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

Event-Driven

<ul>
<li>The three-way merger of <a href="https://www.smartkarma.com/entities/kenedix-office-investment-co" target="_blank" data-smartkarma-citation="entities:16263:1" rel="noopener">Kenedix Office Investment Co (8972 JP)</a>, <a href="https://www.smartkarma.com/entities/kenedix-residential-investment" target="_blank" data-smartkarma-citation="entities:17149:1" rel="noopener">Kenedix Residential Investment (3278 JP)</a> and <a href="https://www.smartkarma.com/entities/kenedix-retail-reit-corp" target="_blank" data-smartkarma-citation="entities:188:1" rel="noopener">Kenedix Retail REIT (3453 JP)</a> will be implemented in less than 3 weeks.</li>
<li>With the market cap of the merged entity at US$4.85bn, there will be upgrades to indices with larger tracking assets and significant passive buying at the time of merger implementation.</li>
<li>All three stocks have outperformed their peers since merger announcement and over the last month and at least part of the upcoming passive flow is baked into the price.</li>
</ul>


The three-way merger of Kenedix Office Investment Co (8972 JP), Kenedix Residential Investment (3278 JP) and Kenedix Retail REIT (3453 JP) will be implemented in less than 3 weeks.
With the market cap of the merged entity at US$4.85bn, there will be upgrades to indices with larger tracking assets and significant passive buying at the time of merger implementation.
All three stocks have outperformed their peers since merger announcement and over the last month and at least part of the upcoming passive flow is baked into the price.


Kenedix Merger: Significant Passive Inflows Expected in Three Weeks

<ul>
<li>The shareholders of <a href="https://www.smartkarma.com/entities/kenedix-office-investment-co" target="_blank" data-smartkarma-citation="entities:16263:1" rel="noopener">Kenedix Office Investment (8972 JP)</a>, <a href="https://www.smartkarma.com/entities/kenedix-residential-investment" target="_blank" data-smartkarma-citation="entities:17149:1" rel="noopener">Kenedix Residential Investment (3278 JP)</a> and <a href="https://www.smartkarma.com/entities/kenedix-retail-reit-corp" target="_blank" data-smartkarma-citation="entities:188:1" rel="noopener">Kenedix Retail REIT (3453 JP)</a> meet in a couple of weeks to vote on the merger.</li>
<li>The stocks are trading in line with the merger ratio and the initial spike following merger announcement has been followed by some selling.</li>
<li>The market cap of the combined entity should now be large enough for migration to indices with larger tracking assets bringing in large passive flows on merger completion.</li>
</ul>


The shareholders of Kenedix Office Investment (8972 JP), Kenedix Residential Investment (3278 JP) and Kenedix Retail REIT (3453 JP) meet in a couple of weeks to vote on the merger.
The stocks are trading in line with the merger ratio and the initial spike following merger announcement has been followed by some selling.
The market cap of the combined entity should now be large enough for migration to indices with larger tracking assets bringing in large passive flows on merger completion.


Kenedix Merger: Big Passive Inflows on the Cards

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

NTT (Nippon Telegraph & Telephone) / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (9432 JP)</a> will likely buy back more shares than previously expected as the government sells shares down. Buy dips vs peers KDDI and Softbank Corp. This is a long-term tilt.</li>
<li>There are some doubts over the fate of <a href="https://www.smartkarma.com/entities/delta-electronics-thai-pcl" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thai (DELTA TB)</a>'s SET50 membership, at present, but it should escape deletion in December 2023. </li>
<li>Don't punt <a href="https://www.smartkarma.com/entities/fortescue-metals-group-ltd" target="_blank" data-smartkarma-citation="entities:41:1" rel="noopener">Fortescue Metals (FMG AU)</a> on the off-chance of a change of control in the wake pf the Forrest split. If anything, there might be a leakage of shares.</li>
</ul>



NTT (9432 JP) will likely buy back more shares than previously expected as the government sells shares down. Buy dips vs peers KDDI and Softbank Corp. This is a long-term tilt.
There are some doubts over the fate of Delta Electronics Thai (DELTA TB)'s SET50 membership, at present, but it should escape deletion in December 2023. 
Don't punt Fortescue Metals (FMG AU) on the off-chance of a change of control in the wake pf the Forrest split. If anything, there might be a leakage of shares.


