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 review period for the March rebalance of this global index ended 31 December, the changes should be announced on 20 February and implemented at the close on 20 March.</li>
<li>We forecast 41 changes across the index with 12 inclusions to the AC Index, 4 migrations from AC to AW, 11 migrations from AW to AC, and 14 deletions.</li>
<li>An equally weighted basket of the adds and upward migrations has outperformed the deletes and the downward migrations over the last 4 months with significant outperformance in the near-term too.</li>
</ul>


The review period for the March rebalance of this global index ended 31 December, the changes should be announced on 20 February and implemented at the close on 20 March.
We forecast 41 changes across the index with 12 inclusions to the AC Index, 4 migrations from AC to AW, 11 migrations from AW to AC, and 14 deletions.
An equally weighted basket of the adds and upward migrations has outperformed the deletes and the downward migrations over the last 4 months with significant outperformance in the near-term too.


Japan: (Forecast) Global Index Changes in March & Big Outperformance

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

<ul>
<li>Our key themes for Japanese banks in 2026 are top line growth due to a hawkish BoJ and the potential for shareholder value creation through cross-holding disposals</li>
<li>In the big caps, we stick with Resona Holdings as our top pick for its strong gearing to rising interest rates and its relatively high equity cross-holdings to market value</li>
<li>Our top mid-caps picks are Iyogin Holdings and Hokuhoku, both of which are well positioned to benefit from higher interest rates and also have healthy cross-holdings relative to market value</li>
</ul>


Our key themes for Japanese banks in 2026 are top line growth due to a hawkish BoJ and the potential for shareholder value creation through cross-holding disposals
In the big caps, we stick with Resona Holdings as our top pick for its strong gearing to rising interest rates and its relatively high equity cross-holdings to market value
Our top mid-caps picks are Iyogin Holdings and Hokuhoku, both of which are well positioned to benefit from higher interest rates and also have healthy cross-holdings relative to market value


Japanese Banks – 2026 High Conviction Ideas

<ul>
<li>Along with political turbulence, expectations of a near term BoJ rate hike may be diminishing; nonetheless, we believe that these rate hikes will, at worst, be delayed and not derailed</li>
<li>We take profits on Mizuho in big caps and on Hirogin Holdings in mid-caps, downgrading these names from buy to neutral whilst generally retaining banks with higher levels of cross-holdings</li>
<li>We maintain the following Japanese banks on buy ratings; in the big-caps, we keep Resona and Shizuoka and in the mid-caps we stick with Iyogin Holdings, Hokuhoku and Hachijuni</li>
</ul>


Along with political turbulence, expectations of a near term BoJ rate hike may be diminishing; nonetheless, we believe that these rate hikes will, at worst, be delayed and not derailed
We take profits on Mizuho in big caps and on Hirogin Holdings in mid-caps, downgrading these names from buy to neutral whilst generally retaining banks with higher levels of cross-holdings
We maintain the following Japanese banks on buy ratings; in the big-caps, we keep Resona and Shizuoka and in the mid-caps we stick with Iyogin Holdings, Hokuhoku and Hachijuni


Japanese Banks – We Clip Our Key Positive Picks in the Big-Caps and Mid-Caps

<ul>
<li>We incorporate our scorecard into this report covering ten Japanese midcap banks and we also introduce trailing twelve month return trends for the midcaps</li>
<li>Iyogin Holdings remains a buy, which tops pre-provision returns and has large strategic cross-holdings; Hokuhoku Financial and Hachijuni Bank are also buys with these occupying the top three scorecard rankings</li>
<li>We add Hirogin Holdings to the buy list; it is deep value among the peer group, with its premium earnings and dividend yield and its attractive ROE to PBV ratio</li>
</ul>


We incorporate our scorecard into this report covering ten Japanese midcap banks and we also introduce trailing twelve month return trends for the midcaps
Iyogin Holdings remains a buy, which tops pre-provision returns and has large strategic cross-holdings; Hokuhoku Financial and Hachijuni Bank are also buys with these occupying the top three scorecard rankings
We add Hirogin Holdings to the buy list; it is deep value among the peer group, with its premium earnings and dividend yield and its attractive ROE to PBV ratio


