Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>NKY225 rebalance decision was made yesterday: Ryohin Keikaku and NRI replaced Nippon Paper and DIC. A focus on sector balance should continue to be positive for future consumer goods candidates.</li>
<li>With US markets stabilizing there are several names with strong fundamental drivers which look attractive as buy the dip candidates after yesterdays heavy selling.</li>
<li>US job opening data below street estimates increases likelihood that Fed will start with a 50 bps cut this month. Should help the likes of Shin Etsu and Sumitomo Forestry.</li>
</ul>


NKY225 rebalance decision was made yesterday: Ryohin Keikaku and NRI replaced Nippon Paper and DIC. A focus on sector balance should continue to be positive for future consumer goods candidates.
With US markets stabilizing there are several names with strong fundamental drivers which look attractive as buy the dip candidates after yesterdays heavy selling.
US job opening data below street estimates increases likelihood that Fed will start with a 50 bps cut this month. Should help the likes of Shin Etsu and Sumitomo Forestry.


Tokyo Morning Connection: NKY225 Rebalance Decision, Likely Dip Buying After Yesterdays Rout

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Today, the Nikkei Index Committee decided to delete Nippon Paper (3863) for low liquidity, and DIC (4631) for sector over-representation, and added Nomura Research Institute (4307) and Ryohin Keikaku (7453).</li>
<li>The only <em>auto-delete</em> was Nippon Paper. The DIC delete was "discretionary." But they could have done a third. Why did they not do a third change? I do not know.</li>
<li>The whole shebang should be ¥350-375bn a side. At current price, Fast Retailing is set for another capping (selling) event in March 2025. And there is one shoo-in then too.</li>
</ul>


Today, the Nikkei Index Committee decided to delete Nippon Paper (3863) for low liquidity, and DIC (4631) for sector over-representation, and added Nomura Research Institute (4307) and Ryohin Keikaku (7453).
The only auto-delete was Nippon Paper. The DIC delete was "discretionary." But they could have done a third. Why did they not do a third change? I do not know.
The whole shebang should be ¥350-375bn a side. At current price, Fast Retailing is set for another capping (selling) event in March 2025. And there is one shoo-in then too.


Sep24 Nikkei 225 Review Results:  A Slightly Baffling 2 IN, 2 OUT

<ul>
<li>Echoes of August with Japan looking to start the day very weak on the lead from US semi related.</li>
<li>Expect heavy selling for recent retail margin favourites e.g. Mercari, IHI, KHI and Socionext, and SPE winners such as Kokusai and Advantest, although the sector will start under heavy pressure.</li>
<li>Nothing from Nikkei Inc. yet on their NKY225 rebalance decision, but expect outsized volatility today with many multi-strategy pods shuttered during the August sell off.</li>
</ul>


Echoes of August with Japan looking to start the day very weak on the lead from US semi related.
Expect heavy selling for recent retail margin favourites e.g. Mercari, IHI, KHI and Socionext, and SPE winners such as Kokusai and Advantest, although the sector will start under heavy pressure.
Nothing from Nikkei Inc. yet on their NKY225 rebalance decision, but expect outsized volatility today with many multi-strategy pods shuttered during the August sell off.


Japan Morning Connection: Expect Volatility with Retail and SPE Stocks Under Pressure

<ul>
<li>The last two reviews have been announced on the second business day of the month of the review. The one before that on the third business day.</li>
<li>The review could be announced today or tomorrow. Wednesday would seem to be "late."</li>
<li>There are still questions about implementation - thus "care" in previous insights. Here I explore the possibilities/probabilities/issues around the edges. And a Dark Horse which may be lighter than thought.</li>
</ul>


The last two reviews have been announced on the second business day of the month of the review. The one before that on the third business day.
The review could be announced today or tomorrow. Wednesday would seem to be "late."
There are still questions about implementation - thus "care" in previous insights. Here I explore the possibilities/probabilities/issues around the edges. And a Dark Horse which may be lighter than thought.


