in the range of 8% to 11% during FY13 and FY14.
… to industry beating growth rates
India’s top car manufacturer witnessed a substantial improvement in both unit sales growth and margins during the past 3-years. Annual unit sales growth was in the range of 9-12% during FY15 to FY17. At the same time, EBITDA margin has also improved from 10.9% in FY14 to 15.2% in FY17.
Maruti Suzuki’s progress over the past 10-quarters
Were you able to spot these young companies engaged in the manufacturing of food products?
Could these companies be the prospective targets for your Relationship Managers?
Heckyl Business Intelligence application spotted 700+ early stage companies who have recently ventured into the manufacturing of food products.
Heckyl BI engine identifies companies, who at some point in time, may require funds to finance their various business operations.
Newly incorporated companies engaged in the capital-intensive manufacturing business could be the potential targets for offering working capital or long-term loans.
Read the rest of this entry »
Heckyl Credit Risk Early Warning System has identified 50+ companies with a long working capital cycle based on analysis of 1,012 companies’ balance sheet for FY16 and FY17. The longer working capital cycle puts pressure on company’s cash flows and may result in higher short term debt. Hence, long working capital cycle is a red-flag for lenders.
Heckyl system captures company related red-flags based on a variety of business rules. Financial data is one of the important data points in the assessment of credit risk. Heckyl EWS consists of thousands of business rules that analyze the financial data.
The UK new passenger vehicle sales data has shown a decline in recent months. Conversely, European new passenger vehicle sales continue its upward trajectory. The downward trend in UK sales is the first in five years.
The UK passenger vehicle sales’ 12-month moving sum for June 2017 and July 2017 fell below the previous year’s same period unit sales level for the first time in the last 5-years.
UK Passenger Vehicle Sales
Heckyl analysed media coverage on the leading FMCG companies in India. Our analysis shows that the news coverage for Godrej Consumer Products Ltd, Dabur India Ltd, and Marico Ltd was mostly positive between April 27, 2017 to July 26, 2017 period.
Meanwhile, MoneyControl was one of the top news publishers for these companies. At the same time, the overall tone of news that featured on MoneyControl was positive for above 3 players.
Below charts shows the tone of overall media coverage by top 5 news publishers for 3 FMCG players as below:
News sentiment for 308 companies from the S&P 500 index stood above 12-month average in July 2017, according to a study conducted by Heckyl Technologies. Many of these companies are from financials, consumer discretionary, industrials, and health care sectors.
Overall news sentiment for S&P 500 companies remained buoyant in July. News sentiment average for July was positive for 474 companies indicating overall optimism in the S&P 500 index, the leading indicator of US equities.
At the same time, 56 companies primarily from health care, financials, and industrials witnessed a jump in monthly news sentiment average to 1-year high in July. Lockheed Martin Corp, Blackrock, The Charles Schwab Corp, Adobe Systems Inc and Nextera Energy were some of the companies whose monthly news sentiment average surged to 1-year high.
Heckyl Credit Risk Early Warning System captures company-related red flags based on a variety of business rules. We have analyzed the data around pledging of shares by promoters of listed companies.
In our view, pledging of stake by promoters is a potential red-flag for lenders as it a) indicates the stress that has piled up on corporate finance and b) it may lead to loss of management control for the promoters in case of invocation of shares. Read the rest of this entry »
HCL Infosystems, an IT hardware and systems integrator, recorded a surge in share price on Tuesday (Jul. 18, 2017) after the leading financial daily stated Apple is likely to form distribution tie up with the company.
While clarifying on the media reports, the company said it is in various stages of discussion with multiple original equipment manufacturers (OEMs) for distribution arrangement of their products.
HCL Infosystems, which has a strong presence across the country, witnessed a huge buying interest in the stock market on the hopes of distribution tie up with the iPhone maker.
The stock rallied 18.74 percent to settle above 200-day moving average on Tuesday. Moreover, the volume of shares also spiked 21 times over the past 30-days average.
Were you able to spot these newly incorporated companies in the construction sector?
Could these companies be the prospective targets for your Relationship Managers?
Heckyl Business Intelligence application identifies companies, who at some point in time, may require funds to finance their various business operations.
Heckyl BI engine spotted 494 recently incorporated companies, which are ventured into the construction business. Read the rest of this entry »
Heckyl Media Monitoring Tool showed a shift in average news sentiment (from negative to positive) for more than 20 companies from top 500 listed companies recently.
In our view, regular monitoring of media coverage can help corporate communications team to analyze news patterns and track movement in underlying sentiment for their company as well as competitors.
Surge in growth-oriented news flow in H1’17 signals improvement in India Inc business confidence: Heckyl
News flow related to growth-oriented business activities touched the highest level in 2-1/2 years indicating improvement in the business confidence of Indian companies, according to a study conducted by Heckyl, a leading Fintech engaged in news and financial data analytics.
Heckyl has analyzed news data for all the listed companies in India for the past 2-1/2 years covering over 51,000 growth-oriented news items for 1,915 companies.
The first half of 2017 witnessed a year-on-year rise of 15.10% and 11.20% over second half of 2016 in news items featuring growth-oriented business activities. At the same time, the number of companies mentioned in the growth-oriented news items has also grown 24.3% on a y-o-y basis and 23.7% over preceding six months.
Were you able to pick up these activities in the cement sector during the last week?
Could these be opportunities for your Relationship Managers?
To help banks in identifying potential corporate borrowers, Heckyl has developed Business Intelligence (BI) module. Heckyl’s BI module, powered by news and sentiment analytics, identifies companies, who at some point in time, may require funds to finance their various business operations.
Any news update on business orders, new projects, expansion and growth plans, product launch, fund raising, joint venture, M&A, business transactions etc. is potential corporate lending opportunity for the banks.