Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>Huge gains for JP names with EU exposure yesterday looks set to continue as markets rotate out of AI plays.</li>
<li>Sanken Electric went limit up on the news of ON Semi's bid for Allegro, although ALGM trading very wide overnight.</li>
<li>EU mania should be enough to reboot Daikin's heat pump catalyst off stone sold levels.</li>
</ul>


Huge gains for JP names with EU exposure yesterday looks set to continue as markets rotate out of AI plays.
Sanken Electric went limit up on the news of ON Semi's bid for Allegro, although ALGM trading very wide overnight.
EU mania should be enough to reboot Daikin's heat pump catalyst off stone sold levels.


Japan Morning Connection: Tech Out, All Things EU In

<ul>
<li>Echoes of August with Japan looking to start the day very weak on the lead from US semi related.</li>
<li>Expect heavy selling for recent retail margin favourites e.g. Mercari, IHI, KHI and Socionext, and SPE winners such as Kokusai and Advantest, although the sector will start under heavy pressure.</li>
<li>Nothing from Nikkei Inc. yet on their NKY225 rebalance decision, but expect outsized volatility today with many multi-strategy pods shuttered during the August sell off.</li>
</ul>


Echoes of August with Japan looking to start the day very weak on the lead from US semi related.
Expect heavy selling for recent retail margin favourites e.g. Mercari, IHI, KHI and Socionext, and SPE winners such as Kokusai and Advantest, although the sector will start under heavy pressure.
Nothing from Nikkei Inc. yet on their NKY225 rebalance decision, but expect outsized volatility today with many multi-strategy pods shuttered during the August sell off.


Japan Morning Connection: Expect Volatility with Retail and SPE Stocks Under Pressure

<ul>
<li>News Intel may be looking to restructure and even sell its fab business, a slight negative for Japanese SPE suppliers.</li>
<li>Japan upping defence budget to a record high a positive for related names, including KHI which has been excessively weak on the news it fabricated data for marine engine business.</li>
<li>Nikkei Inc. is expected to announce results for 30th September rebalance today or tomorrow which may see big buying for the likes of Ryohin Keikaku, NRI and possibly one other.</li>
</ul>


News Intel may be looking to restructure and even sell its fab business, a slight negative for Japanese SPE suppliers.
Japan upping defence budget to a record high a positive for related names, including KHI which has been excessively weak on the news it fabricated data for marine engine business.
Nikkei Inc. is expected to announce results for 30th September rebalance today or tomorrow which may see big buying for the likes of Ryohin Keikaku, NRI and possibly one other.


Japan Morning Connection: Record Defense Budget and Nikkei Rebalance Set to Boost Related Stocks

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Index Rebalance

<ul>
<li>Today after the close, the Nikkei Index Committee <a href="https://indexes.nikkei.co.jp/nkave/archives/news/20260904E_1.pdf" target="_blank" rel="noopener">announced</a> the Sep26 Nikkei 225 Average review. There are 3 ADDs and 3 DELETEs. </li>
<li>The 3 ADDs are <a href="https://www.smartkarma.com/entities/kokusai-electric-corp" target="_blank" data-smartkarma-citation="entities:40152:1" rel="noopener">Kokusai Electric (6525)</a>, <a href="https://www.smartkarma.com/entities/jx-advanced-metals-corporation" target="_blank" data-smartkarma-citation="entities:44346:1" rel="noopener">JX Advanced Metals (5016)</a>, and <a href="https://www.smartkarma.com/entities/capcom-co-ltd" target="_blank" data-smartkarma-citation="entities:1459:1" rel="noopener">Capcom Co Ltd (9697)</a>. Three DELETEs are <a href="https://www.smartkarma.com/entities/archion-corporation" target="_blank" data-smartkarma-citation="entities:47577:1" rel="noopener">Archion (543A)</a>, <a href="https://www.smartkarma.com/entities/konica-minolta-inc" target="_blank" data-smartkarma-citation="entities:17287:1" rel="noopener">Konica Minolta (4902)</a> , and <a href="https://www.smartkarma.com/entities/kanadevia-corporation" target="_blank" data-smartkarma-citation="entities:14969:1" rel="noopener">Kanadevia (7004)</a>. Limited surprises here. </li>
<li>I had Food &amp; Life (3563) instead of Capcom and I had Kanadevia just under the liquidity kickout threshold. Flows are still big (~US$4.7bn a side). Funding is +167 baskets.</li>
</ul>


Today after the close, the Nikkei Index Committee announced the Sep26 Nikkei 225 Average review. There are 3 ADDs and 3 DELETEs. 
The 3 ADDs are Kokusai Electric (6525), JX Advanced Metals (5016), and Capcom Co Ltd (9697). Three DELETEs are Archion (543A), Konica Minolta (4902) , and Kanadevia (7004). Limited surprises here. 
I had Food &amp; Life (3563) instead of Capcom and I had Kanadevia just under the liquidity kickout threshold. Flows are still big (~US$4.7bn a side). Funding is +167 baskets.


