Technidex Developing, devising & designing highly specialized solutions… October 2012
Technidex Our approach is analytical. We develop, devise & design highly specialized solutions – indexes, automated statistical analysis & investment / trading strategies – using proprietary computer models. Technidex P r i v a t e & C o n f i d e n t i a l | P a g e 2
About Us • Technidex , promoted by Navin Agrawal, develops stock market indexes, structures investment / trading strategies, designs automated & real-time market analytic models (which can be used on different assets – equities, derivative instruments, commodities & currencies) and writes specialized statistical analytic reports. • Our approach is analytical, using proprietary computer models to develop highly specialized solutions. Our success comes from our long experience and nearly two decades of innovation & entrepreneurship, combined with our network of senior-level relationships at some of the largest public & private sector institutions, funds, insurance companies & banks. • • Technidex will be advising institutional investors, corporate & HNI investors, traders & arbitrageurs and focusing on designing instruments to outperform the market. FIIs, Hedge Funds, DIIs, Mutual Funds, Insurance Companies & Banks analyze markets differently and their research needs differ from each others. With Fundamental & Technical reports easily available in abundance, the need is for research & analysis with a difference. Technidex P r i v a t e & C o n f i d e n t i a l | P a g e 3
About Us - Ownership N AVIN A GRAWAL | F OUNDER & CEO | M UMBAI , I NDIA Navin has 18 years of capital markets experience as a trader, a strategist, an investment manager (specializing in low risk equity strategies and hedging using derivatives) and Head of Institutional Equities business. Navin started his career as an equities trader in 1994 with Skindia Finance, one of India’s premier special situations brokerage and investment banking firms, where he advised a major UK-based hedge fund. He was a key member of the team that developed the globally quoted Skindia GDR Index and pioneered GDR Arbitrage & Reverse Arbitrage (Dual Fungibility) in Indian Depository Receipts. He went on to set up the Institutional Brokerage Desk & Research team as Head of Institutional Equities at IDBI Capital & SMC Global Securities. He was also a key member of the Investment Banking team. At Instanex, a leading, India-focused investment, advisory and risk-management firm, Navin played an At Instanex, a leading, India-focused investment, advisory and risk-management firm, Navin played an important role in the restructuring Instanex Capital Inc., USA owned Ownership Indexes in May 2012 and also designed Alpha & Market Neutral Strategies. Navin graduated from H. R. College of Commerce, Mumbai University, in 1994. He lives in Mumbai with his wife and daughter. Technidex P r i v a t e & C o n f i d e n t i a l | P a g e 4
What We Do Indexes Technidex Stock Futures Indexes are the first indexes to be truly representing the futures segment, based on the futures’ open interest and not on the market cap. Contrary to the standard practice of the index future being based on the underlying, our underlying index is based on the weights in futures’ index. Technidex Stock Futures Indexes are an ideal bench-mark for tradable exposure to Indian stock futures & their underlying stocks. Automated Analysis Technidex believes that changes in the fundamentals will be visible through technical analysis. Our automated computer models provide a very specialized type of technical analysis – performing real-time Statistical Analysis on all relevant market data and alert us when the fundamentals change in the form of swings in share prices & volumes. The models have been successfully back- tested for over 10 years, through several bull & bear phases. Investment / Trading Strategies Technidex will focus on specialized analysis to design Trading & Investment Strategies while neutralizing the general risks associated with stock market investing. Strategies & portfolios will be created based on specialized research and outputs from our automated computer models and will be backed with reasonable amount of back-testing. Technidex P r i v a t e & C o n f i d e n t i a l | P a g e 5
Index Futures Index futures in the derivatives segment are based on their underlying index which is normally designed based on the adjusted free-float market cap method. Hence, the index futures are actually representing the adjusted free-float equity market cap while incorporating the prevailing Cost of Carry. Underlying Index Current month Index Future Underlying Cost of Carry Cost of Carry Index Index They do not actually represent the futures (derivative) segment. Very often, the trading / positional activity & interest is in stocks which are not part of the underlying index, hence, their activities don’t get reflected in the index future. Technidex P r i v a t e & C o n f i d e n t i a l | P a g e 6
What We Do: Indexes Technidex will focus on developing stock market indexes using documented (proprietary) Index Construction & Computation Methodology and analyze the markets • Technidex Stock Futures Indexes are the first indexes to be truly representing the futures segment, based on the futures’ open interest and not on the market cap. Contrary to the standard practice of the index future being based on the underlying, our underlying index is based on the weights in futures’ index; • With a base of 1000 on January 2, 2006, Technidex Stock Futures Indexes have adequate historical data and are an ideal bench-mark for tradable exposure to Indian stock futures & their underlying stocks; • Technidex Stock Futures Indexes take into account the price movement of not only the current month future but all active futures (current, near & far month contracts) of the current month future but all active futures (current, near & far month contracts) of the index components, their underlying stocks and simultaneously compute the prevailing Cost of Carry & Delivery % of the Index; • The components of Technidex Indexes are highly representative of activity in stock futures & their underlying shares having a broad sector representation with large, mid & small cap stocks and having high liquidity in both, futures & equity; Technidex P r i v a t e & C o n f i d e n t i a l | P a g e 7
Technidex Stock Futures Indexes • Technidex Stock Futures Index is an indicator representing the price movement of the entire universe of active stock futures listed for trading, on a major stock exchange in India, across all expiry dates; • Technidex Underlying Stock Index simultaneously tracks the price movement of the underlying stocks of the index constituents. Thus making simultaneous analysis of futures & underlying prices more meaningful; • Technidex Cost of Carry (CoC) Indicator is a continuous price line to track the prevailing premium / discount of stock futures across all expiries. Our CoC calculation methodology eliminates abnormal spikes in CoC close to expiry days; • Technidex Delivery Indicator tracks the delivery% in the underlying stocks. It indirectly influences the prevailing premium / discount and Cost of Carry. It also indicates the strength / weakness in the overall market; Technidex P r i v a t e & C o n f i d e n t i a l | P a g e 8
Technidex Stock Futures Indexes Technidex P r i v a t e & C o n f i d e n t i a l | P a g e 9
Technidex Cost of Carry & Delivery Indicators Technidex P r i v a t e & C o n f i d e n t i a l | P a g e 1 0
Our Daily Report: Technidex Indexes Update Technidex P r i v a t e & C o n f i d e n t i a l | P a g e 1 1
I told you to SELL… See, market has gone down… I need an alternate solution…. An analysis which is automated, real- time, is unbiased and has been Technidex successfully back-tested over long periods… Technidex P r i v a t e & C o n f i d e n t i a l | P a g e 1 2
What We Do: Automated Analysis • Technidex believes that changes in the fundamentals will be visible through technical analysis. Our automated computer models provide a very specialized type of technical analysis. Our automated computer models provide a very specialized type of technical analysis – performing real-time Statistical Analysis on all relevant market data and alert us when the fundamentals change in the form of swings in share prices & volumes. The models have been successfully back-tested for over 10 years, through several bull & bear phases. • Back-testing lets you test pre-built trading strategies under historical market conditions to determine whether certain scenarios would have worked well in the past. The idea is that if a trading strategy would have performed well previously, it may be worth considering today. Our proprietary computer model has been successfully put through rigorous back-testing over long periods to test the success of the system and its analysis at different periods and in different market conditions. Technidex P r i v a t e & C o n f i d e n t i a l | P a g e 1 3
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