Home

Share pledging in China: Industrials sector at a greater risk

Posted on Updated on

The concerns over excessive pledged shares continue to haunt the stock market in China for quite some time. On October 23, the Shanghai Composite index lost 2.26 percent as investors remained pessimistic about risks posed by shares pledged for loans.

Heckyl’s analysis of pledged shares data showed the pledged shareholding for 1,836 (52.7%) out of 3,485 Chinese companies was higher than 10% as on October 19 (Image 1). For 148 companies, the pledged shareholding was greater than 50% based on the latest data at CSDC.

China Pledged Shares 1
[Image 1: Breakup of the number of companies by pledged shares holding]

The 5 most stressed sectors (having a maximum number of companies with pledged shares greater than 10% of shareholding) were Industrials, Technology Hardware & Equipment, Materials, Pharmaceuticals, and Chemicals.

China Pledged Shares 2
[Image 2: Sector-wise breakup of the number of companies by pledged shares holding]

Here, we have highlighted 5 companies with a significant pledged shareholding:

Shanghai Raas Blood Products Co Ltd (71.3%)
Wheelock and Co Ltd (64.1%)
Giant Network Group Co Ltd (61.9%)
Zhejiang Century Huatong Group Co Ltd (61.1%)
China Grand Automotive Services Co Ltd (55.9%)

In our view, substantial pledging of shares by the promoters is a potential red-flag as it is an indication of the stress that has piled up on corporate finances. Moreover, a significant drop in the company’s share price may result in the invocation of pledged shares. This may also lead to loss of management control for the promoters.

Heckyl’s FiND Credit Risk EWS captures company-related red-flags based on a variety of business rules. Our intelligent EWS application can help lenders to get an early warning about the deterioration in corporate borrowers’ financial profile ahead of time.

To know more about FiND Credit Risk EWS, email us at info@heckyl.com

FiND Sentiment Indicator turns bearish 4-days prior to DJIA crash on October 10

Posted on Updated on

The Dow Jones Industrial Average (DJIA) index witnessed a significant fall in the past week amid concerns over a surge in bond yields and trade war between the US and China. In our view, news sentiment based strategy can help investors to predict an impending movement in the market.

Heckyl has developed FiND Sentiment Indicator which reflects the underlying sentiment of news coverage on the companies within the index. The moving average strategy based on FiND Sentiment Indicator signals the potential impact of the news sentiment on the value of the underlying index.

For instance, FiND Sentiment Indicator turned bearish 4-days prior to the 832 points crash in the DJIA index on October 10 (Image 1). Our system analyzed 1,01,066 news items for 30 companies within the DJIA index for the past 6-months. Out the total, 74,780 news items were positive, while 26,286 news items were negative.
DJIA Sentiment - Signals
[Image 1: Bullish/ Bearish Signals defined by Sentiment Indicator Strategy vs. DJIA]
Read the rest of this entry »

Air India continues to lead news share of voice for 2nd quarter

Posted on Updated on

India’s national carrier Air India led the news share of voice (SoV) among major airlines for the second quarter in a row. On the other hand, the news SoV for Interglobe Aviation remained at the second position in the June 2018 quarter. Meanwhile, Jet Airways and SpiceJet’s news SoV for the quarter stood at third and fourth positions respectively.

Airlines Share of Voice
[Image 1: Top 4 airlines’ web news share of voice]
Read the rest of this entry »

How FiND could have helped Air Asia to zero in on HNR Trading

Posted on Updated on

Heckyl’s FiND offers a singular repository to carry out deeper levels of due diligence for compliance risk assessment. Our unique alternative data platform allows screening of KMPs, Directors, Companies, and Institutions from compliance perspective by performing a check against:  

Due Diligence - Alerts

Recently, the Central Bureau of Investigation (CBI) summoned AirAsia India head R Venkataramanan to join ongoing probe on July 3 over AirAsia money laundering case. The Enforcement Directorate (ED) is also probing an alleged violation of the Foreign Exchange Management Act involving Air Asia, which is related to the transactions of over Rs. 12 crore with Singapore-based HNR Trading Pte Ltd.

Earlier, the CBI has also named HNR Trading and its director Rajendra Dubey in the Air Asia case as alleged lobbyists who used their influence to secure a permit for international scheduled air transport services. It is also being alleged that owner of the firm, Rajendra Dubey, had a suspected association with an international terrorist Hamid Reza Malakotipour. In June 2014, the US Department of Treasury added Malakotipour in OFAC list as a “Specially Designated Global Terrorist”.

Here, we present a use case of how FiND could have help Air Asia to perform due diligence on HNR Trading Pte Ltd in below.    Read the rest of this entry »

Sun Pharma’s positive news volume jumps in Q1 to highest level in past 4-quarters

Posted on Updated on

Sun Pharmaceutical Industries witnessed a significant improvement in the positive media coverage during the June 2018 quarter. Regulatory approvals and encouraging earnings led the positive news coverage for Sun Pharma in the June 2018 quarter.

At the same time, the volume of negative news has also dropped sharply in the same period. As a result, the long-term news sentiment has improved towards the end of the quarter.

Moreover, the improvement in news sentiment was also reflected in the recent rally in Sun Pharma’s stock price. Net-net, the news cycle was favorable for India’s leading drug maker in the June 2018 quarter.

Sun Pharma
[Compare screen: Sun Pharma – Share Price, News Volume, and Sentiment]

Read the rest of this entry »

Bharti Airtel gets more aggressive with new product launches: FiND media study

Posted on Updated on

Telecom operator Bharti Airtel has accelerated the pace of new product launches in the past 3-months to fight competition from rivals like Reliance Jio, Vodafone, and Idea.

FiND media coverage study showed that Bharti Airtel topped the product launch related news flow among major telecos consistently for the past 3-months. Moreover, the product launch related news updates from India’s largest telecom operator for the current quarter touched the highest level in the past 4-quarters.
Bharti
[Image 1: Monthly product launch news volume for the leading telecos]

Our analysis showed that Bharti Airtel has ramped up new product launches significantly following the launched of postpaid plan by Reliance Jio on May 10. India’s largest telecom operator has launched new prepaid plans; various data and unlimited calling offers; affordable 4G smartphones; and Apple Watch 3 LTE during the past month. As a result, Bharti Airtel’s product launch news volume touched a multi-year high in May 2018.
Bharti Daily
[Image 2: Daily product launch news volume for Bharti Airtel and Reliance Jio] Read the rest of this entry »

Does significant change in correlation between US and SG yields indicate an opportunity?

Posted on Updated on

The discovery and real-time monitoring of macroeconomic data are the two key gaps that the financial researchers face. To bridge this gap, Heckyl has introduced a unique Macroeconomic Data Analytics product.

Historically, Singapore and the US 10-year bond yields have witnessed strong positive correlation. However, the recent rally in US 10-year bond yield above 2.9% (given better-than-expected jobs data) has changed historical correlation with Singapore 10-year bond yield. In fact, this correlation has turned negative in the past 7 days.

US-Singapore 10-Yr Yield Correlation
(Correlation as on Jun. 6, 2018)

Given the mean-reverting nature of yields, does this signify an opportunity to trade in the fixed income market?

US-Singapore 10-Yr Yield

To know more about our Macroeconomic Data Analytics platform, email us at info@heckyl.com