Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Quantitative Analysis

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<p>When Japanese small-cap stocks listed on JASDAQ, MOTHERS, and the Second Section of the Tokyo Stock Exchange aim at the big leagues and apply for reassignment to the First Section of the Tokyo Stock Exchange and are accepted, it causes significant events to occur. This triggers inclusion into the TOPIX Index which means passive funds tracking TOPIX need to buy on an inclusion event. This opens up several interesting trading opportunities for investors. </p>
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<p>In this insight, I have provided performance updates for 7 "Live" event stocks which are expected to have Inclusion Events at the end of December 2020 or January 2021 and 8 "Post" event stocks that completed their Inclusion Events at the end of October 2020 and November 2020. Furthermore, I have also highlighted some interesting Pre-event situations involving stocks that are likely to become TSE1-promotion candidates in the near future. </p>
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When Japanese small-cap stocks listed on JASDAQ, MOTHERS, and the Second Section of the Tokyo Stock Exchange aim at the big leagues and apply for reassignment to the First Section of the Tokyo Stock Exchange and are accepted, it causes significant events to occur. This triggers inclusion into the TOPIX Index which means passive funds tracking TOPIX need to buy on an inclusion event. This opens up several interesting trading opportunities for investors. 


In this insight, I have provided performance updates for 7 "Live" event stocks which are expected to have Inclusion Events at the end of December 2020 or January 2021 and 8 "Post" event stocks that completed their Inclusion Events at the end of October 2020 and November 2020. Furthermore, I have also highlighted some interesting Pre-event situations involving stocks that are likely to become TSE1-promotion candidates in the near future. 


<div>
<p>When Japanese small-cap stocks listed on JASDAQ, MOTHERS, and the Second Section of the Tokyo Stock Exchange aim at the big leagues and apply for reassignment to the First Section of the Tokyo Stock Exchange and are accepted, it causes significant events to occur.</p>
<p>This triggers inclusion into the TOPIX Index which means passive funds tracking TOPIX need to buy on an inclusion event. This opens up several interesting trading opportunities for investors. </p>
<p>In this insight, I have provided performance updates for 3 "Live" event stocks which have announced their TSE1 move in  October 2020 and 5 "Post" event stocks that completed their Inclusion Events today and some Pre-event trades involving stocks that are likely to become TSE1-promotion candidates in the near future. </p>
</div>


When Japanese small-cap stocks listed on JASDAQ, MOTHERS, and the Second Section of the Tokyo Stock Exchange aim at the big leagues and apply for reassignment to the First Section of the Tokyo Stock Exchange and are accepted, it causes significant events to occur.
This triggers inclusion into the TOPIX Index which means passive funds tracking TOPIX need to buy on an inclusion event. This opens up several interesting trading opportunities for investors. 
In this insight, I have provided performance updates for 3 "Live" event stocks which have announced their TSE1 move in  October 2020 and 5 "Post" event stocks that completed their Inclusion Events today and some Pre-event trades involving stocks that are likely to become TSE1-promotion candidates in the near future. 


<p>In late July 2020, the Tokyo Stock Exchange issued Revisions to <em>Listing Rules to Enhance Functions for Raising Funds through the Capital Market</em>. These were discussed by <a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a> in <a href="https://www.smartkarma.com/insights/the-tse-s-listing-criteria-revisions-part-i" target="_blank" data-smartkarma-citation="insights:43150" rel="noopener">The TSE's Listing Criteria Revisions - Part I</a>.</p><p>These revisions have very important implications to Pre-event trades in the TOPIX Inclusions Universe as fewer candidates will be able to meet these more-stringent new requirements. In this insight, we take a look at how these new requirements will influence our Pre-event trades. </p><p>In addition, I have also provided performance updates for 5 "Live" events which have announced their TSE1 move in September 2020 and 6 "Post" events that involves stocks which have already had their Inclusion events in August 2020. As noted last month, unusually there were no inclusions for September due to section/segment reassignment.</p><p><em>As always, there is more below the fold. </em></p>

In late July 2020, the Tokyo Stock Exchange issued Revisions to Listing Rules to Enhance Functions for Raising Funds through the Capital Market. These were discussed by Travis Lundy in The TSE's Listing Criteria Revisions - Part I.These revisions have very important implications to Pre-event trades in the TOPIX Inclusions Universe as fewer candidates will be able to meet these more-stringent new requirements. In this insight, we take a look at how these new requirements will influence our Pre-event trades. In addition, I have also provided performance updates for 5 "Live" events which have announced their TSE1 move in September 2020 and 6 "Post" events that involves stocks which have already had their Inclusion events in August 2020. As noted last month, unusually there were no inclusions for September due to section/segment reassignment.As always, there is more below the fold. 

Event-Driven

<div><p>TSE Mothers-listed high-precision X-ray mirror manufacturer <a href="https://www.smartkarma.com/entities/jtec-corp-osaka" target="_blank" data-smartkarma-citation="entities:27072:1" rel="noopener">JTEC Corp/Osaka (3446 JP)</a> announced (<a href="https://ssl4.eir-parts.net/doc/3446/tdnet/1884094/00.pdf" target="_blank" rel="noopener">J-only</a>) on Friday after market close it had received approval to move to TSE1 as of 28th September 2020. </p></div><div><p>TSE1 reassignment triggers inclusion into the TOPIX Index and the Inclusion Event can be expected to be at the close of trading 29th October 2020. </p></div><div><p>In this insight, we take a look at the Index Inclusion Parameters and the Fundamentals of the company to evaluate the upside potential of the TOPIX Inclusion Event. </p></div>

TSE Mothers-listed high-precision X-ray mirror manufacturer JTEC Corp/Osaka (3446 JP) announced (J-only) on Friday after market close it had received approval to move to TSE1 as of 28th September 2020. TSE1 reassignment triggers inclusion into the TOPIX Index and the Inclusion Event can be expected to be at the close of trading 29th October 2020. In this insight, we take a look at the Index Inclusion Parameters and the Fundamentals of the company to evaluate the upside potential of the TOPIX Inclusion Event. 

Japan

JTEC Corporation of Osaka manufactures bio-technology systems and equipment. The Company produces life science devices, x ray mirrors, and automated cell culture systems. JTEC also develops pharmaceutical products. JTEC serves clients in Japan.

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JTEC Corp/Osaka (3446 JP)

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