Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Apparently Elliott is requesting <a href="https://www.smartkarma.com/entities/mitsui-fudosan-co-ltd" target="_blank" data-smartkarma-citation="entities:565:1" rel="noopener">Mitsui Fudosan (8801 JP)</a> conduct a very large buyback and to sell down its stake in <a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661 JP)</a>.</li>
<li>Some 17 months after the Cheng Family failed to secure 50%+ of <a href="https://www.smartkarma.com/entities/giordano-international-ltd" target="_blank" data-smartkarma-citation="entities:13899:1" rel="noopener">Giordano International (709 HK)</a>, the family are now calling an SGM to install friendly directors.</li>
<li>The<a href="https://www.smartkarma.com/entities/lawson-inc" target="_blank" data-smartkarma-citation="entities:1040:1" rel="noopener">Lawson (2651 JP)</a> deal is not terribly surprising. It's not terribly surprising that it is being done cheaply. It IS being done too cheaply. This is bumpable by force. </li>
</ul>


Apparently Elliott is requesting Mitsui Fudosan (8801 JP) conduct a very large buyback and to sell down its stake in Oriental Land (4661 JP).
Some 17 months after the Cheng Family failed to secure 50%+ of Giordano International (709 HK), the family are now calling an SGM to install friendly directors.
TheLawson (2651 JP) deal is not terribly surprising. It's not terribly surprising that it is being done cheaply. It IS being done too cheaply. This is bumpable by force. 


Last Week in Event SPACE: Mitsui Fudosan/Oriental Land, Giordano, JSR, Pasona, Lawson, L'Occitane

Travis Lundy

<ul>
<li>Today, <a href="https://www.smartkarma.com/entities/dai-ichi-life-insurance" target="_blank" data-smartkarma-citation="entities:1109:1" rel="noopener">Dai Ichi Life Insurance (8750 JP)</a> announced a TOB for <a href="https://www.smartkarma.com/entities/benefit-one-inc" target="_blank" data-smartkarma-citation="entities:14502:1" rel="noopener">Benefit One Inc (2412 JP)</a> having agreed a deal with <a href="https://www.smartkarma.com/entities/pasona-group-inc" target="_blank" data-smartkarma-citation="entities:15778:1" rel="noopener">Pasona Group (2168 JP)</a> to sell into a buyback.</li>
<li>Pasona will get ¥1,526/share, and having agreed, it <a href="https://www.pasonagroup.co.jp/LinkClick.aspx?fileticket=o93EYocia9U%3d&amp;tabid=100&amp;mid=460" target="_blank" rel="noopener">announced</a> the expected special profit to be booked in the FY to 31 May 2024.</li>
<li>At ¥113.6bn on a consolidated basis (¥122.3bn on parent), less ¥1.165bn of associated costs, that's ¥112.4bn at the lower end. That's ¥2,870/share. Then there's the rest of the business.</li>
</ul>


Today, Dai Ichi Life Insurance (8750 JP) announced a TOB for Benefit One Inc (2412 JP) having agreed a deal with Pasona Group (2168 JP) to sell into a buyback.
Pasona will get ¥1,526/share, and having agreed, it announced the expected special profit to be booked in the FY to 31 May 2024.
At ¥113.6bn on a consolidated basis (¥122.3bn on parent), less ¥1.165bn of associated costs, that's ¥112.4bn at the lower end. That's ¥2,870/share. Then there's the rest of the business.


Pasona (2168) - Less Wrong Than Before But How Wrong Still Depends on Nambu-San

<ul>
<li>A double dose of StubWorld this week as <a href="https://www.smartkarma.com/entities/pasona-group-inc" target="_blank" data-smartkarma-citation="entities:15778:1" rel="noopener">Pasona Group (2168 JP)</a> finally takes the hint to sell (if not exit altogether) its holding in <a href="https://www.smartkarma.com/entities/benefit-one-inc" target="_blank" data-smartkarma-citation="entities:14502:1" rel="noopener">Benefit One Inc (2412 JP)</a>.</li>
<li>Preceding my comments on Pasona/Benefit One 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>


A double dose of StubWorld this week as Pasona Group (2168 JP) finally takes the hint to sell (if not exit altogether) its holding in Benefit One Inc (2412 JP).
Preceding my comments on Pasona/Benefit One 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%.


Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

<ul>
<li>The Tokyo Stock Exchange (TSE) calculates Free-Float Weight (FFW) for each listed company and uses this value as a key component of TOPIX Index Calculation. </li>
<li>For companies with "low liquidity" the FFW will be multiplied by a fixed liquidity factor of 0.75 to derive the final FFW used for index calculation. </li>
<li>Every April, the application of this liquidity factor is reviewed by the TSE. In this insight, we take an early look at what could happen in April 2023.</li>
</ul>


The Tokyo Stock Exchange (TSE) calculates Free-Float Weight (FFW) for each listed company and uses this value as a key component of TOPIX Index Calculation. 
For companies with "low liquidity" the FFW will be multiplied by a fixed liquidity factor of 0.75 to derive the final FFW used for index calculation. 
Every April, the application of this liquidity factor is reviewed by the TSE. In this insight, we take an early look at what could happen in April 2023.


TOPIX Index Upweights: An Early Preview Of "The Big April Basket" 2023

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

NTT (Nippon Telegraph & Telephone) / Event-Driven

NTT (Nippon Telegraph & Telephone) (9432 JP)

<ul>
<li>On 7 April, the JPX announced the changes to the Free Float Weights (FFW) for the TOPIX Index. There are some big changes due to the updated FFW methodology.</li>
<li>From April to June, we see a one-way turnover of 2.87% and a one-way trade of ¥2,285bn. Some stocks have opposite way flows in different months.</li>
<li>Stocks with inflows outperformed stocks with outflows from Oct-Dec 2021 before giving up all the gains. These stocks have started to outperform and could continue outperforming over the next quarter.</li>
</ul>


On 7 April, the JPX announced the changes to the Free Float Weights (FFW) for the TOPIX Index. There are some big changes due to the updated FFW methodology.
From April to June, we see a one-way turnover of 2.87% and a one-way trade of ¥2,285bn. Some stocks have opposite way flows in different months.
Stocks with inflows outperformed stocks with outflows from Oct-Dec 2021 before giving up all the gains. These stocks have started to outperform and could continue outperforming over the next quarter.


TOPIX FFW Transition - Big Flows from April to June

Japan

Bewith,Inc. provides contact center and and business process outsourcing (BPO) services. The Company also offers various artificial intelligence, digital transformation solutions, application and platform, and related consulting services. Bewith conducts businesses in Japan.

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Bewith (9216 JP)

Last Week in Event SPACE: Mitsui Fudosan/Oriental Land, Giordano, JSR, Pasona, Lawson, L'Occitane

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

Pasona (2168) - Less Wrong Than Before But How Wrong Still Depends on Nambu-San

Pasona will get its bundle of cash selling Benefit One. That will leave ~¥135bn of net cash against a ¥60bn match-off of prepays vs A/R vs a ¥107bn...

Travis Lundy

StubWorld: Pasona's Expanding Cash Pile

What does Pasona do with the extra cash from the sale? Even without a special dividend, and the question mark over where the proceeds would be...

David Blennerhassett

TOPIX Index Upweights: An Early Preview Of "The Big April Basket" 2023

Daiei Kankyo, Socionext, Sun* , Mercari, Loadstar Capital, Bewith, Medley, and Appier Group are our high-conviction names that could see their...

Janaghan Jeyakumar, CFA

TOPIX FFW Transition - Big Flows from April to June

Changes to the Topix FFW methodology will result in a turnover of 2.87% & trade of ¥2,285bn from April to June. There is a lot to trade on some...

Brian Freitas

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