Japanese Midcap Banks – Introducing the Scorecard and Quarterly Return Trends

<ul>
<li>We update our views on ten Japanese midcap banks focusing on those with large strategic shareholdings relative to market value, as well as beneficiaries of the improving interest rate outlook</li>
<li>Our top-rated pick is <a href="https://www.smartkarma.com/entities/iyogin-holdings-inc" target="_blank" data-smartkarma-citation="entities:40839:1" rel="noopener">Iyogin Holdings (5830 JP)</a>, with its constructive mix of large strategic holdings, attractive valuations including PTBV ratio and healthy gearing to higher interest rates</li>
<li>We also retain Hokuhoku Financial and Hachijuni Bank as buys; Hokuhoku has yet to realize its large strategic holdings whilst Hachijuni has reached its target level for cross-holdings reduction</li>
</ul>


We update our views on ten Japanese midcap banks focusing on those with large strategic shareholdings relative to market value, as well as beneficiaries of the improving interest rate outlook
Our top-rated pick is Iyogin Holdings (5830 JP), with its constructive mix of large strategic holdings, attractive valuations including PTBV ratio and healthy gearing to higher interest rates
We also retain Hokuhoku Financial and Hachijuni Bank as buys; Hokuhoku has yet to realize its large strategic holdings whilst Hachijuni has reached its target level for cross-holdings reduction


Japanese Midcap Banks – Iyogin Holdings (5830 JP) Is Our Top Pick

Japan

Hokuhoku Financial Group, Inc. is a holding company, which manages financial operations for its subsidiaries.  As a financial group, the Company provides general banking services including deposits, loans, and foreign exchange transactions.  The Group also provides other financial services such as leasing and credit cards.

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Hokuhoku Financial Group (8377 JP)

Japan: (Forecast) Global Index Changes in March & Big Outperformance

There could be 41 changes for the index in March. The passive trading impact is high for most stocks. The adds and upward migrations have...

Brian Freitas

Japanese Banks – 2026 High Conviction Ideas

Japanese banks in 2026 should see top line growth from hawkish BoJ, shareholder value creation through cross-holding disposals; Resona top pick...

Victor Galliano

Japanese Banks – We Clip Our Key Positive Picks in the Big-Caps and Mid-Caps

With easier-for-longer monetary policy in Japan being a growing risk, we keep buys on select big and mid-cap banks with big equity cross-holdings,...

Victor Galliano

Japanese Midcap Banks – Introducing the Scorecard and Quarterly Return Trends

In this Japanese midcap banks report, we maintain Iyogin Holdings, Hokuhoku Financial, and Hachijuni Bank as top buys, adding Hirogin Holdings to...

Victor Galliano

Japanese Midcap Banks – Iyogin Holdings (5830 JP) Is Our Top Pick

We focus on large cross-holdings and positive interest rate gearing in this report on Japanese midcap banks; Iyogin Holdings is our top pick,...

Victor Galliano

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japan: (Forecast) Global Index Changes in March & Big Outperformance

There could be 41 changes for the index in March. The passive trading impact is high for most stocks. The adds and upward migrations have...

Brian Freitas

Japanese Banks – 2026 High Conviction Ideas

​Japanese banks in 2026 should see top line growth from hawkish BoJ, shareholder value creation through cross-holding disposals; Resona top pick...

Victor Galliano

Japanese Banks – We Clip Our Key Positive Picks in the Big-Caps and Mid-Caps

​With easier-for-longer monetary policy in Japan being a growing risk, we keep buys on select big and mid-cap banks with big equity cross-holdings,...

Victor Galliano

Japanese Midcap Banks – Introducing the Scorecard and Quarterly Return Trends

​In this Japanese midcap banks report, we maintain Iyogin Holdings, Hokuhoku Financial, and Hachijuni Bank as top buys, adding Hirogin Holdings to...

Victor Galliano

Japanese Midcap Banks – Iyogin Holdings (5830 JP) Is Our Top Pick

We focus on large cross-holdings and positive interest rate gearing in this report on Japanese midcap banks; Iyogin Holdings is our top pick,...

Victor Galliano

Japanese banks in 2026 should see top line growth from hawkish BoJ, shareholder value creation through cross-holding disposals; Resona top pick...

With easier-for-longer monetary policy in Japan being a growing risk, we keep buys on select big and mid-cap banks with big equity cross-holdings,...

In this Japanese midcap banks report, we maintain Iyogin Holdings, Hokuhoku Financial, and Hachijuni Bank as top buys, adding Hirogin Holdings to...