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>An ad hoc <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> rebalance will be implemented at the close on 17 October with <a href="https://www.smartkarma.com/entities/light-wonder-inc-7e7d040f-e811-4fb9-9710-796a39af299e" target="_blank" data-smartkarma-citation="entities:40171:1" rel="noopener">Light &amp; Wonder (LNW AU)</a> replacing <a href="https://www.smartkarma.com/entities/united-malt-group-ltd" target="_blank" data-smartkarma-citation="entities:29116:1" rel="noopener">United Malt Group Ltd (UMG AU)</a>. </li>
<li>The rebalances of <a href="https://www.smartkarma.com/entities/wisdomtree-emerging-markets-146edc02-f8a5-4ac5-968b-5f0f7c89e476" target="_blank" data-smartkarma-citation="entities:32683:1" rel="noopener">Wisdomtree Emerging Markets (DEM US)</a>, <a href="https://www.smartkarma.com/entities/wisdomtree-em-small-cap" target="_blank" data-smartkarma-citation="entities:32679:1" rel="noopener">Wisdomtree Em Small Cap (DGS US)</a> and <a href="https://www.smartkarma.com/entities/wisdmtree-emerg-mkt-ex-st-ow" target="_blank" data-smartkarma-citation="entities:32798:1" rel="noopener">Wisdmtree Emerg Mkt Ex-St Ow (XSOE US)</a> will be implemented on 18 October.</li>
<li>There were net outflows from onshore China ETFs with inflows to larger cap ETFs and outflows mainly from the <a href="https://www.smartkarma.com/entities/csi-smallcap-500-index-shang" target="_blank" data-smartkarma-citation="entities:35347:1" rel="noopener">CSI Smallcap 500 Index</a> and CSI 1000 Index trackers.</li>
</ul>


An ad hoc S&amp;P/ASX 200 (AS51 INDEX) rebalance will be implemented at the close on 17 October with Light &amp; Wonder (LNW AU) replacing United Malt Group Ltd (UMG AU). 
The rebalances of Wisdomtree Emerging Markets (DEM US), Wisdomtree Em Small Cap (DGS US) and Wisdmtree Emerg Mkt Ex-St Ow (XSOE US) will be implemented on 18 October.
There were net outflows from onshore China ETFs with inflows to larger cap ETFs and outflows mainly from the CSI Smallcap 500 Index and CSI 1000 Index trackers.


Index Rebalance & ETF Flow Recap: HSCEI, HSTECH, TOPIX FFW, SSE50, AS51, ChiNext, Kenedix, Liontown

<ul>
<li>At the October rebalance, Free Float Weight (FFW) will be reduced on 284 stocks and increased on 458 stocks. 43 stocks will be removed from Phased Weight Reduction.</li>
<li>Estimated one-way turnover is 1.77% resulting in a one-way trade of ¥1.45tn. 364 stocks have over 4 days ADV to trade, 97 stocks have over 8 days ADV to trade.</li>
<li>Over the last 6 months, the stocks with inflows (&gt;US$25m) have outperformed the stocks with outflows (&gt;US$25m) with most of the outperformance coming in the last three months.</li>
</ul>


At the October rebalance, Free Float Weight (FFW) will be reduced on 284 stocks and increased on 458 stocks. 43 stocks will be removed from Phased Weight Reduction.
Estimated one-way turnover is 1.77% resulting in a one-way trade of ¥1.45tn. 364 stocks have over 4 days ADV to trade, 97 stocks have over 8 days ADV to trade.
Over the last 6 months, the stocks with inflows (&gt;US$25m) have outperformed the stocks with outflows (&gt;US$25m) with most of the outperformance coming in the last three months.


TOPIX October 2023 Rebalance: Round Trip Trade of US$20bn; Upweights Outperform Downweights

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS: SPX +0.1% UST Yields 4.25%(down !) on hot August CPI Print; UAW plans strike strategy as no deal yet with US Big 3 autos; China vs Apple: Confused messaging. </li>
<li>JAPAN:  NKY Futs -0.2% vs Cash; USDJPY 147.5; Kishida focuses on wage hikes after cabinet reshuffle; Softbank wins on ARM - prices at $51;  Fanuc to SELL at GS.</li>
<li>JAPAN X:  Kirin (and Sapporo) Embrace AI for Demand Forecasting. We think that this trend in Japan will only increase - with positive implications for margins and profits. </li>
</ul>


OVERSEAS: SPX +0.1% UST Yields 4.25%(down !) on hot August CPI Print; UAW plans strike strategy as no deal yet with US Big 3 autos; China vs Apple: Confused messaging. 
JAPAN:  NKY Futs -0.2% vs Cash; USDJPY 147.5; Kishida focuses on wage hikes after cabinet reshuffle; Softbank wins on ARM - prices at $51;  Fanuc to SELL at GS.
JAPAN X:  Kirin (and Sapporo) Embrace AI for Demand Forecasting. We think that this trend in Japan will only increase - with positive implications for margins and profits. 


