Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Equity Bottom-Up

Kawasaki Heavy Industries / Equity Bottom-Up

<ul>
<li>Expect continued buying in defense related, as well as banks and life insurance, renewable energy, rails, and medical IT plays with Shigeru Ishiba at the helm. </li>
<li>The Market will be quick to rotate out of names which spiked into Friday's close on expectation for a Sanae Takaichi win in the LDP election.  </li>
<li>Ishiba has been a vocal critic of Abenomics, and his potential policies aimed at higher taxes for investment incomes and capital gains are set to weigh on the Japanese market. </li>
</ul>


Expect continued buying in defense related, as well as banks and life insurance, renewable energy, rails, and medical IT plays with Shigeru Ishiba at the helm. 
The Market will be quick to rotate out of names which spiked into Friday's close on expectation for a Sanae Takaichi win in the LDP election.  
Ishiba has been a vocal critic of Abenomics, and his potential policies aimed at higher taxes for investment incomes and capital gains are set to weigh on the Japanese market. 


Best Outright and Pair Trades for an Ishiba-Led LDP

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Last September in the release of its new Mid-Term Management Plan, Toyota Group member <a href="https://www.smartkarma.com/entities/aisin-corp" target="_blank" data-smartkarma-citation="entities:11809:1" rel="noopener">Aisin (7259 JP)</a> announced a plan to cut cross-holdings to zero. <a href="https://www.smartkarma.com/entities/jtekt-corp" target="_blank" data-smartkarma-citation="entities:12197:1" rel="noopener">JTEKT Corp (6473 JP)</a> followed suit.</li>
<li>It started with a selldown 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>, then <a href="https://www.smartkarma.com/entities/toyota-industries-corp" target="_blank" data-smartkarma-citation="entities:4500:1" rel="noopener">Toyota Industries (6201 JP)</a>, now <a href="https://www.smartkarma.com/insights/big-aisin-7259-offering-sets-stage-for-first-toyota-group-full-unwind" target="_blank" rel="noopener">Aisin</a>. Last FY, Toyota Group cos reduced crossholdings by ¥870bn. This year will be more.</li>
<li>Attached below is a general breakdown of Toyota Group cross-holdings, discussion of cross-holding policies, and analysis of what is next, and what is not.</li>
</ul>


Last September in the release of its new Mid-Term Management Plan, Toyota Group member Aisin (7259 JP) announced a plan to cut cross-holdings to zero. JTEKT Corp (6473 JP) followed suit.
It started with a selldown of Denso Corp (6902 JP), then Toyota Industries (6201 JP), now Aisin. Last FY, Toyota Group cos reduced crossholdings by ¥870bn. This year will be more.
Attached below is a general breakdown of Toyota Group cross-holdings, discussion of cross-holding policies, and analysis of what is next, and what is not.


Toyota Group Cross-Holding Structure Primer - Holdings, Unwind Progress, Buyback Policies, Etc

<ul>
<li>There has been a recent non-life insurer price-fixing scandal. The JFTC and FSA investigated. Last December, the FSA issued Business Improvement Orders to the four majors. </li>
<li>There was a Bigmotor scandal last summer and Sompo Japan got a Business Improvement Order last month. All four insurers have to respond to a BIO for the price-fixing scandal.</li>
<li>9 Feb post-close, Jiji/<a href="https://www.nikkei.com/article/DGXZQOUB255TQ0V20C24A1000000/" target="_blank" rel="noopener">Nikkei</a> had articles saying the FSA had urged four major non-lifes subject to the first BIO to accelerate sales of ¥6.5trln+ of 5,900 Cross-Holdings. That's big.</li>
</ul>


There has been a recent non-life insurer price-fixing scandal. The JFTC and FSA investigated. Last December, the FSA issued Business Improvement Orders to the four majors. 
There was a Bigmotor scandal last summer and Sompo Japan got a Business Improvement Order last month. All four insurers have to respond to a BIO for the price-fixing scandal.
9 Feb post-close, Jiji/Nikkei had articles saying the FSA had urged four major non-lifes subject to the first BIO to accelerate sales of ¥6.5trln+ of 5,900 Cross-Holdings. That's big.


