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

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nisshin-seifun-group-inc" target="_blank" data-smartkarma-citation="entities:640:1" rel="noopener">Nisshin Seifun Group</a>, <a href="https://www.smartkarma.com/entities/oji-holdings-corp" target="_blank" data-smartkarma-citation="entities:11348:1" rel="noopener">Oji Holdings</a>, <a href="https://www.smartkarma.com/entities/nippon-shinyaku-co-ltd" target="_blank" data-smartkarma-citation="entities:6634:1" rel="noopener">Nippon Shinyaku</a>, <a href="https://www.smartkarma.com/entities/cyberagent-inc" target="_blank" data-smartkarma-citation="entities:8197:1" rel="noopener">CyberAgent Inc</a>, <a href="https://www.smartkarma.com/entities/ngk-insulators-ltd" target="_blank" data-smartkarma-citation="entities:12580:1" rel="noopener">NGK Insulators</a>, <a href="https://www.smartkarma.com/entities/lixil-group-corp" target="_blank" data-smartkarma-citation="entities:454:1" rel="noopener">Lixil Group</a> and <a href="https://www.smartkarma.com/entities/sharp-corp" target="_blank" data-smartkarma-citation="entities:391:1" rel="noopener">Sharp Corp</a> have all underperformed the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> over the last 3-4 months.</li>
<li>The underperformance could lead to adjustments in global passive portfolios and liquidity events on some of the stocks.</li>
<li>Short interest has started to increase and there could be more pre-positioning yet to come over the next few weeks.</li>
</ul>



Nisshin Seifun Group, Oji Holdings, Nippon Shinyaku, CyberAgent Inc, NGK Insulators, Lixil Group and Sharp Corp have all underperformed the Nikkei 225 (NKY INDEX) over the last 3-4 months.
The underperformance could lead to adjustments in global passive portfolios and liquidity events on some of the stocks.
Short interest has started to increase and there could be more pre-positioning yet to come over the next few weeks.


Japan - Increase in Shorts on Some Interesting Stocks

<div><p>Last evening, <a href="https://www.smartkarma.com/entities/ngk-insulators-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:12580:1">Ngk Insulators (5333 JP)</a> announced a buyback for up to 7mm shares (around 2.2% of shares outstanding excluding Treasury shares) and up to ¥10 billion to be conducted between 1 November 2019 and 21 February 2020. The company also announced results where net sales and profits were down yoy and management lowered their revenue and profit forecasts for the full year.</p></div><div>
<p>We take a look at some of the details around the buyback and the impact of the previous buyback on the share price over the buyback period. From the earlier buyback we notice that management is price sensitive and will not chase the stock higher.</p>
<p>With the stock being a constituent in the Nikkei 225 Index, the buyback will increase future company EPS (and DPS) and could have a positive impact on the Nikkei 225 dividend futures market.</p>
</div>

Last evening, Ngk Insulators (5333 JP) announced a buyback for up to 7mm shares (around 2.2% of shares outstanding excluding Treasury shares) and up to ¥10 billion to be conducted between 1 November 2019 and 21 February 2020. The company also announced results where net sales and profits were down yoy and management lowered their revenue and profit forecasts for the full year.
We take a look at some of the details around the buyback and the impact of the previous buyback on the share price over the buyback period. From the earlier buyback we notice that management is price sensitive and will not chase the stock higher.
With the stock being a constituent in the Nikkei 225 Index, the buyback will increase future company EPS (and DPS) and could have a positive impact on the Nikkei 225 dividend futures market.


Doing bespoke work since 2002....., Custom Products Group

Patrick Hansen

Doing bespoke work since 2002.....

Custom Products Group

Custom Products was started 14 years ago at Lehman Brothers by current co-founder Patrick Hansen, CFA. After 3 years at Lehman, Patrick moved the team to Macquarie Securities where Simon Rigney (co-founder) joined. 3 years ago we took Custom Products independent. 

Our core strength can be summed up three words. 1- Customization - we have very little off the shelf products and most work is done on a one on one bespoke basis. 2- Speed - We pride ourselves in our ability to get requests back to the client very quickly. 3- Confidentiality - We do not redistribute. There is no grace period where we wait a week and then mass blast. Any request stops with that client.

Equity Bottom-Up

<p>With less than 4 months before the end of the fiscal year for most companies in Japan. We screened for names where there is a big disparity between consensus estimates and company guidance. We then backtested performance over the last 9 years. We found that companies where Net Income guidance is greater than 5% above consensus outperform TOPIX by an average of 3.6% from the beginning of January to April. Companies where Net Income guidance is 5% or more below consensus on average are only up 0.7% relative to TOPIX. </p>

With less than 4 months before the end of the fiscal year for most companies in Japan. We screened for names where there is a big disparity between consensus estimates and company guidance. We then backtested performance over the last 9 years. We found that companies where Net Income guidance is greater than 5% above consensus outperform TOPIX by an average of 3.6% from the beginning of January to April. Companies where Net Income guidance is 5% or more below consensus on average are only up 0.7% relative to TOPIX. 

Japan Consensus Vs. Company Guidance - Names with a Big Disparity

Japan

NGK Insulators, Ltd. manufactures and sells electrical insulators, industrial ceramic products, environmental systems, and electronic parts. The Company's products include ceramic catalyst carrier for exhaust gas purification, automotive honeycombs for exhaust filtering, gas analyzers, high pressure compaction systems, and sewer cleaning equipment.

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NGK Insulators (5333 JP)

Japan - Increase in Shorts on Some Interesting Stocks

There are a bunch of stocks in Japan that have underperformed the NKY over the last few months and that could lead to a liquidity event due to the...

Brian Freitas

NGK Insulators - Conducting A Buyback

Last evening, Ngk Insulators (5333 JP) announced a buyback for up to 7mm shares (around 2.2% of shares outstanding excluding Treasury shares) and...

Brian Freitas

Japan Consensus Vs. Company Guidance - Names with a Big Disparity

With less than 4 months before the end of the fiscal year for most companies in Japan. We screened for names where there is a big disparity between...

Custom Products Group

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52-week Range

Market Cap (USDm)

P/E

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