[Quiddity Index] Nikkei 225 Sep26 Rebal Results: 3 ADDs, 3 DELs, No New Rules Impact

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

<ul>
<li>The review period for the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> September rebalance ended on 31 July. Nikkei has also confirmed <a href="https://www.smartkarma.com/entities/advantest-corp" target="_blank" data-smartkarma-citation="entities:18107:1" rel="noopener">Advantest Corp (6857 JP)</a>'s capping at the rebalance.</li>
<li>The newly created Information &amp; Communication sector is the most underweight while the Technology sector remains the most overweight. We could see some changes from these sectors.</li>
<li>The changes at the September rebalance will set the tone for future rebalances and sector balance is likely to play a large role moving forward.</li>
</ul>


The review period for the Nikkei 225 (NKY INDEX) September rebalance ended on 31 July. Nikkei has also confirmed Advantest Corp (6857 JP)'s capping at the rebalance.
The newly created Information &amp; Communication sector is the most underweight while the Technology sector remains the most overweight. We could see some changes from these sectors.
The changes at the September rebalance will set the tone for future rebalances and sector balance is likely to play a large role moving forward.


Nikkei 225 Index Rebalance Preview (Sep 2026): Potential Adds, Deletes, Capping & Other Changes

Japan

Kanadevia Corporation develops, manufactures, and sells environmental equipment and facilities including garbage incinerators and industrial waste processing facilities, plants, ships, steel structures, and industrial machinery.

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Kanadevia (7004 JP)

Japan Morning Connection: Tech Out, All Things EU In

Gains for JP names with EU exposure as markets shift away from AI plays. Sanken Electric limit up on ON Semi's bid for Allegro. Daikin's heat pump...

Andrew Jackson

Japan Morning Connection: Expect Volatility with Retail and SPE Stocks Under Pressure

Japan's market set to open weak following US semi-related lead, heavy selling expected for retail margin favorites and SPE winners, potential...

Andrew Jackson

[Quiddity Index] Nikkei 225 Sep26 Rebal Results: 3 ADDs, 3 DELs, No New Rules Impact

The Sep26 Nikkei 225 Review turned out slightly different than expected. One change is a toss-up. The other is more of a question. The three ADDs...

Travis Lundy

Nikkei 225 Index Rebalance Preview (Sep 2026): Potential Adds, Deletes, Capping & Other Changes

We forecast 3 changes for the NKY in Sep and highlight potential changes. The introduction of a new sector and a new rule changes things a bit and...

Brian Freitas

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Japan Morning Connection: Tech Out, All Things EU In

Gains for JP names with EU exposure as markets shift away from AI plays. Sanken Electric limit up on ON Semi's bid for Allegro. Daikin's heat pump...

Andrew Jackson

Japan Morning Connection: Expect Volatility with Retail and SPE Stocks Under Pressure

​Japan's market set to open weak following US semi-related lead, heavy selling expected for retail margin favorites and SPE winners, potential...

Andrew Jackson

Japan Morning Connection: Record Defense Budget and Nikkei Rebalance Set to Boost Related Stocks

​News Intel may restructure/sell fab business, negative for Japanese SPE suppliers. Japan defense budget increase positive for related names....

Andrew Jackson

[Quiddity Index] Nikkei 225 Sep26 Rebal Results: 3 ADDs, 3 DELs, No New Rules Impact

The Sep26 Nikkei 225 Review turned out slightly different than expected. One change is a toss-up. The other is more of a question. The three ADDs...

Travis Lundy

Nikkei 225 Index Rebalance Preview (Sep 2026): Potential Adds, Deletes, Capping & Other Changes

We forecast 3 changes for the NKY in Sep and highlight potential changes. The introduction of a new sector and a new rule changes things a bit and...

Brian Freitas

Japan's market set to open weak following US semi-related lead, heavy selling expected for retail margin favorites and SPE winners, potential...

News Intel may restructure/sell fab business, negative for Japanese SPE suppliers. Japan defense budget increase positive for related names....