Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The word floating around late Friday as books closed was that foreigners had bid strongly. More than the entire <a href="https://www.smartkarma.com/entities/japan-post-bank-co-ltd" target="_blank" data-smartkarma-citation="entities:838:1" rel="noopener">Japan Post Bank (7182 JP)</a> offering size in fact.</li>
<li>The offering is an interesting problem, as discussed before. Different people are going to buy it for different reasons. </li>
<li>This insight looks at the breakdown of ratios and the resultant foreign ownership, along with post-offer supply/demand balance.</li>
</ul>


The word floating around late Friday as books closed was that foreigners had bid strongly. More than the entire Japan Post Bank (7182 JP) offering size in fact.
The offering is an interesting problem, as discussed before. Different people are going to buy it for different reasons. 
This insight looks at the breakdown of ratios and the resultant foreign ownership, along with post-offer supply/demand balance.


Japan Post Bank - Estimating Foreign Ownership and Deal Flowback

David Blennerhassett

<ul>
<li>Japanese banks are the hottest new thing but unless you think <a href="https://www.smartkarma.com/entities/bank-of-kyoto" target="_blank" data-smartkarma-citation="entities:5248:1" rel="noopener">Bank of Kyoto</a> is going to change its spots, it's still best thought of as a range trade. </li>
<li>WM Motors opts for a backdoor listing via merging with <a href="https://www.smartkarma.com/entities/we-solutions-ltd" target="_blank" data-smartkarma-citation="entities:9818:1" rel="noopener">WE Solutions Limited (860 HK)</a>. There's probably a good reason for doing so.</li>
<li>You pay for the liquidity of Japanese banks by paying a higher PBR against not as much improvement in ROE. That's life.</li>
</ul>


Japanese banks are the hottest new thing but unless you think Bank of Kyoto is going to change its spots, it's still best thought of as a range trade. 
WM Motors opts for a backdoor listing via merging with WE Solutions Limited (860 HK). There's probably a good reason for doing so.
You pay for the liquidity of Japanese banks by paying a higher PBR against not as much improvement in ROE. That's life.


Last Week In SPACE: Bank of Kyoto, WM Motors, Japanese Banks, Hong Kong Aerospace, CP ALL/MAKRO

<ul>
<li>Japanese Banks have had a good run recently. From the day before the BOJ changed the 10yr yield target in December in its YCC programme to today, +30% vs TOPIX.</li>
<li>The question is how that is spread out. There are lots of banks. Some are cheaper than others. Some are better than others. Can we draw conclusions to trade better?</li>
<li>If you are looking at Japanese Banks to play a change in BOJ policy when Governor Kuroda's term ends shortly, there are definitely conclusions one can draw. I offer comments.</li>
</ul>


Japanese Banks have had a good run recently. From the day before the BOJ changed the 10yr yield target in December in its YCC programme to today, +30% vs TOPIX.
The question is how that is spread out. There are lots of banks. Some are cheaper than others. Some are better than others. Can we draw conclusions to trade better?
If you are looking at Japanese Banks to play a change in BOJ policy when Governor Kuroda's term ends shortly, there are definitely conclusions one can draw. I offer comments.


Thinking About Japanese Banks - Go Big, Go Small, Go Insurance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bank-of-kyoto" target="_blank" data-smartkarma-citation="entities:5248:1" rel="noopener">Bank of Kyoto (8369 JP)</a> is a classic "deep value" trade. It has a low PBR, and... "Dude, it's equity portfolio alone is worth more than the whole bank."
</li>
<li>It has a larger market cap than most super-low PBR Japanese regional banks, is more liquid, and the narrative is quite easy to tell. </li>
<li>Japanese Banks are the hottest new thing but unless you think This Particular Leopard is going to change its spots, it is still best thought of as a range trade. </li>
</ul>



Bank of Kyoto (8369 JP) is a classic "deep value" trade. It has a low PBR, and... "Dude, it's equity portfolio alone is worth more than the whole bank."

It has a larger market cap than most super-low PBR Japanese regional banks, is more liquid, and the narrative is quite easy to tell. 
Japanese Banks are the hottest new thing but unless you think This Particular Leopard is going to change its spots, it is still best thought of as a range trade. 


Bank of Kyoto (8369) - Not a Normal Regional Bank

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener">PCCW Ltd (8 HK)</a> is coming up "cheap" on my monitor, both from a discount to NAV and implied stub angle. </li>
<li>Preceding my comments PCCW / <a href="https://www.smartkarma.com/entities/hkt-ltd" target="_blank" data-smartkarma-citation="entities:874:1" rel="noopener">HKT Ltd (6823 HK)</a> and <a href="https://www.smartkarma.com/entities/bank-of-kyoto" target="_blank" data-smartkarma-citation="entities:5248:1" rel="noopener">Bank of Kyoto (8369 JP)</a> are the current setup/unwind tables for Asia-Pacific Holdcos. </li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>



PCCW Ltd (8 HK) is coming up "cheap" on my monitor, both from a discount to NAV and implied stub angle. 
Preceding my comments PCCW / HKT Ltd (6823 HK) and Bank of Kyoto (8369 JP) are the current setup/unwind tables for Asia-Pacific Holdcos. 
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


Japan

The Bank of Kyoto, Ltd. is a regional bank in Kyoto.  The Bank provides banking services including deposits, savings, loans, foreign exchange transactions, and securities investments.  The Bank of Kyoto also provides financial services such as letter of credit, leasing, loans, and credit cards.

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Bank of Kyoto (8369 JP)

Japan Post Bank - Estimating Foreign Ownership and Deal Flowback

I expect the JPB deal will price after the close on Monday. Determinants as to success in aftermarket will be foreign active demand (incl...

Travis Lundy

Last Week In SPACE: Bank of Kyoto, WM Motors, Japanese Banks, Hong Kong Aerospace, CP ALL/MAKRO

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Thinking About Japanese Banks - Go Big, Go Small, Go Insurance

The BOJ is set for a change in policy shortly. It could come before Kuroda-san leaves, or after, and we don't yet know whether Kishida-san will go...

Travis Lundy

Bank of Kyoto (8369) - Not a Normal Regional Bank

Bank of Kyoto is a large-ish cap regional bank well-known because its famous-name equity portfolio is larger than its market cap. But it isn't...

Travis Lundy

StubWorld: PCCW Coming Up "Cheap"

I would still be invested where Richard Li is - and therefore be Long PCCW, short HKT here. I expect the NAV discount to narrow towards its one...

David Blennerhassett

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