Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Index Rebalance

<ul>
<li>Yesterday, the TSE announced the TOPIX review for October 2026. This is a single large announcement covering a massive methodology change.</li>
<li>There are 35 ADDs (we estimated 33, got 32/33 right) and 684 Transitional DELETEs (we estimated 694, got 672/694).</li>
<li>This creates US$69bn of flows in October and $13bn of flows in November. Expect a fair bit of jockeying from today onward.</li>
</ul>


Yesterday, the TSE announced the TOPIX review for October 2026. This is a single large announcement covering a massive methodology change.
There are 35 ADDs (we estimated 33, got 32/33 right) and 684 Transitional DELETEs (we estimated 694, got 672/694).
This creates US$69bn of flows in October and $13bn of flows in November. Expect a fair bit of jockeying from today onward.


[Quiddity Index] The Oct26 TOPIX Rebalance - 35 IN, 684 on a Slow Walk OUT; $69bn to Trade

<ul>
<li>The TOPIX Index - Japan's premier domestic equity index - will undergo a sea change in methodology at the end of this month, with ~760 names affected. </li>
<li>There will be roughly 35 or so ADDs, about 700 DELETEs (phased out over 8 quarters), and 40+ Liquidity Factor Removals. There will also be hundreds of FFW changes. </li>
<li>The likely ADDs have handily outperformed their peers over the past year, but some of that has been tech and idiosyncratic circumstances. There may still be trades to do.</li>
</ul>


The TOPIX Index - Japan's premier domestic equity index - will undergo a sea change in methodology at the end of this month, with ~760 names affected. 
There will be roughly 35 or so ADDs, about 700 DELETEs (phased out over 8 quarters), and 40+ Liquidity Factor Removals. There will also be hundreds of FFW changes. 
The likely ADDs have handily outperformed their peers over the past year, but some of that has been tech and idiosyncratic circumstances. There may still be trades to do.


[Quiddity Index] The TOPIX Change in Oct26 - Part V (Final Prep)

<ul>
<li>The TOPIX Index will see a sea change in methodology implemented in October 2026. The data cutoff for price is 31 August 2026. </li>
<li>That means there are two days and change left before the prices decide whether a stock gets in, stays in, gets deleted, or sees its Liquidity Factor removed. </li>
<li>At the borderlines, a move of a few percent either way in these last days may (assuming FFWs) swing the buy/sell by dozens of days of ADV.</li>
</ul>


The TOPIX Index will see a sea change in methodology implemented in October 2026. The data cutoff for price is 31 August 2026. 
That means there are two days and change left before the prices decide whether a stock gets in, stays in, gets deleted, or sees its Liquidity Factor removed. 
At the borderlines, a move of a few percent either way in these last days may (assuming FFWs) swing the buy/sell by dozens of days of ADV.


[Quiddity Index] The TOPIX Change in Oct26 - Part IV (Last Minute Jockeying)

<ul>
<li>Two+ years ago, the TSE announced a second phase methodology change for its main equity index TOPIX. TOPIX would change from being inclusive to being exclusive, resembling global indices. </li>
<li>The data cutoff for TOPIX methodology change rankings is 14bd away. That cutoff determines who gets in, who stays in, and who gets the boot. The annual FFW review coincides.</li>
<li>The BEST trades are the unrelated FFW trades, the INs, the LFRs, and of course, the NOT OUTs. Borderlines are interesting. Two stocks +2%? -4%?, +42/24x ADV. Or not. </li>
</ul>


Two+ years ago, the TSE announced a second phase methodology change for its main equity index TOPIX. TOPIX would change from being inclusive to being exclusive, resembling global indices. 
The data cutoff for TOPIX methodology change rankings is 14bd away. That cutoff determines who gets in, who stays in, and who gets the boot. The annual FFW review coincides.
The BEST trades are the unrelated FFW trades, the INs, the LFRs, and of course, the NOT OUTs. Borderlines are interesting. Two stocks +2%? -4%?, +42/24x ADV. Or not. 


[Quiddity Index] The TOPIX Change in Oct26 - Part III (INs Vs OUTs - Borderlines Are Trading Opps)

<ul>
<li>A couple of years ago, TOPIX announced a methodology change to start in October 2026. Until that point, companies which IPO on TSE Prime or move segments are TOPIX members.</li>
<li>In October 2026, using data from end-August 2026, there will be a ranking of the eligible TSE-listed (including Growth and Standard names) universe, adjusted by liquidity/ criteria.</li>
<li>Incumbent members in the top 97% of cumulative free-float market cap (FFMC) stay in. Non-members in the top 96% get in. Members outside 97% get deleted. We see 700+ changes.</li>
</ul>


A couple of years ago, TOPIX announced a methodology change to start in October 2026. Until that point, companies which IPO on TSE Prime or move segments are TOPIX members.
In October 2026, using data from end-August 2026, there will be a ranking of the eligible TSE-listed (including Growth and Standard names) universe, adjusted by liquidity/ criteria.
Incumbent members in the top 97% of cumulative free-float market cap (FFMC) stay in. Non-members in the top 96% get in. Members outside 97% get deleted. We see 700+ changes.


[Quiddity Index] The TOPIX Change in Oct 2026 - Part I (Methodology Madness)

Japan

HI-LEX CORPORATION manufactures control cables for automobiles, ships, medical equipment, and construction machines. It's products include parking brake cables transmission control cables, steering cables, and micro control cables. It also provides window regulator and power lift gate systems for automobiles. HI-LEX has subsidiaries in South Korea, the United States, Mexico, India, and Vietnam.

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Hi Lex Corp (7279 JP)

[Quiddity Index] The Oct26 TOPIX Rebalance - 35 IN, 684 on a Slow Walk OUT; $69bn to Trade

The TOPIX Rebal has been announced. 35 ADDs, 684 DELETEs. We had it at 33/694 (of which we were 97%/98% correct). We see October flows at US$69bn,...

Travis Lundy

[Quiddity Index] The TOPIX Change in Oct26 - Part V (Final Prep)

The TSE announcement for wholesale changes in the TOPIX Index is scheduled for Wednesday after the close. I expect 34-35 ADDs, ~700 DELETEs, and...

Travis Lundy

[Quiddity Index] The TOPIX Change in Oct26 - Part IV (Last Minute Jockeying)

The TOPIXOct 2026 Rebal is big and exciting. It is most exciting in the smallcaps in the $300-450mm range where the borders are for selection...

Travis Lundy

[Quiddity Index] The TOPIX Change in Oct26 - Part III (INs Vs OUTs - Borderlines Are Trading Opps)

The TOPIX Rebal is interesting. One pricing date, on a long flat tail of rankings, to determine whether to buy or sell 5-40x ADV. That kicks up...

Travis Lundy

[Quiddity Index] The TOPIX Change in Oct 2026 - Part I (Methodology Madness)

The change in TOPIX methodologyin October 2026 changes the paradigm to "normal index." It reduces the name count (probably not far enough) but...

Travis Lundy

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