Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Today, with Q1 earnings, which I found less than great, <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI Corp (9433 JP)</a> announced a Tender Offer Buyback to repurchase up to 64,102,500 shares for up to ¥250.03175bn.</li>
<li>The Tender Offer - at ¥3900/share vs Last at ¥4,271/share (designed for cross-holding unwinds) - goes from 31-July through 28-August. It fills the 83.3% of the buyback programme announced 11-May.</li>
<li>
<a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a> has announced it would sell ¥250bn of shares into this Tender Offer. This is less interesting than it looks. The whole thing is.</li>
</ul>


Today, with Q1 earnings, which I found less than great, KDDI Corp (9433 JP) announced a Tender Offer Buyback to repurchase up to 64,102,500 shares for up to ¥250.03175bn.
The Tender Offer - at ¥3900/share vs Last at ¥4,271/share (designed for cross-holding unwinds) - goes from 31-July through 28-August. It fills the 83.3% of the buyback programme announced 11-May.

Toyota Motor (7203 JP) has announced it would sell ¥250bn of shares into this Tender Offer. This is less interesting than it looks. The whole thing is.


KDDI (9433) - Own Share Tender Offer, Toyota To Sell (Gasp!)

Equity Capital Markets

<ul>
<li>Yesterday, Reuters reported that multiple Toyota Group companies would sell ~10% of <a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso Corp (6902 JP)</a> worth ¥700bn in a secondary share sale by year-end.</li>
<li>The sellers would be Toyota, selling down to just over 20%, Toyota Industries (6201) (selling down a bit more than half, and <a href="https://www.smartkarma.com/entities/aisin-seiki-co-ltd" target="_blank" data-smartkarma-citation="entities:11809:1" rel="noopener">Aisin Seiki (7259 JP)</a> selling its 2% stake. </li>
<li>Denso would buy back shares. This whole thing is both interesting and complicated so I discuss the interesting complications below. It <em>looks</em> bigger than it probably is.</li>
</ul>


Yesterday, Reuters reported that multiple Toyota Group companies would sell ~10% of Denso Corp (6902 JP) worth ¥700bn in a secondary share sale by year-end.
The sellers would be Toyota, selling down to just over 20%, Toyota Industries (6201) (selling down a bit more than half, and Aisin Seiki (7259 JP) selling its 2% stake. 
Denso would buy back shares. This whole thing is both interesting and complicated so I discuss the interesting complications below. It looks bigger than it probably is.


Huge Denso (6902) Secondary Sale by Toyota Group - Admiral Ackbar Says "It's A Trap!"

Co-Founder & CEO, Newmark Risk

Nicholas Pezolano

Co-Founder & CEO

Option analytics for institutional investors

Newmark Risk

Fin-tech company focused on providing option derived analytics for institutional investors.

We handle the complexity of options data so you don't have to.

- Data and Analytics available all in one place so you can focus on Strategy Development
- Custom Solutions for your data and/or portfolio needs
- Advisory services to lend our expertise

Knowledge is something that was meant to be shared and we provide insights to our clients and to the community via posting about our research findings.

Quantitative Analysis

<ul>
<li>Box Spreads have become an increasingly popular strategy utilized in the US markets, so we explore this strategy in Japan.</li>
<li>Opportunities exist for traders to lock in JPY margin rates lower than their brokerage.</li>
<li>A historical analysis of the strategy showcases the favorable opportunities for investors</li>
</ul>


Box Spreads have become an increasingly popular strategy utilized in the US markets, so we explore this strategy in Japan.
Opportunities exist for traders to lock in JPY margin rates lower than their brokerage.
A historical analysis of the strategy showcases the favorable opportunities for investors


Equity Bottom-Up

NTT (Nippon Telegraph & Telephone) / Equity Bottom-Up

<ul>
<li>The Kishida administration is looking for funding sources for its two big objectives - 1) raising the birthrate, 2) raising defense spending by 60% in 5yrs to 2% of GDP.</li>
<li>The second is not new. It was in an "order" PM Kishida gave to FinMin Suzuki and MinDef Hamada last November. They need ¥48trln by end 2027. </li>
<li>Yesterday, in an LDP meeting, the idea of changing the NTT Law so the government could sell more NTT shares was mooted. It's worth thinking about.</li>
</ul>


