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>The changes to the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> as part of the September rebalance should be announced in just over 2 weeks. We expect 2 changes at the review.</li>
<li>
<a href="https://www.smartkarma.com/entities/baycurrent-consulting-inc" target="_blank" data-smartkarma-citation="entities:25985:1" rel="noopener">BayCurrent Consulting</a>'s PAF will double, <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing</a>'s CPAF will stay the same, and Sony Financial Group will be deleted from the index following its spinoff from <a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony Corp (6758 JP)</a>. </li>
<li>
<a href="https://www.smartkarma.com/entities/sanrio-co-ltd" target="_blank" data-smartkarma-citation="entities:16476:1" rel="noopener">Sanrio (8136 JP)</a>'s improved liquidity increases the probability of index inclusion, and the stock could be added to the index at the next rebalance if it misses in September.</li>
</ul>


The changes to the Nikkei 225 (NKY INDEX) as part of the September rebalance should be announced in just over 2 weeks. We expect 2 changes at the review.

BayCurrent Consulting's PAF will double, Fast Retailing's CPAF will stay the same, and Sony Financial Group will be deleted from the index following its spinoff from Sony Corp (6758 JP). 

Sanrio (8136 JP)'s improved liquidity increases the probability of index inclusion, and the stock could be added to the index at the next rebalance if it misses in September.


Nikkei 225 Index Rebalance Sep25: Performance of Potential Adds/Deletes & Positioning

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>MBK Partners plans to launch a tender offer for Makino Milling Machine (6135 JP) at 11,751 yen per share by early December to take over the controlling ownership. </li>
<li>The key long-term investment case for Makino is that it is one of the best companies in the world for making advanced machine tools that are increasingly becoming more sophisticated.</li>
<li>One could make the argument that this may not the final offer and some investors may require slightly higher prices in order to make the deal final. </li>
</ul>


MBK Partners plans to launch a tender offer for Makino Milling Machine (6135 JP) at 11,751 yen per share by early December to take over the controlling ownership. 
The key long-term investment case for Makino is that it is one of the best companies in the world for making advanced machine tools that are increasingly becoming more sophisticated.
One could make the argument that this may not the final offer and some investors may require slightly higher prices in order to make the deal final. 


MBK Partners Plans to Launch a Tender Offer for Makino Milling Machine

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/makino-milling-machine-co" target="_blank" data-smartkarma-citation="entities:5200:1" rel="noopener">Makino Milling Machine Co (6135 JP)</a> announced a preconditional tender offer from MBK Partners at JPY11,751, a 4.8% premium to last close and a 6.8% premium to Nidec’s withdrawn JPY11,000 offer.</li>
<li>The offer is broadly in line with the midpoint of the IFA DCF valuation range. The tender offer is expected to commence in early December.</li>
<li>Despite the offer resulting from an auction, there remains a medium probability that <a href="https://www.smartkarma.com/entities/nidec-corp" target="_blank" data-smartkarma-citation="entities:7245:1" rel="noopener">Nidec Corp (6594 JP)</a> or a spurned white knight bidder (Candidate A) emerges with a higher offer.</li>
</ul>



Makino Milling Machine Co (6135 JP) announced a preconditional tender offer from MBK Partners at JPY11,751, a 4.8% premium to last close and a 6.8% premium to Nidec’s withdrawn JPY11,000 offer.
The offer is broadly in line with the midpoint of the IFA DCF valuation range. The tender offer is expected to commence in early December.
Despite the offer resulting from an auction, there remains a medium probability that Nidec Corp (6594 JP) or a spurned white knight bidder (Candidate A) emerges with a higher offer.


Makino Milling Machine (6135 JP): MBK’s Preconditional Offer Is Not the Likely Endgame

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.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dn-solutions" target="_blank" data-smartkarma-citation="entities:44474:1" rel="noopener">DN Solutions (298440 KS)</a> (DNS) aims to raise around US$1.1bn in its Korea IPO via selling a mix of primary and secondary shares.</li>
<li>DNS is engaged in the manufacture and sale of machine tools and the business of automation solutions and services related thereto.</li>
<li>In our previous note, we looked at the company’s past performance and valuations. In this note, we talk about the updates since then.</li>
</ul>



DN Solutions (298440 KS) (DNS) aims to raise around US$1.1bn in its Korea IPO via selling a mix of primary and secondary shares.
DNS is engaged in the manufacture and sale of machine tools and the business of automation solutions and services related thereto.
In our previous note, we looked at the company’s past performance and valuations. In this note, we talk about the updates since then.


DN Solutions IPO - Tariffs, Peer Correction Don’t Help

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nidec-corp" target="_blank" data-smartkarma-citation="entities:7245:1" rel="noopener">Nidec Corp (6594 JP)</a> has launched its offer for <a href="https://www.smartkarma.com/entities/makino-milling-machine-co" target="_blank" data-smartkarma-citation="entities:5200:1" rel="noopener">Makino Milling Machine Co (6135 JP)</a> at an unchanged JPY11,000. The offer is open from 4 April to 21 May.</li>
<li>The offer was launched despite securing all regulatory approvals and the Board's postponement request. The launch could also be an attempt to thwart a competing proposal.</li>
<li>Despite the launch, Nidec’s offer at current terms has a low chance of success, necessitating revised terms. There remains a medium-to-high probability of a competing proposal.</li>
</ul>



Nidec Corp (6594 JP) has launched its offer for Makino Milling Machine Co (6135 JP) at an unchanged JPY11,000. The offer is open from 4 April to 21 May.
The offer was launched despite securing all regulatory approvals and the Board's postponement request. The launch could also be an attempt to thwart a competing proposal.
Despite the launch, Nidec’s offer at current terms has a low chance of success, necessitating revised terms. There remains a medium-to-high probability of a competing proposal.


Makino Milling Machine (6135 JP): Nidec Launches Its Offer

Japan

DMG MORI CO., LTD. manufactures and markets machine tools and related products. The Company's product line includes numerical control (NC) and high-speed precision lathes, horizontal and vertical machining centers (MCs), and other stationary machine tools capable of performing various tasks.

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Dmg Mori Co Ltd (6141 JP)

Nikkei 225 Index Rebalance Sep25: Performance of Potential Adds/Deletes & Positioning

A week or so to go for the announcement of changes to the NKY in September. The forecast adds have dropped a bit over the last week and there will...

Brian Freitas

MBK Partners Plans to Launch a Tender Offer for Makino Milling Machine

The key long-term investment case for Makino is that it is one of the best companies in the world for making advanced machine tools that are...

Douglas Kim

Makino Milling Machine (6135 JP): MBK’s Preconditional Offer Is Not the Likely Endgame

Despite the offer resulting from an auction, there remains a medium probability that Nidec or a spurned white knight bidder (Candidate A) emerges...

Arun George

DN Solutions IPO - Tariffs, Peer Correction Don’t Help

DN Solutions (298440 KS) aims to raise around US$1.1bn in its Korea IPO via selling a mix of primary and secondary shares. In this note, we talk...

Sumeet Singh

Makino Milling Machine (6135 JP): Nidec Launches Its Offer

Despite the launch, Nidec’s offer at current terms has a low chance of success, necessitating revised terms. There remains a medium-to-high...

Arun George

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