Equity Derivatives Broker - Delta One Japan, Vantage Capital Markets Japan

François-Xavier Pustoc'h

Equity Derivatives Broker - Delta One Japan

Independent Financial Broker

Vantage Capital Markets Japan

We provide world class financial solutions to our extensive institutional client base including rapidly growing corporations, leading investment banks, commercial banks, asset managers, private equity funds, family offices and hedge funds.

Our services include capital market offerings and placements, wholesale brokerage and execution of cash and derivative products (both listed and OTC) across a range of asset classes.

VCM has offices in London, Hong Kong, Tokyo and Dubai from where we service our global client base. Our strength lies in the experience and quality of our teams, supported by excellent operations and infrastructure.

Event-Driven

<ul>
<li>On January 31st, Nikkei released a note “<a href="https://indexes.nikkei.co.jp/nkave/archives/news/20250131E_1.pdf" target="_blank" rel="noopener">Regarding the Capping Ratio of Fast Retailing in Nikkei </a><a href="https://indexes.nikkei.co.jp/nkave/archives/news/20250131E_1.pdf" target="_blank" rel="noopener">225</a>” about the change in capping ratio of Fast Retailing (9983.T) in the Nikkei 225 index.</li>
<li>As per the <a href="https://indexes.nikkei.co.jp/nkave/archives/file/nikkei_stock_average_guidebook_en.pdf" target="_blank" rel="noopener">Nikkei Stock Average Index Guidebook</a> (cf. below) the capping ratio will be changed from 0.9 to 0.8 from April 1st, 2025.</li>
<li>The change in the capping ratio is meant to change the weight of the shares from the current 11.18% to below the cap threshold of 10%. </li>
</ul>


On January 31st, Nikkei released a note “Regarding the Capping Ratio of Fast Retailing in Nikkei 225” about the change in capping ratio of Fast Retailing (9983.T) in the Nikkei 225 index.
As per the Nikkei Stock Average Index Guidebook (cf. below) the capping ratio will be changed from 0.9 to 0.8 from April 1st, 2025.
The change in the capping ratio is meant to change the weight of the shares from the current 11.18% to below the cap threshold of 10%. 


Capping Ratio of Fast Retailing in Nikkei 225

Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Equity Bottom-Up

<ul><li>Technically, the SET Index is expected to move in a sideways-down pattern, with the support at 1,280/1,273 points and the resistance at 1,298/1,305 points.</li><li>The recommended investment strategy is to sell on rallies until a new technical buy signal emerges.</li><li>KTX expects Thailand's inflation to continue recovering, leading to the lowest real rate in Asia and increasing the likelihood of the MPC maintaining interest rates.</li></ul>

Technically, the SET Index is expected to move in a sideways-down pattern, with the support at 1,280/1,273 points and the resistance at 1,298/1,305 points.The recommended investment strategy is to sell on rallies until a new technical buy signal emerges.KTX expects Thailand's inflation to continue recovering, leading to the lowest real rate in Asia and increasing the likelihood of the MPC maintaining interest rates.

<ul><li>Technically, the SET Index is expected to move sideways up, with the resistance at 1,404/1,411 points (200-day EMA) and the support at 1,389/1,380 points.</li><li>The market anticipates that the BoE may continue cutting the policy rate by another 75 bps in 2025E, bringing it down to 4.0% by September 30, 2025.</li><li>Pressure on the BoJ to raise its policy rate at the December 19 meeting has intensified, following expectations that headline inflation will recover to +2.5% YoY in November 2024 (to be announced on December 20).</li></ul>

Technically, the SET Index is expected to move sideways up, with the resistance at 1,404/1,411 points (200-day EMA) and the support at 1,389/1,380 points.The market anticipates that the BoE may continue cutting the policy rate by another 75 bps in 2025E, bringing it down to 4.0% by September 30, 2025.Pressure on the BoJ to raise its policy rate at the December 19 meeting has intensified, following expectations that headline inflation will recover to +2.5% YoY in November 2024 (to be announced on December 20).

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

Index Rebalance

<ul>
<li>The review period for the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 Index</a> March rebalance ends in January. There could be one outright change and one or two others driven by sector balance.</li>
<li>Depending on the changes, passive trackers will need to buy between 8.2-20.5x ADV (8.75%-24.5% of real float) and sell between 9-38x ADV on the deletions.</li>
<li>
<a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing</a>'s PAF could see a double reduction to keep the stock weight capped at 10%. There will be huge passive selling leading to funding inflows for other index constituents.</li>
</ul>


The review period for the Nikkei 225 Index March rebalance ends in January. There could be one outright change and one or two others driven by sector balance.
Depending on the changes, passive trackers will need to buy between 8.2-20.5x ADV (8.75%-24.5% of real float) and sell between 9-38x ADV on the deletions.

Fast Retailing's PAF could see a double reduction to keep the stock weight capped at 10%. There will be huge passive selling leading to funding inflows for other index constituents.


Nikkei 225 Index Rebalance Preview (Mar 2025): Ranking, Capping, Funding & Other Changes

<ul>
<li>Up to 12 stocks could be deleted from global passive portfolios in August. The deletion will lead to liquidity events where trackers will need to sell multiple days of ADV.</li>
<li>There has been a buildup of shorts on nearly all these stocks though the extent of the pre-positioning varies.</li>
<li>The increase in shorts is smaller than the estimated passive selling, though there is a fair amount of variability across the names. </li>
</ul>


Up to 12 stocks could be deleted from global passive portfolios in August. The deletion will lead to liquidity events where trackers will need to sell multiple days of ADV.
There has been a buildup of shorts on nearly all these stocks though the extent of the pre-positioning varies.
The increase in shorts is smaller than the estimated passive selling, though there is a fair amount of variability across the names. 


Japan - Passive Selling in a Few Weeks & Shorts Build Up

Japan

Nissan Chemical Industries, Ltd. produces a variety of chemical products, ranging from basic chemicals to functional chemical products.  The Company also manufactures agrochemicals and pharmaceutical products.

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Nissan Chemical Industries (4021 JP)

Capping Ratio of Fast Retailing in Nikkei 225

On January 31st, Nikkei released a note “Regarding the Capping Ratio of Fast Retailing in Nikkei 225” about the change in capping ratio of Fast...

Vantage Capital Markets Japan

Krungthai XSpring Zoom Eng.

Technically, the SET Index is expected to move in a sideways-down pattern, with the support at 1,280/1,273 points and the resistance at...

Krungthai XSpring

BoJ & BoE Meetings

Technically, the SET Index is expected to move sideways up, with the resistance at 1,404/1,411 points (200-day EMA) and the support at 1,389/1,380...

Krungthai XSpring

Nikkei 225 Index Rebalance Preview (Mar 2025): Ranking, Capping, Funding & Other Changes

There should be 1 change, could be 3 due to sector balance. The impact on the potential changes varies from 8-38x ADV. Fast Retailing could see a...

Brian Freitas

Japan - Passive Selling in a Few Weeks & Shorts Build Up

There are a bunch of stocks in Japan that could be sold by passive global investors in August. Shorts have increased on nearly all stocks and the...

Brian Freitas

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