The Kishida administration is looking for funding sources for its two big objectives - 1) raising the birthrate, 2) raising defense spending by 60% in 5yrs to 2% of GDP.
The second is not new. It was in an "order" PM Kishida gave to FinMin Suzuki and MinDef Hamada last November. They need ¥48trln by end 2027. 
Yesterday, in an LDP meeting, the idea of changing the NTT Law so the government could sell more NTT shares was mooted. It's worth thinking about.


NTT (9432 JP) - Would the Govt Sell All Its Shares? Why? How? How Long? Overhang?

<ul>
<li>This past week saw dramatic moves in Japanese stock markets. TOPIX +3.1% N225 +4.8% - up the 6th week in a row - closing at their highest in 33 years. </li>
<li>Flows were positive the week before, and I expect we'll see next week they were positive this past week. But most striking was the interplay between Nikkei 225 and TOPIX.</li>
<li>If foreign inflows increase, Nikkei is likely to outperform TOPIX both because of its existence and previous use, and its construction. And that means watching one's trades, shorts, and executions.</li>
</ul>


This past week saw dramatic moves in Japanese stock markets. TOPIX +3.1% N225 +4.8% - up the 6th week in a row - closing at their highest in 33 years. 
Flows were positive the week before, and I expect we'll see next week they were positive this past week. But most striking was the interplay between Nikkei 225 and TOPIX.
If foreign inflows increase, Nikkei is likely to outperform TOPIX both because of its existence and previous use, and its construction. And that means watching one's trades, shorts, and executions.


Japan

KDDI CORPORATION provides mobile communication services and sells mobile devices.  The Company also is a broadband provider.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

KDDI Corp (9433 JP)

Huge Denso (6902) Secondary Sale by Toyota Group - Admiral Ackbar Says "It's A Trap!"

Toyota Group will do a large secondary offering of Denso (6902) shares. Toyota, Toyota Industries, and Aishin will sell. This is more complicated...

Travis Lundy

EQD | Are Box Spreads Viable in Japan?

Box spreads may be an effective strategy for Japanese investors to lock in margin rates lower than their prime brokerage with minimal risk and...

Nicholas Pezolano

NTT (9432 JP) - Would the Govt Sell All Its Shares? Why? How? How Long? Overhang?

Yesterday saw a curious bit of news. The govt may try to change the NTT Law to enable them to sell NTT shares to raise funds for increased defense...

Travis Lundy

Nikkei 225 Vs TOPIX Dynamics

Last week, Japan's indices hit new 33yr highs. "Japan is back" seems to be a new narrative, and that is creating new inflows. Some of that has...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

KDDI (9433) - Own Share Tender Offer, Toyota To Sell (Gasp!)

KDDI has announced a tender offer to fulfil 83% of their original buyback program. Toyota will sell. This looks more important, governance-wise,...

Travis Lundy

Huge Denso (6902) Secondary Sale by Toyota Group - Admiral Ackbar Says "It's A Trap!"

Toyota Group will do a large secondary offering of Denso (6902) shares. Toyota, Toyota Industries, and Aishin will sell. This is more complicated...

Travis Lundy

EQD | Are Box Spreads Viable in Japan?

Box spreads may be an effective strategy for Japanese investors to lock in margin rates lower than their prime brokerage with minimal risk and...

Nicholas Pezolano

NTT (9432 JP) - Would the Govt Sell All Its Shares? Why? How? How Long? Overhang?

Yesterday saw a curious bit of news. The govt may try to change the NTT Law to enable them to sell NTT shares to raise funds for increased defense...

Travis Lundy

Nikkei 225 Vs TOPIX Dynamics

Last week, Japan's indices hit new 33yr highs. "Japan is back" seems to be a new narrative, and that is creating new inflows. Some of that has...

Travis Lundy