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

Index Rebalance

<ul>
<li>There are 39 adds/34 deletes for the JPX Nikkei 400 Index to bring the number of index constituents back to 400. There are stocks with multiple days ADV to trade.</li>
<li>Based on the adds, deletes and capping changes, we estimate one way turnover of 6.7% and a round-trip trade of JPY 946bn (US$6.4bn).</li>
<li>The adds have outperformed the deletes over the last year and there has been a move higher in the last few days too.</li>
</ul>


There are 39 adds/34 deletes for the JPX Nikkei 400 Index to bring the number of index constituents back to 400. There are stocks with multiple days ADV to trade.
Based on the adds, deletes and capping changes, we estimate one way turnover of 6.7% and a round-trip trade of JPY 946bn (US$6.4bn).
The adds have outperformed the deletes over the last year and there has been a move higher in the last few days too.


JPX Nikkei 400 Index Rebalance: US$6.4bn Round-Trip Trade Coming Up

<ul>
<li>The drop in <a href="https://www.smartkarma.com/entities/dentsu-inc" target="_blank" data-smartkarma-citation="entities:12434:1" rel="noopener">Dentsu Inc (4324 JP)</a>'s stock price over the last few months could lead to the deletion of the stock from a global index in August.</li>
<li>
<a href="https://www.smartkarma.com/entities/dentsu-inc" target="_blank" data-smartkarma-citation="entities:12434:1" rel="noopener">Dentsu Inc (4324 JP)</a> has underperformed its peers over the last year and trades cheaper than the average of its Advertising peers.</li>
<li>There is positioning in <a href="https://www.smartkarma.com/entities/dentsu-inc" target="_blank" data-smartkarma-citation="entities:12434:1" rel="noopener">Dentsu Inc (4324 JP)</a>, though it is likely to be smaller than the estimated passive selling. A relative selloff could be used to enter the stock.</li>
</ul>


The drop in Dentsu Inc (4324 JP)'s stock price over the last few months could lead to the deletion of the stock from a global index in August.

Dentsu Inc (4324 JP) has underperformed its peers over the last year and trades cheaper than the average of its Advertising peers.
There is positioning in Dentsu Inc (4324 JP), though it is likely to be smaller than the estimated passive selling. A relative selloff could be used to enter the stock.


Dentsu Group (4324 JP): Global Index Deletion Likely

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/carta-holdings-inc" target="_blank" data-smartkarma-citation="entities:9634:1" rel="noopener">Carta Holdings, Inc. (3688 JP)</a> has recommended a preconditional tender offer from <a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (Nippon Telegraph &amp; Telephone) (9432 JP)</a> at JPY2,100, a 37.2% premium to the last close price.</li>
<li>The offer is preconditional on several regulatory approvals, expected to commence in late August, and aligns with the midpoint of the IFA DCF valuation range.</li>
<li>Due to irrevocables from the controlling shareholder and key management, the required minority tendering rate is 11.2%. This low rate points to a done deal. </li>
</ul>



Carta Holdings, Inc. (3688 JP) has recommended a preconditional tender offer from NTT (Nippon Telegraph &amp; Telephone) (9432 JP) at JPY2,100, a 37.2% premium to the last close price.
The offer is preconditional on several regulatory approvals, expected to commence in late August, and aligns with the midpoint of the IFA DCF valuation range.
Due to irrevocables from the controlling shareholder and key management, the required minority tendering rate is 11.2%. This low rate points to a done deal. 


Carta Holdings (3688 JP): NTT DoCoMo’s JPY2,100 Preconditional Tender Offer Is a Done Deal

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cyberagent-inc" target="_blank" data-smartkarma-citation="entities:8197:1" rel="noopener">CyberAgent Inc (4751 JP)</a> reported 1QFY09/2025 results today. 1Q revenues beat consensus but reported OP fell below consensus due to weak gaming margins.</li>
<li>The key highlight of the quarter was the strong results of the Media business whose revenues saw strong growth with strengthened profitability.</li>
<li>Though game earnings were slightly weak during 1Q, we would not be too worried as app analysis data reveals that the segment is off to a strong start in 2QFY09/2025.</li>
</ul>



CyberAgent Inc (4751 JP) reported 1QFY09/2025 results today. 1Q revenues beat consensus but reported OP fell below consensus due to weak gaming margins.
The key highlight of the quarter was the strong results of the Media business whose revenues saw strong growth with strengthened profitability.
Though game earnings were slightly weak during 1Q, we would not be too worried as app analysis data reveals that the segment is off to a strong start in 2QFY09/2025.


CyberAgent 1Q: Media Business Continues to Show Solid Growth

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shift-up-corp" target="_blank" data-smartkarma-citation="entities:36232:1" rel="noopener">Shift Up (462870 KS)</a> raised around US$320m in its South Korean IPO, after pricing at the top. Around US$1.2bn worth of shares will be released from their lockup soon.</li>
<li>Shift Up is a South Korean games developer, which as released three games so far for the global markets.</li>
<li>In this note, we will talk about the lockup dynamics and possible placement.</li>
</ul>



Shift Up (462870 KS) raised around US$320m in its South Korean IPO, after pricing at the top. Around US$1.2bn worth of shares will be released from their lockup soon.
Shift Up is a South Korean games developer, which as released three games so far for the global markets.
In this note, we will talk about the lockup dynamics and possible placement.


Shift Up IPO Lockup - US$1.2bn Lockup Release of Strategic, Employees and IPO Investors

Japan

CyberAgent, Inc. operates blog media website, Ameba.  The Company also operates internet advertising agency, foreign exchange trading website, and creates PC and mobile contents such as advertisements and games. CyberAgent invests in companies with internet related business.

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CyberAgent Inc (4751 JP)

JPX Nikkei 400 Index Rebalance: US$6.4bn Round-Trip Trade Coming Up

There are 39 adds/34 deletes for the JPX Nikkei 400 Index resulting in a one-way turnover of 6.7% and a round-trip trade of JPY 946bn (US$6.4bn)....

Brian Freitas

Dentsu Group (4324 JP): Global Index Deletion Likely

Dentsu has underperformed its peers this year and the stock could be deleted from a global index in August. Positioning appears to be smaller than...

Brian Freitas

Carta Holdings (3688 JP): NTT DoCoMo’s JPY2,100 Preconditional Tender Offer Is a Done Deal

Due to irrevocables from the controlling shareholder and key management, the required minority tendering rate is 11.2%. This low rate points to a...

Arun George

CyberAgent 1Q: Media Business Continues to Show Solid Growth

CA's 1Q revenues beat consensus but OP fell below. Key highlight was the stellar performance of the Media business. Though game earnings were...

Shifara Samsudeen, FCMA, CGMA

Shift Up IPO Lockup - US$1.2bn Lockup Release of Strategic, Employees and IPO Investors

Shift Up (462870 KS) raised around US$320m in its South Korean IPO, after pricing at the top. Around US$1.2bn worth of shares will be released from...

Sumeet Singh

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