Ohayo Japan: Hot Inflaton Print...Ignored! JAPAN X: Kirin's AI to Revolutionize Production Planning

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nidec-corp" target="_blank" data-smartkarma-citation="entities:7245:1" rel="noopener">Nidec Corp (6594 JP)</a> has had ambitions in machine tool space. They wanted to buy <a href="https://www.smartkarma.com/entities/takisawa-machine-tool-co-ltd" target="_blank" data-smartkarma-citation="entities:7344:1" rel="noopener">Takisawa Machine Tool (6121 JP)</a> but Takisawa wouldn't give them the time of day.</li>
<li>So Nidec announced hostile intentions and a 60-day period to negotiate. That's done, and today they announced a now-friendly deal. </li>
<li>This looks like an easy done deal. There is one major risk factor remaining, then another consideration when thinking about path. </li>
</ul>



Nidec Corp (6594 JP) has had ambitions in machine tool space. They wanted to buy Takisawa Machine Tool (6121 JP) but Takisawa wouldn't give them the time of day.
So Nidec announced hostile intentions and a 60-day period to negotiate. That's done, and today they announced a now-friendly deal. 
This looks like an easy done deal. There is one major risk factor remaining, then another consideration when thinking about path. 


Nidec (6594) Turns Vinegar to Wine as Takisawa Machine Tool (6121) Agrees To Takeover

<ul>
<li>
<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> has been on a relative tear recently. This is a bit surprising.  On a static equity-portfolio discount measure, it has outperformed regional banks.</li>
<li>On a static regional bank PBR basis, it has outperformed its equity portfolio and the discount to the After Tax Equity Portfolio Value (ATEPV) is the smallest in eight years.</li>
<li>Is there a sea change? There is a possibility, however remote, that domestic investor disappointment rears its voting head. That's the dream scenario. But I don't see it coming soon.</li>
</ul>



Bank of Kyoto (8369 JP) has been on a relative tear recently. This is a bit surprising.  On a static equity-portfolio discount measure, it has outperformed regional banks.
On a static regional bank PBR basis, it has outperformed its equity portfolio and the discount to the After Tax Equity Portfolio Value (ATEPV) is the smallest in eight years.
Is there a sea change? There is a possibility, however remote, that domestic investor disappointment rears its voting head. That's the dream scenario. But I don't see it coming soon.


Japan

NIDEC CORPORATION is the world's leading manufacturer of small precision motors mainly used in HDD and optical disk drives. The company has extended its focus to the home appliance and automotive markets. NIDEC is active in M&A and its subsidiaries include the world's leading manufacturers of LCD panel handling robots and camera shutters.

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Nidec Corp (6594 JP)

Index Rebalance & ETF Flow Recap: HSCEI, HSTECH, TOPIX FFW, SSE50, AS51, ChiNext, Kenedix, Liontown

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

TOPIX October 2023 Rebalance: Round Trip Trade of US$20bn; Upweights Outperform Downweights

There are FFW changes for 700+ stocks and changes to the Phased Weight Reduction list. Round trip trade is around US$20bn and there is over 8 days...

Brian Freitas

Ohayo Japan: Hot Inflaton Print...Ignored! JAPAN X: Kirin's AI to Revolutionize Production Planning

US markets ignore August CPI print; NKY Futs -0.2% vs Cash; USDJPY 147.5; Kishida focuses on wage hikes after cabinet reshuffle; Softbank wins on...

Mark Chadwick

Nidec (6594) Turns Vinegar to Wine as Takisawa Machine Tool (6121) Agrees To Takeover

A once-hostile approach by Nidec to Takisawa Machine Tool has become friendly and we have an agreed deal. No bump. One might expect it to be a...

Travis Lundy

Bank of Kyoto (8369) - Too Far Too Fast

Bank of Kyoto (8369) has a 50% payout but its shareholder base isn’t that supportive of activism need to monetise the value of the equity...

Travis Lundy

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