Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Index Rebalance

<ul>
<li>Friday marked the end of the data observation period for the autumn 2026 Nikkei 225 Review. Advantest was over 10% so it gets capped. The CPAF moves to 6.4.</li>
<li>There are some new selection rules added to the Guidebook. There are some small changes to existing sector classifications, a new sector, and some intra-sector rebal procedures in future.</li>
<li>As it stands, the Advantest Capping is the big trade, but that is far away. The ADDs should be known. The DELETEs are tough and not really sellable.</li>
</ul>


Friday marked the end of the data observation period for the autumn 2026 Nikkei 225 Review. Advantest was over 10% so it gets capped. The CPAF moves to 6.4.
There are some new selection rules added to the Guidebook. There are some small changes to existing sector classifications, a new sector, and some intra-sector rebal procedures in future.
As it stands, the Advantest Capping is the big trade, but that is far away. The ADDs should be known. The DELETEs are tough and not really sellable.


[Quiddity Index] Nikkei 225 Sep26 Rebal - Advantest Capped, Three In/Out Likely, New Rules for Later

<ul>
<li>There are nine trading days (including today) until the end of the observation period for the Sep 2026 Nikkei 225 review. Things should be really obvious by now. </li>
<li>Given recent volatility, they really aren't. I see two definite ADDs. Probably a third. That means three deletes. Policy-wise, two are easy. Intellectually, they are not. </li>
<li>Then there are capping trades. As of today there are two on tap. Intraday Friday there were three. I got a question about it so will math the math here.</li>
</ul>


There are nine trading days (including today) until the end of the observation period for the Sep 2026 Nikkei 225 review. Things should be really obvious by now. 
Given recent volatility, they really aren't. I see two definite ADDs. Probably a third. That means three deletes. Policy-wise, two are easy. Intellectually, they are not. 
Then there are capping trades. As of today there are two on tap. Intraday Friday there were three. I got a question about it so will math the math here.


[Quiddity Index] Nikkei 225 Sep26 Rebal - Difficult Deletes and Mathing the Math on Three Caps

<ul>
<li>Just after I last wrote a couple of weeks ago noting that the Top DELETE candidate had changed just weeks after the 3rd ADD candidate had changed, two caps arrived.</li>
<li>
<a href="https://www.smartkarma.com/entities/advantest-corp" target="_blank" data-smartkarma-citation="entities:18107:1" rel="noopener">Advantest Corp (6857 JP)</a> and <a href="https://www.smartkarma.com/entities/tokyo-electron-ltd" target="_blank" data-smartkarma-citation="entities:280:1" rel="noopener">Tokyo Electron (8035 JP)</a> went over 10% and have stayed up. <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a> is about 6% away. But FR and Advantest are negatively-correlated.</li>
<li>Newly available data tells us more about <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 JP)</a> and <a href="https://www.smartkarma.com/entities/kokusai-electric-corp" target="_blank" data-smartkarma-citation="entities:40152:1" rel="noopener">Kokusai Electric (6525 JP)</a>. The DELETE candidates are tougher.  </li>
</ul>


Just after I last wrote a couple of weeks ago noting that the Top DELETE candidate had changed just weeks after the 3rd ADD candidate had changed, two caps arrived.

Advantest Corp (6857 JP) and Tokyo Electron (8035 JP) went over 10% and have stayed up. Fast Retailing (9983 JP) is about 6% away. But FR and Advantest are negatively-correlated.
Newly available data tells us more about JX Advanced Metals (5016 JP) and Kokusai Electric (6525 JP). The DELETE candidates are tougher.  


[Quiddity Index] Nikkei 225 Sep26 Rebal - Easy ADDs, Tough DELETEs, Two(?) Caps; And Squeeziness

<ul>
<li>In early May, as with many months before, I had written about the nature of the Nikkei 25 rebal prediction decision tree. A week later, a branch, well... branched.</li>
<li>The third ADD changed in mid-month last month. Now, the first DELETE has changed. It likely isn't an auto-delete anymore. </li>
<li>Given the rankings of tech stocks, that may mean only two ADDs and two DELETES and it changes the calculus on the DELETEs as a whole.</li>
</ul>


In early May, as with many months before, I had written about the nature of the Nikkei 25 rebal prediction decision tree. A week later, a branch, well... branched.
The third ADD changed in mid-month last month. Now, the first DELETE has changed. It likely isn't an auto-delete anymore. 
Given the rankings of tech stocks, that may mean only two ADDs and two DELETES and it changes the calculus on the DELETEs as a whole.


