Asia Ex-Japan Funds: Extreme stocks
In this report, Steven Holden screens for stocks at the extreme ends of their positioning or momentum ranges. He synthesizes current and historical data on fund positioning with recent manager activity to accurately assess sentiment for each stock. Stocks in focus this month: High Positioning, Positive Momentum: KE Holdings and Shriram Finance. High Positioning, Negative Momentum: Axis Bank and NARI Technology. Low Positioning, Negative Momentum: Baidu and BOC Hong Kong. Low Positioning, Positive Momentum: Hon Hai Precision Industry and Tenaga Nasional.
Edition: 198
- 01 November, 2024
The narrowing divide between China and India’s weight in the MSCI Indices
The spread between India and China weights in active Asia Ex-Japan funds has narrowed to the lowest levels in Copley’s 13-year history and now stands at 16.17% vs. a peak of 45.3% in Aug 20. China’s decline over this period has been dominated by Consumer Discretionary, Communication Services and Financials. 3 companies standout as key drivers of the move lower: Alibaba, Tencent and Ping An Insurance. Increases in fund weight have been minimal with PDD, BYD and Trip.com seeing moderate upticks. India’s rise has been driven by the Financials sector. Specifically, 3 banks: ICICI Bank, HDFC Bank and Axis Bank.
Edition: 180
- 23 February, 2024
Axis Bank (AXSB IN) India
Financials
Hemindra Hazari finds major contradictions in the bank’s public commentary in contrast to the facts in the public domain - Axis Bank has previously commented on how it aspires to be No.1 in terms of customer satisfaction while withholding the information to stakeholders that it was the private sector market leader in customer complaints in FY22 (the RBI will release FY23 data later). Furthermore, its FY23 commentary highlights the importance of employees, but fails to discuss why attrition has been consistently rising in the last 3 years (it was 34.8% last year). With record customer complaints and such a high churn in staff, Hemindra believes the bank’s entire retail strategy maybe in peril.
Edition: 164
- 07 July, 2023
Axis Bank (AXSB IN) India
Financials
Citi’s well-off retail clients may not travel meekly to Axis Bank - while its acquisition of Citibank India’s consumer finance division has been applauded by the stock market, shareholders should consider that Citi’s retail customers are used to superior service standards from a robust technology platform and a dedicated and well-paid staff. Unfortunately, Axis Bank’s technology systems are less reliable, and a toxic work culture has impacted staff morale and customer service. Meanwhile, competitors have already chalked out strategies to poach Citi’s premium customers.
Edition: 134
- 29 April, 2022
Axis Bank (AXSB IN) India
Financials
Toxic workplace - new employees take one look and run. Hemindra Hazari reveals that new hire attrition at the bank exceeds 25%! This appears to be a symptom of a toxic work culture at the bank, where employees are evidently under intense pressure to meet targets or are incompatible for their roles. Most analysts covering the financial sector tend to ignore non-financial data, but since labour is a key competitive strength in the banking and service industry, high levels of attrition can have a bearing on performance. Indeed, Axis Bank’s financial performance in 2QFY22 has already thrown up red flags.
Edition: 126
- 07 January, 2022
Indian Banks: Screening for Investment Ideas
Financials
Galliano's Financials Research
Victor Galliano identifies 3 banks that can weather the expected worsening of credit quality in the coming quarters - he highlights Axis Bank as a restructuring and earnings recovery story and HDFC Bank for its high quality balance sheet and premium returns, which are not yet fully reflected in valuations. Victor also considers State Bank of India as an attractive value play, despite its lighter core capital ratio. Banks to avoid - Canara Bank (value trap) and Bandhan Bank (large micro-finance and SME credit risk exposure).
Edition: 119
- 17 September, 2021