Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

In July 2020, the Tokyo Stock Exchange issued Revisions to Listing Rules to Enhance Functions for Raising Funds through the Capital Market as discussed by <a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a> in <a href="https://www.smartkarma.com/insights/the-tse-s-listing-criteria-revisions-part-i" target="_blank" data-smartkarma-citation="insights:43150" rel="noopener">The TSE's Listing Criteria Revisions - Part I</a>. Considering these changes, in <a href="https://www.smartkarma.com/insights/topix-inclusion-trade-summary-sep-2020" target="_blank" data-smartkarma-citation="insights:43700" rel="noopener">TOPIX Inclusion Trade Summary: Sep 2020</a>, I picked four names from Quiddity's TOPIX Inclusions Pre-event Watchlist which could potentially try to apply before 1st November 2020 to avoid having to face the new (and more stringent) section transfer requirements. 
A couple of weeks ago, on 18th December 2020,  <a href="https://www.smartkarma.com/entities/giftee-inc" target="_blank" data-smartkarma-citation="entities:28280:1" rel="noopener">giftee Inc (4449 JP)</a>, which was one of these four names, announced its TSE1 move and <a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a> covered this situation in <a href="https://www.smartkarma.com/insights/topix-inclusion-giftee-4449-bigger-deal-smaller-impact-expensive" target="_blank" data-smartkarma-citation="insights:46488" rel="noopener">TOPIX Inclusion : Giftee (4449) - Bigger Deal, Smaller Impact, Expensive.</a> 
Last week, after the close on 22nd December 2020, another name from this list, <a href="https://www.smartkarma.com/entities/odk-solutions-co-ltd" target="_blank" data-smartkarma-citation="entities:7143:1" rel="noopener">Odk Solutions (3839 JP)</a> announced they had received approval to move from the Second Section to the First Section of the Tokyo Stock Exchange as of 29th December 2020. 
TSE1 reassignment triggers inclusion into the TOPIX Index and the Inclusion Event can be expected to be at the close of trading 28th January 2021. 
ODK Solutions provides business process outsourcing services in Japan. The company also offers trust calculation services, software development services, network associated systems, and open systems, computer packages, and Office Automation machines. 
In this insight, we take a look at the Index Inclusion Parameters and the Fundamentals of the company to evaluate the upside potential of the TOPIX Inclusion Event.

In July 2020, the Tokyo Stock Exchange issued Revisions to Listing Rules to Enhance Functions for Raising Funds through the Capital Market as discussed by Travis Lundy in The TSE's Listing Criteria Revisions - Part I. Considering these changes, in TOPIX Inclusion Trade Summary: Sep 2020, I picked four names from Quiddity's TOPIX Inclusions Pre-event Watchlist which could potentially try to apply before 1st November 2020 to avoid having to face the new (and more stringent) section transfer requirements. 
A couple of weeks ago, on 18th December 2020,  giftee Inc (4449 JP), which was one of these four names, announced its TSE1 move and Travis Lundy covered this situation in TOPIX Inclusion : Giftee (4449) - Bigger Deal, Smaller Impact, Expensive. 
Last week, after the close on 22nd December 2020, another name from this list, Odk Solutions (3839 JP) announced they had received approval to move from the Second Section to the First Section of the Tokyo Stock Exchange as of 29th December 2020. 
TSE1 reassignment triggers inclusion into the TOPIX Index and the Inclusion Event can be expected to be at the close of trading 28th January 2021. 
ODK Solutions provides business process outsourcing services in Japan. The company also offers trust calculation services, software development services, network associated systems, and open systems, computer packages, and Office Automation machines. 
In this insight, we take a look at the Index Inclusion Parameters and the Fundamentals of the company to evaluate the upside potential of the TOPIX Inclusion Event. 