Last Week in Event SPACE: NTT, Delta Electronics, Fortescue Metals, Nomura Real Estate

Travis Lundy

Nomura Real Estate Master Fund / Event-Driven

<ul>
<li>Today, <a href="https://www.smartkarma.com/entities/nomura-real-estate-master-fu" target="_blank" data-smartkarma-citation="entities:22930:1" rel="noopener">Nomura Real Estate Master Fund, (3462 JP)</a> - the largest REIT in the 'Diversified REIT' JREIT space - announced sponsor <a href="https://www.smartkarma.com/entities/nomura-real-estate-holdings" target="_blank" data-smartkarma-citation="entities:19866:1" rel="noopener">Nomura Real Estate (3231 JP)</a> would up its stake.</li>
<li>They would lift their stake from 4.47% by 2.54% to 7.01%. There is a reason for this, just like there was last time with <a href="https://www.smartkarma.com/entities/japan-excellent-inc" target="_blank" data-smartkarma-citation="entities:12745:1" rel="noopener">Japan Excellent (8987 JP)</a>. </li>
<li>Understanding the reason is how you understand the trade to do. </li>
</ul>


Today, Nomura Real Estate Master Fund, (3462 JP) - the largest REIT in the 'Diversified REIT' JREIT space - announced sponsor Nomura Real Estate (3231 JP) would up its stake.
They would lift their stake from 4.47% by 2.54% to 7.01%. There is a reason for this, just like there was last time with Japan Excellent (8987 JP). 
Understanding the reason is how you understand the trade to do. 


Nomura Real Estate To Buy Nomura RE Master Fund Units

<ul>
<li>4.5 months ago I wrote about a possible "Sustained Flow Event" on <a href="https://www.smartkarma.com/entities/japan-excellent-inc" target="_blank" data-smartkarma-citation="entities:12745:1" rel="noopener">Japan Excellent (8987 JP)</a>. Since then, the stock has outperformed every other Office REIT. It's up since then.</li>
<li>Outperformance within Office REITs has been a minimum of 3.5%, and a maximum of ~20.8% vs the biggest peer, with an average and median outperformance of 11.7% and 13.4% respectively.</li>
<li>This idiosyncratic story has come to an end. It may be a temporary end, but I don't see the next catalyst.</li>
</ul>


4.5 months ago I wrote about a possible "Sustained Flow Event" on Japan Excellent (8987 JP). Since then, the stock has outperformed every other Office REIT. It's up since then.
Outperformance within Office REITs has been a minimum of 3.5%, and a maximum of ~20.8% vs the biggest peer, with an average and median outperformance of 11.7% and 13.4% respectively.
This idiosyncratic story has come to an end. It may be a temporary end, but I don't see the next catalyst.


Japan Excellent (8987). It WAS Most Excellent. That's Now Done.

Japan

Japan Excellent, Inc. is a real estate investment trust (REIT), which mainly invests in office buildings in Tokyo area and major cities in Japan.

Japan Excellent (8987 JP)

Kenedix Merger: Significant Passive Inflows Expected in Three Weeks

The Kenedix merger will be implemented in less than 3 weeks and there will be large passive inflows. All 3 stocks have outperformed their peers...

Brian Freitas

Kenedix Merger: Big Passive Inflows on the Cards

The Kenedix REITs are trading around the merger ratios and have outperformed peers since merger announcement. The increased market cap could result...

Brian Freitas

Last Week in Event SPACE: NTT, Delta Electronics, Fortescue Metals, Nomura Real Estate

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Nomura Real Estate To Buy Nomura RE Master Fund Units

Nomura will buy Nomura RE Master Fund units. The proposed quantity is 10% of ADV for 6+ months. The goal? Get the Price/NAV up, so NREMF can buy...

Travis Lundy

Japan Excellent (8987). It WAS Most Excellent. That's Now Done.

The Japan Excellent (8987) trade has been Most Excellent (air guitar riff). It is now done. The sponsor has purchased the shares they wanted to...

Travis Lundy