Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In early February 2022, Silchester International Investors (according to its website) sent letters to four low-ROE-earning Japanese regional banks proposing a new dividend policy.</li>
<li>The management and boards of each bank rejected the policy proposal though two of the four had upped their proposed dividend or changed policy prior, and two upped it afterwards.</li>
<li>While <a href="https://www.smartkarma.com/entities/bank-of-kyoto" target="_blank" data-smartkarma-citation="entities:5248:1" rel="noopener">Bank of Kyoto (8369 JP)</a> is the biggie, <a href="https://www.smartkarma.com/entities/shiga-bank-ltd" target="_blank" data-smartkarma-citation="entities:18665:1" rel="noopener">Shiga Bank (8366 JP)</a> is another one with significant equity holdings. </li>
</ul>


In early February 2022, Silchester International Investors (according to its website) sent letters to four low-ROE-earning Japanese regional banks proposing a new dividend policy.
The management and boards of each bank rejected the policy proposal though two of the four had upped their proposed dividend or changed policy prior, and two upped it afterwards.
While Bank of Kyoto (8369 JP) is the biggie, Shiga Bank (8366 JP) is another one with significant equity holdings. 


JAPAN ACTIVISM:  Silchester Goes After Shiga Bank

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

NTT (Nippon Telegraph & Telephone) / Event-Driven

NTT (Nippon Telegraph & Telephone) (9432 JP)

<ul>
<li>On 7 April, the JPX announced the changes to the Free Float Weights (FFW) for the TOPIX Index. There are some big changes due to the updated FFW methodology.</li>
<li>From April to June, we see a one-way turnover of 2.87% and a one-way trade of ¥2,285bn. Some stocks have opposite way flows in different months.</li>
<li>Stocks with inflows outperformed stocks with outflows from Oct-Dec 2021 before giving up all the gains. These stocks have started to outperform and could continue outperforming over the next quarter.</li>
</ul>


On 7 April, the JPX announced the changes to the Free Float Weights (FFW) for the TOPIX Index. There are some big changes due to the updated FFW methodology.
From April to June, we see a one-way turnover of 2.87% and a one-way trade of ¥2,285bn. Some stocks have opposite way flows in different months.
Stocks with inflows outperformed stocks with outflows from Oct-Dec 2021 before giving up all the gains. These stocks have started to outperform and could continue outperforming over the next quarter.


TOPIX FFW Transition - Big Flows from April to June

<ul>
<li>Today the Osaka Supreme Court dismissed OK Corp's Permission Appeal regarding the EGM approving the <a href="https://www.smartkarma.com/entities/kansai-super-market-ltd" target="_blank" data-smartkarma-citation="entities:15519:1" rel="noopener">Kansai Super</a> merger with H2O subs Izumiya and Hankyu Oasis. That merger is Effective tomorrow.</li>
<li>OK Corp announced it would sell its shares in Kansai Super back to the company - as planned. </li>
<li>A disappointing ruling (especially given the TKS case) which will affect AGMs/EGMs going forward. And it means a soft share price and hard shareholder structure problem for Kansai Super near-term.</li>
</ul>


Today the Osaka Supreme Court dismissed OK Corp's Permission Appeal regarding the EGM approving the Kansai Super merger with H2O subs Izumiya and Hankyu Oasis. That merger is Effective tomorrow.
OK Corp announced it would sell its shares in Kansai Super back to the company - as planned. 
A disappointing ruling (especially given the TKS case) which will affect AGMs/EGMs going forward. And it means a soft share price and hard shareholder structure problem for Kansai Super near-term.


Kansai Super (9919) Merger OKed. OK Tender Going Nowhere. OK Going Home.

<ul>
<li>Nikkei <a href="https://www.nikkei.com/article/DGXZQOUB072VM0X01C21A2000000/?unlock=1" target="_blank" rel="noopener">article</a> out today at 6pm JST, the day before the Tender Offer close (after most shareholders would have decided to tender). This is slimy. Really bad. </li>
<li>The original Shinsei pushback was the partial offer was coercive at a low price because it didn't offer a full exit. SBI said "only 48%." </li>
<li>
<a href="https://www.smartkarma.com/entities/shinsei-bank-ltd" target="_blank" data-smartkarma-citation="entities:16897:1" rel="noopener">Shinsei Bank (8303 JP)</a> should push back, changing their recommendation, which <em>might</em> cause a 10-day extension. That would give investors a chance to withdraw.</li>
</ul>


Nikkei article out today at 6pm JST, the day before the Tender Offer close (after most shareholders would have decided to tender). This is slimy. Really bad. 
The original Shinsei pushback was the partial offer was coercive at a low price because it didn't offer a full exit. SBI said "only 48%." 

Shinsei Bank (8303 JP) should push back, changing their recommendation, which might cause a 10-day extension. That would give investors a chance to withdraw.


SBI To Apply for Bank Holding Company License Within Year And Squeeze Out Shinsei Minorities

<ul>
<li>There were shenanigans at the <a href="https://www.smartkarma.com/entities/kansai-super-market-ltd" target="_blank" data-smartkarma-citation="entities:15519:1" rel="noopener">Kansai Super Market (9919 JP)</a> EGM to approve the merger with H2O subs as a vote was marked differently after the close of voting.</li>
<li>The Osaka District Court granted an injunction saying there was a <em>"violation of laws and regulations or significant injustice in the method of resolution." </em>In appeal the judgment was upheld.</li>
<li>Kansai Super filed a conservation appeal with the Osaka High Court, which today overturned the District Court's injunction. </li>
</ul>


There were shenanigans at the Kansai Super Market (9919 JP) EGM to approve the merger with H2O subs as a vote was marked differently after the close of voting.
The Osaka District Court granted an injunction saying there was a "violation of laws and regulations or significant injustice in the method of resolution." In appeal the judgment was upheld.
Kansai Super filed a conservation appeal with the Osaka High Court, which today overturned the District Court's injunction. 


Kansai Super (9919): Osaka High Court Overturns District Court Injunction

Japan

Kansai Food Market Ltd. operates as a food supermarket chain operator. The Company mainly deals in foodstuffs, daily products, and miscellaneous goods. Kansai Food Market markets products in Hyogo and Osaka areas.

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Kansai Food Market (9919 JP)

JAPAN ACTIVISM: Silchester Goes After Shiga Bank

Silchester Int'l Investors has written letters to four regional banks where it holds large stakes. The goal appears to be to urge public debate of...

Travis Lundy

TOPIX FFW Transition - Big Flows from April to June

Changes to the Topix FFW methodology will result in a turnover of 2.87% & trade of ¥2,285bn from April to June. There is a lot to trade on some...

Brian Freitas

Kansai Super (9919) Merger OKed. OK Tender Going Nowhere. OK Going Home.

Kansai Super (9919)'s merger with H2O sub Izumiya and Hankyu Oasis will go through tomorrow, after the Supreme Court decided against OK Corp, who...

Travis Lundy

SBI To Apply for Bank Holding Company License Within Year And Squeeze Out Shinsei Minorities

SBI appears to be setting up to take majority control of Shinsei. The Nikkei carried an article about post-tender intentions for a takeover. This...

Travis Lundy

Kansai Super (9919): Osaka High Court Overturns District Court Injunction

Grave disappointment for Kansai Super (9919) shareholders as the Osaka High Court overturns the decision by the District Court, saying the EGM vote...

Travis Lundy

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