[Japan Governance] FSA Urges Japan Non-Life Insurers to Eliminate Cross-Holdings - Sales Coming

<ul>
<li>TSE-Listed companies are asked to file "Management Conscious of Capital Cost/Stock Price" awareness reports/policies. Many have. Some are still working on it. And policies change, and CGR reports are updated.</li>
<li>611 new CGRs filed since 1-Mar-25. Our tools show every report, links to every document, and a diff file tool. Input a name, see the changes in the reports.</li>
<li>The JPX was curiously quiet itself as far as I can tell. No new governance reports, documents, etc, though there is a small <a href="https://www.jpx.co.jp/english/markets/indices/governance/index-consultation/sjcobq0000013b0b-att/e_consultation13_a1.pdf" target="_blank" rel="noopener">consultation</a> this month on the JPXNikkei400.</li>
</ul>


TSE-Listed companies are asked to file "Management Conscious of Capital Cost/Stock Price" awareness reports/policies. Many have. Some are still working on it. And policies change, and CGR reports are updated.
611 new CGRs filed since 1-Mar-25. Our tools show every report, links to every document, and a diff file tool. Input a name, see the changes in the reports.
The JPX was curiously quiet itself as far as I can tell. No new governance reports, documents, etc, though there is a small consultation this month on the JPXNikkei400.


Japan CorpGovReports: TSE "Mgmt Conscious Blah Blah" (Apr25), 🚨 AGAIN Read TSE Update Doc 3 🚨

<ul>
<li>TSE-Listed companies are asked to file "Management Conscious of Capital Cost/Stock Price" awareness reports/policies. Many have. Some are still working on it. And policies change, and CGR reports are updated.</li>
<li>161 new CGRs were filed in February 2025. Our tools show every report, links to every document, and now a new diff file tool. Input a name, see the changes.</li>
<li>THE BIG NEWS: The "Document 3" (linked below) of the TSE's 20th Council Meeting 18 Feb is worth reading carefully. This will set the stage for more takeover fun.</li>
</ul>


TSE-Listed companies are asked to file "Management Conscious of Capital Cost/Stock Price" awareness reports/policies. Many have. Some are still working on it. And policies change, and CGR reports are updated.
161 new CGRs were filed in February 2025. Our tools show every report, links to every document, and now a new diff file tool. Input a name, see the changes.
THE BIG NEWS: The "Document 3" (linked below) of the TSE's 20th Council Meeting 18 Feb is worth reading carefully. This will set the stage for more takeover fun.


Japan CorpGovReports: TSE "Mgmt Conscious Blah Blah" (Mar25), 🚨 Read TSE Update Doc 3 🚨

Japan

MS&AD Insurance Group Holdings, Inc. is a holding company established through reorganization of Mitsui Sumitomo Insurance Company, Limited.  The Group writes marine, fire, casualty, automobile, life, and allied insurance policies. MS&AD Insurance Group also operates financial services and agencies.

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MS&AD Insurance (8725 JP)

Best Outright and Pair Trades for an Ishiba-Led LDP

How to position in Japanese equities after the surprise win by Shigeru Ishiba over Sanae Takaichi in Friday's LDP election.

Andrew Jackson

Toyota Group Cross-Holding Structure Primer - Holdings, Unwind Progress, Buyback Policies, Etc

8mos past the first large Toyota Group selldown in Denso (i.e. past lockup). Others have followed since. Toyota Inds and Toyota R.E. have ¥600bn to...

Travis Lundy

[Japan Governance] FSA Urges Japan Non-Life Insurers to Eliminate Cross-Holdings - Sales Coming

Japan's non-life insurers have long been something like a closed end equity portfolio plus an asset swap. Now scandals have driven the FSA to push...

Travis Lundy

Japan CorpGovReports: TSE "Mgmt Conscious Blah Blah" (Apr25), 🚨 AGAIN Read TSE Update Doc 3 🚨

The TSE Management Awareness of Cost of Capital and Share Price saw 611 new Corporate Governance Reports in the last the month. This is a tool to...

Travis Lundy

Japan CorpGovReports: TSE "Mgmt Conscious Blah Blah" (Mar25), 🚨 Read TSE Update Doc 3 🚨

The monthly update on CorpGovReports and Actions To Implement Blah Blah Blah. 161 new CGRs since Feb1. Important: Feb18 Document 3 on new opinions...

Travis Lundy

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