Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.</li>
<li>A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.</li>
<li>Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in <em>August 2023</em> based on trading data as of end-<em>August 2022</em>.</li>
</ul>


JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.
Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2023 based on trading data as of end-August 2022.


Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

NTT (Nippon Telegraph & Telephone) / Event-Driven

NTT (Nippon Telegraph & Telephone) (9432 JP)

<ul>
<li>The last of the three-leg rebalance for TOPIX and JPNK400 index weights takes place Wednesday 29 June at the close. This one is a bit larger than expected in April.</li>
<li>There were a large number of cancellations of shares by TSE Prime members in May which ups the predicted value to be traded. </li>
<li>Interestingly, because lots of names have seen share cancellations and FFW drops, the average passive ownership of TSE Float (not other providers' float) has gone up significantly through this process. </li>
</ul>


The last of the three-leg rebalance for TOPIX and JPNK400 index weights takes place Wednesday 29 June at the close. This one is a bit larger than expected in April.
There were a large number of cancellations of shares by TSE Prime members in May which ups the predicted value to be traded. 
Interestingly, because lots of names have seen share cancellations and FFW drops, the average passive ownership of TSE Float (not other providers' float) has gone up significantly through this process. 


Last Leg of TOPIX and JPNK400 FFW Rebal - ¥780bn One-Way Flow Wednesday

<ul>
<li>Three weeks ago, Yamauchi No 10 Family Office (YFO) announced its intentions to launch a Tender Offer by end-June. <a href="https://www.smartkarma.com/entities/toyo-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:1176:1" rel="noopener">Toyo Construction (1890 JP)</a> got upset and called YFO names.</li>
<li>TC announced a Poison Pill, they talked, TC accused YFO in the AGM Convocation of "extreme dishonesty." They have since met again, and finally signed a long standstill agreement. </li>
<li>But the Poison Pill will be put to shareholders (ISS recommends against), and shareholders have to decide from the public documents whether they believe Toyo Construction. </li>
</ul>


Three weeks ago, Yamauchi No 10 Family Office (YFO) announced its intentions to launch a Tender Offer by end-June. Toyo Construction (1890 JP) got upset and called YFO names.
TC announced a Poison Pill, they talked, TC accused YFO in the AGM Convocation of "extreme dishonesty." They have since met again, and finally signed a long standstill agreement. 
But the Poison Pill will be put to shareholders (ISS recommends against), and shareholders have to decide from the public documents whether they believe Toyo Construction. 


Toyo Construction - YFO Standstill Against TC Hostility

<ul>
<li>
<a href="https://www.smartkarma.com/entities/toyo-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:1176:1" rel="noopener">Toyo Construction (1890 JP)</a> today released a change to its Target Opinion Statement for Infroneer's takeover bid at ¥770/share. It supports the tender itself, but withdraws its recommendation investors tender.</li>
<li>Infroneer refused to raise their price, so this effectively kills their bid (though they will extend). TC will engage with Yamauchi Family Office which has separately offered to bid ¥1,000/share.</li>
<li>The dynamics have now changed. This is a range trade, and will likely take time unless Infroneer says "I'll sell at ¥1,000/share."</li>
</ul>



Toyo Construction (1890 JP) today released a change to its Target Opinion Statement for Infroneer's takeover bid at ¥770/share. It supports the tender itself, but withdraws its recommendation investors tender.
Infroneer refused to raise their price, so this effectively kills their bid (though they will extend). TC will engage with Yamauchi Family Office which has separately offered to bid ¥1,000/share.
The dynamics have now changed. This is a range trade, and will likely take time unless Infroneer says "I'll sell at ¥1,000/share."


ToyoKen (1890)- Infroneer Declines to Bid Up, YFO Now In Driver's Seat - Now It's A Range Trade

<ul>
<li>A Nikkei article this morning says the mystery bidder behind WK1/2/3 Limited is Nintendo founding family's Yamauchi No.10 Family Office. This changes things more than just knowing their identity does.</li>
<li>To start, their website is the most fun investment management company website I have come across. It's great.  <a href="https://y-n10.com/" target="_blank" rel="noopener">https://y-n10.com/</a>. It's also well worth reading. It's also worth noting their history.</li>
<li>Understanding the parameters here is key to understanding possible next steps.</li>
</ul>


A Nikkei article this morning says the mystery bidder behind WK1/2/3 Limited is Nintendo founding family's Yamauchi No.10 Family Office. This changes things more than just knowing their identity does.
To start, their website is the most fun investment management company website I have come across. It's great.  https://y-n10.com/. It's also well worth reading. It's also worth noting their history.
Understanding the parameters here is key to understanding possible next steps.


ToyoKen (1890) Mystery Bidder Is Yamauchi No. 10 Family Office - And That Changes Things

Japan

INFRONEER Holdings Inc. offers infrastructure construction services. The Company provides energy construction, road construction, airport construction, exhibition hall construction, and more. INFRONEER Holdings also produces construction equipment.

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INFRONEER Holdings (5076 JP)

JPX-Nikkei 400 Rebal 2023: End-Aug 2022

Some Potential ADDs have underperformed their EPS Trends and Potential DELs have outperformed their EPS trends and this makes the LONG Potential...

Janaghan Jeyakumar, CFA

Last Leg of TOPIX and JPNK400 FFW Rebal - ¥780bn One-Way Flow Wednesday

There are 2+ days until the last stage of the TSE FFW Rebalance is done. This time sees more changes because of increased share cancellation in...

Travis Lundy

Toyo Construction - YFO Standstill Against TC Hostility

YFO has signed a standstill agreement. TC asked for a month plus 10-day extension. They got a year. But they are going ahead with the Poison Pill,...

Travis Lundy

ToyoKen (1890)- Infroneer Declines to Bid Up, YFO Now In Driver's Seat - Now It's A Range Trade

Toyo Construction asked Infroneer to hike the ¥770/share bid. Infroneer said they couldn't. TC now opens this up to engagement with YFO, maybe...

Travis Lundy

ToyoKen (1890) Mystery Bidder Is Yamauchi No. 10 Family Office - And That Changes Things

The Mystery Bidders WK 1-3 are, according to a Nikkei article in mid-day, Yamauchi Number 10 Family Office. This changes things. It is worth...

Travis Lundy

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