[Quiddity Index] Nikkei 225 Sep26 Rebal - Changing Horses on the Top DELETE

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<ul>
<li>Takuma, historically, was valued as a cyclical engineering firm. Today, its high-margin operation and maintenance (O&amp;M) mix and clean balance sheet, has narrated a turnaround story. </li>
<li>
<a href="https://www.smartkarma.com/entities/takuma-co-ltd" target="_blank" data-smartkarma-citation="entities:18994:1" rel="noopener">Takuma Co Ltd (6013 JP)</a> started its buyback small each time, but of late, they launched an 11% of outstanding shares buy back, and keen to <strong>cancel</strong> those shares too. </li>
<li>Their recent &gt;30% revenue and EPS growth makes the forward PER at 15x and although it may have some near term weakness, mid to long term growth prospect is intact. </li>
</ul>


Takuma, historically, was valued as a cyclical engineering firm. Today, its high-margin operation and maintenance (O&amp;M) mix and clean balance sheet, has narrated a turnaround story. 

Takuma Co Ltd (6013 JP) started its buyback small each time, but of late, they launched an 11% of outstanding shares buy back, and keen to cancel those shares too. 
Their recent &gt;30% revenue and EPS growth makes the forward PER at 15x and although it may have some near term weakness, mid to long term growth prospect is intact. 


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)

[Quiddity Index] Nikkei 225 Sep26 Rebal - Advantest Capped, Three In/Out Likely, New Rules for Later

In July, Nikkei introduced new selection rules and some classification changes. They don't affect much this time (I believe) but they will increase...

Travis Lundy

[Quiddity Index] Nikkei 225 Sep26 Rebal - Difficult Deletes and Mathing the Math on Three Caps

The Nikkei 225 Sep26 Rebal has just 8 trading days left. The ADDs are pretty much cemented. The DELETEs are tough, not for the numbers but for...

Travis Lundy

[Quiddity Index] Nikkei 225 Sep26 Rebal - Easy ADDs, Tough DELETEs, Two(?) Caps; And Squeeziness

The Sep 2026 Nikkei 225 rebal is challenging. Two ADDs are easy. The third seems easy. The DELETEs are not, but I rarely recommend shorting them....

Travis Lundy

[Quiddity Index] Nikkei 225 Sep26 Rebal - Changing Horses on the Top DELETE

Volume traded has removed the Top Delete candidate from the likely delete list for Sep26. That changes the calculus. I was leaning to 3 adds 3...

Travis Lundy

Takuma (6013): Not a Sleepy Boiler

Takuma's transformation from cyclical engineering firm to high-margin O&M operator with strong financials and growth potential highlighted by...

Henry Soediarko

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Quiddity Index] Nikkei 225 Sep26 Rebal - Advantest Capped, Three In/Out Likely, New Rules for Later

In July, Nikkei introduced new selection rules and some classification changes. They don't affect much this time (I believe) but they will increase...

Travis Lundy

[Quiddity Index] Nikkei 225 Sep26 Rebal - Difficult Deletes and Mathing the Math on Three Caps

The Nikkei 225 Sep26 Rebal has just 8 trading days left. The ADDs are pretty much cemented. The DELETEs are tough, not for the numbers but for...

Travis Lundy

[Quiddity Index] Nikkei 225 Sep26 Rebal - Easy ADDs, Tough DELETEs, Two(?) Caps; And Squeeziness

The Sep 2026 Nikkei 225 rebal is challenging. Two ADDs are easy. The third seems easy. The DELETEs are not, but I rarely recommend shorting them....

Travis Lundy

[Quiddity Index] Nikkei 225 Sep26 Rebal - Changing Horses on the Top DELETE

Volume traded has removed the Top Delete candidate from the likely delete list for Sep26. That changes the calculus. I was leaning to 3 adds 3...

Travis Lundy

Takuma (6013): Not a Sleepy Boiler

​Takuma's transformation from cyclical engineering firm to high-margin O&M operator with strong financials and growth potential highlighted by...

Henry Soediarko

Takuma's transformation from cyclical engineering firm to high-margin O&M operator with strong financials and growth potential highlighted by...