Sep24 Nikkei 225 Rebal - Last Minute Thoughts and Change in Predictions

<ul>
<li>News Intel may be looking to restructure and even sell its fab business, a slight negative for Japanese SPE suppliers.</li>
<li>Japan upping defence budget to a record high a positive for related names, including KHI which has been excessively weak on the news it fabricated data for marine engine business.</li>
<li>Nikkei Inc. is expected to announce results for 30th September rebalance today or tomorrow which may see big buying for the likes of Ryohin Keikaku, NRI and possibly one other.</li>
</ul>


News Intel may be looking to restructure and even sell its fab business, a slight negative for Japanese SPE suppliers.
Japan upping defence budget to a record high a positive for related names, including KHI which has been excessively weak on the news it fabricated data for marine engine business.
Nikkei Inc. is expected to announce results for 30th September rebalance today or tomorrow which may see big buying for the likes of Ryohin Keikaku, NRI and possibly one other.


Japan Morning Connection: Record Defense Budget and Nikkei Rebalance Set to Boost Related Stocks

Japan

DIC Corp. is a chemical company that specializes in printing inks, organic pigments, and thermosetting resins.  The Company also manufactures polymers, specialty plastics and compounds, and others which include building materials, pressure-sensitive adhesives materials, and biochemicals.

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Dic Corp (4631 JP)

Tokyo Morning Connection: NKY225 Rebalance Decision, Likely Dip Buying After Yesterdays Rout

A focus on sector balance continues to be positive for consumer goods candidates. US markets stabilizing with strong buy the dip candidates. Fed...

Andrew Jackson

Sep24 Nikkei 225 Review Results: A Slightly Baffling 2 IN, 2 OUT

The Nikkei 225 Sep24 Review is out. Ryohin Keikaku/NRI in, Nippon Paper/DIC out. Fast Retailing capped. Much as expected. Except why 2 changes, not...

Travis Lundy

Japan Morning Connection: Expect Volatility with Retail and SPE Stocks Under Pressure

Japan's market set to open weak following US semi-related lead, heavy selling expected for retail margin favorites and SPE winners, potential...

Andrew Jackson

Sep24 Nikkei 225 Rebal - Last Minute Thoughts and Change in Predictions

The September Nikkei 225 rebalance is likely to be announced either today, tomorrow, or Thursday. I have adjusted my picks to go for 3 x 3. If I...

Travis Lundy

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Tokyo Morning Connection: NKY225 Rebalance Decision, Likely Dip Buying After Yesterdays Rout

A focus on sector balance continues to be positive for consumer goods candidates. US markets stabilizing with strong buy the dip candidates. Fed...

Andrew Jackson

Sep24 Nikkei 225 Review Results: A Slightly Baffling 2 IN, 2 OUT

The Nikkei 225 Sep24 Review is out. Ryohin Keikaku/NRI in, Nippon Paper/DIC out. Fast Retailing capped. Much as expected. Except why 2 changes, not...

Travis Lundy

Japan Morning Connection: Expect Volatility with Retail and SPE Stocks Under Pressure

​Japan's market set to open weak following US semi-related lead, heavy selling expected for retail margin favorites and SPE winners, potential...

Andrew Jackson

Sep24 Nikkei 225 Rebal - Last Minute Thoughts and Change in Predictions

The September Nikkei 225 rebalance is likely to be announced either today, tomorrow, or Thursday. I have adjusted my picks to go for 3 x 3. If I...

Travis Lundy

Japan Morning Connection: Record Defense Budget and Nikkei Rebalance Set to Boost Related Stocks

​News Intel may restructure/sell fab business, negative for Japanese SPE suppliers. Japan defense budget increase positive for related names....

Andrew Jackson

Japan's market set to open weak following US semi-related lead, heavy selling expected for retail margin favorites and SPE winners, potential...

News Intel may restructure/sell fab business, negative for Japanese SPE suppliers. Japan defense budget increase positive for related names....