Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The merger between <a href="https://www.smartkarma.com/entities/kenedix-office-investment-co" target="_blank" data-smartkarma-citation="entities:16263:1" rel="noopener">Kenedix Office Investment Co (8972 JP)</a>, <a href="https://www.smartkarma.com/entities/kenedix-retail-reit-corp" target="_blank" data-smartkarma-citation="entities:188:1" rel="noopener">Kenedix Retail REIT (3453 JP)</a>, and <a href="https://www.smartkarma.com/entities/kenedix-residential-investment" target="_blank" data-smartkarma-citation="entities:17149:1" rel="noopener">Kenedix Residential Investment (3278 JP)</a> is done. Newco starts trading this week as KDX.</li>
<li>The trade was fine until I wrote 9 days ago there was still room to run. It fell the next day, bounced 3%, then got CRUSHED into the index upweight.</li>
<li>NEWREIT is now as cheap relative to its Pro-Forma Peer Group as it was at announcement.</li>
</ul>


The merger between Kenedix Office Investment Co (8972 JP), Kenedix Retail REIT (3453 JP), and Kenedix Residential Investment (3278 JP) is done. Newco starts trading this week as KDX.
The trade was fine until I wrote 9 days ago there was still room to run. It fell the next day, bounced 3%, then got CRUSHED into the index upweight.
NEWREIT is now as cheap relative to its Pro-Forma Peer Group as it was at announcement.


KDX (8972) - The Kenedix REIT Merger After a Disastrous Index Inclusion Trade

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 three-way merger of <a href="https://www.smartkarma.com/entities/kenedix-office-investment-co" target="_blank" data-smartkarma-citation="entities:16263:1" rel="noopener">Kenedix Office Investment Co (8972 JP)</a>, <a href="https://www.smartkarma.com/entities/kenedix-residential-investment" target="_blank" data-smartkarma-citation="entities:17149:1" rel="noopener">Kenedix Residential Investment (3278 JP)</a> and <a href="https://www.smartkarma.com/entities/kenedix-retail-reit-corp" target="_blank" data-smartkarma-citation="entities:188:1" rel="noopener">Kenedix Retail REIT (3453 JP)</a> will be implemented in less than 3 weeks.</li>
<li>With the market cap of the merged entity at US$4.85bn, there will be upgrades to indices with larger tracking assets and significant passive buying at the time of merger implementation.</li>
<li>All three stocks have outperformed their peers since merger announcement and over the last month and at least part of the upcoming passive flow is baked into the price.</li>
</ul>


The three-way merger of Kenedix Office Investment Co (8972 JP), Kenedix Residential Investment (3278 JP) and Kenedix Retail REIT (3453 JP) will be implemented in less than 3 weeks.
With the market cap of the merged entity at US$4.85bn, there will be upgrades to indices with larger tracking assets and significant passive buying at the time of merger implementation.
All three stocks have outperformed their peers since merger announcement and over the last month and at least part of the upcoming passive flow is baked into the price.


Kenedix Merger: Significant Passive Inflows Expected in Three Weeks

<ul>
<li>There are 15 stocks in Japan that will be sold by passive trackers at the close on 31 May.</li>
<li>Short interest has been increasing in these stocks over the last few months and there will be covering on implementation date.</li>
<li>Cumulative excess volume on all stocks has risen in the last couple of months though the pace of the increase has varied.</li>
</ul>


There are 15 stocks in Japan that will be sold by passive trackers at the close on 31 May.
Short interest has been increasing in these stocks over the last few months and there will be covering on implementation date.
Cumulative excess volume on all stocks has risen in the last couple of months though the pace of the increase has varied.


Japan - Another Big Round of Passive Selling

<ul>
<li>Today after the close, <a href="https://www.smartkarma.com/entities/kenedix-office-investment-co" target="_blank" data-smartkarma-citation="entities:16263:1" rel="noopener">Kenedix Office Investment Co (8972 JP)</a>, <a href="https://www.smartkarma.com/entities/kenedix-retail-reit-corp" target="_blank" data-smartkarma-citation="entities:188:1" rel="noopener">Kenedix Retail REIT (3453 JP)</a>, and <a href="https://www.smartkarma.com/entities/kenedix-residential-investment" target="_blank" data-smartkarma-citation="entities:17149:1" rel="noopener">Kenedix Residential Investment (3278 JP)</a> announced a three-way merger for Nov 1.</li>
<li>Kenedix Office REIT (KDO) will be the surviving entity, and what is now three REITs of ¥150-250bn in size will become one diversified REIT of ¥630-650bn.</li>
<li>That will trigger a size uplift and should also trigger index inclusion.</li>
</ul>


Today after the close, Kenedix Office Investment Co (8972 JP), Kenedix Retail REIT (3453 JP), and Kenedix Residential Investment (3278 JP) announced a three-way merger for Nov 1.
Kenedix Office REIT (KDO) will be the surviving entity, and what is now three REITs of ¥150-250bn in size will become one diversified REIT of ¥630-650bn.
That will trigger a size uplift and should also trigger index inclusion.


Kenedix Office/Resi/Commercial Three-Way Merger - Size Matters and Index Flows Do Too

<ul>
<li>The shareholders of <a href="https://www.smartkarma.com/entities/kenedix-office-investment-co" target="_blank" data-smartkarma-citation="entities:16263:1" rel="noopener">Kenedix Office Investment (8972 JP)</a>, <a href="https://www.smartkarma.com/entities/kenedix-residential-investment" target="_blank" data-smartkarma-citation="entities:17149:1" rel="noopener">Kenedix Residential Investment (3278 JP)</a> and <a href="https://www.smartkarma.com/entities/kenedix-retail-reit-corp" target="_blank" data-smartkarma-citation="entities:188:1" rel="noopener">Kenedix Retail REIT (3453 JP)</a> meet in a couple of weeks to vote on the merger.</li>
<li>The stocks are trading in line with the merger ratio and the initial spike following merger announcement has been followed by some selling.</li>
<li>The market cap of the combined entity should now be large enough for migration to indices with larger tracking assets bringing in large passive flows on merger completion.</li>
</ul>


The shareholders of Kenedix Office Investment (8972 JP), Kenedix Residential Investment (3278 JP) and Kenedix Retail REIT (3453 JP) meet in a couple of weeks to vote on the merger.
The stocks are trading in line with the merger ratio and the initial spike following merger announcement has been followed by some selling.
The market cap of the combined entity should now be large enough for migration to indices with larger tracking assets bringing in large passive flows on merger completion.


Kenedix Merger: Big Passive Inflows on the Cards

Japan

KDX Realty Investment Corporation operates a real estate investment trust company. The Company invests in office and residential buildings. KDX Realty Investment provides its services throughout Japan.

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KDX Realty Investment (8972 JP)

KDX (8972) - The Kenedix REIT Merger After a Disastrous Index Inclusion Trade

The Kenedix REIT 3-way merger promised strong demand on an index upweight, and bigger size suggested higher valuations. We got the demand, but a...

Travis Lundy

Kenedix Merger: Significant Passive Inflows Expected in Three Weeks

The Kenedix merger will be implemented in less than 3 weeks and there will be large passive inflows. All 3 stocks have outperformed their peers...

Brian Freitas

Japan - Another Big Round of Passive Selling

There will be passive selling in a bunch of stocks on 31 May. There has been an increase in shorts and in cumulative excess volume on the stocks,...

Brian Freitas

Kenedix Office/Resi/Commercial Three-Way Merger - Size Matters and Index Flows Do Too

The Kenedix super-group REIT merger has performed well (and outperformed the TSE REIT Index) since the merger announcement. That means it is more...

Travis Lundy

Kenedix Merger: Big Passive Inflows on the Cards

The Kenedix REITs are trading around the merger ratios and have outperformed peers since merger announcement. The increased market cap could result...

Brian Freitas

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