TOPIX Inclusion: ODK Solutions (3839 JP): High Impact BLUE Name

Quantitative Analysis

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When Japanese small-cap stocks listed on JASDAQ, MOTHERS, and the Second Section of the Tokyo Stock Exchange aim at the big leagues and apply for reassignment to the First Section of the Tokyo Stock Exchange and are accepted, it causes significant events to occur. This triggers inclusion into the TOPIX Index which means passive funds tracking TOPIX need to buy on an inclusion event. This opens up several interesting trading opportunities for investors. 
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In this insight, I have provided performance updates for 7 "Live" event stocks which are expected to have Inclusion Events at the end of December 2020 or January 2021 and 8 "Post" event stocks that completed their Inclusion Events at the end of October 2020 and November 2020. Furthermore, I have also highlighted some interesting Pre-event situations involving stocks that are likely to become TSE1-promotion candidates in the near future. 
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When Japanese small-cap stocks listed on JASDAQ, MOTHERS, and the Second Section of the Tokyo Stock Exchange aim at the big leagues and apply for reassignment to the First Section of the Tokyo Stock Exchange and are accepted, it causes significant events to occur. This triggers inclusion into the TOPIX Index which means passive funds tracking TOPIX need to buy on an inclusion event. This opens up several interesting trading opportunities for investors. 


In this insight, I have provided performance updates for 7 "Live" event stocks which are expected to have Inclusion Events at the end of December 2020 or January 2021 and 8 "Post" event stocks that completed their Inclusion Events at the end of October 2020 and November 2020. Furthermore, I have also highlighted some interesting Pre-event situations involving stocks that are likely to become TSE1-promotion candidates in the near future. 


<div>
When Japanese small-cap stocks listed on JASDAQ, MOTHERS, and the Second Section of the Tokyo Stock Exchange aim at the big leagues and apply for reassignment to the First Section of the Tokyo Stock Exchange and are accepted, it causes significant events to occur.
This triggers inclusion into the TOPIX Index which means passive funds tracking TOPIX need to buy on an inclusion event. This opens up several interesting trading opportunities for investors. 
In this insight, I have provided performance updates for 3 "Live" event stocks which have announced their TSE1 move in  October 2020 and 5 "Post" event stocks that completed their Inclusion Events today and some Pre-event trades involving stocks that are likely to become TSE1-promotion candidates in the near future. 
</div>


When Japanese small-cap stocks listed on JASDAQ, MOTHERS, and the Second Section of the Tokyo Stock Exchange aim at the big leagues and apply for reassignment to the First Section of the Tokyo Stock Exchange and are accepted, it causes significant events to occur.
This triggers inclusion into the TOPIX Index which means passive funds tracking TOPIX need to buy on an inclusion event. This opens up several interesting trading opportunities for investors. 
In this insight, I have provided performance updates for 3 "Live" event stocks which have announced their TSE1 move in  October 2020 and 5 "Post" event stocks that completed their Inclusion Events today and some Pre-event trades involving stocks that are likely to become TSE1-promotion candidates in the near future. 


In late July 2020, the Tokyo Stock Exchange issued Revisions to Listing Rules to Enhance Functions for Raising Funds through the Capital Market. These were discussed by <a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a> in <a href="https://www.smartkarma.com/insights/the-tse-s-listing-criteria-revisions-part-i" target="_blank" data-smartkarma-citation="insights:43150" rel="noopener">The TSE's Listing Criteria Revisions - Part I</a>.These revisions have very important implications to Pre-event trades in the TOPIX Inclusions Universe as fewer candidates will be able to meet these more-stringent new requirements. In this insight, we take a look at how these new requirements will influence our Pre-event trades. In addition, I have also provided performance updates for 5 "Live" events which have announced their TSE1 move in September 2020 and 6 "Post" events that involves stocks which have already had their Inclusion events in August 2020. As noted last month, unusually there were no inclusions for September due to section/segment reassignment.As always, there is more below the fold.

In late July 2020, the Tokyo Stock Exchange issued Revisions to Listing Rules to Enhance Functions for Raising Funds through the Capital Market. These were discussed by Travis Lundy in The TSE's Listing Criteria Revisions - Part I.These revisions have very important implications to Pre-event trades in the TOPIX Inclusions Universe as fewer candidates will be able to meet these more-stringent new requirements. In this insight, we take a look at how these new requirements will influence our Pre-event trades. In addition, I have also provided performance updates for 5 "Live" events which have announced their TSE1 move in September 2020 and 6 "Post" events that involves stocks which have already had their Inclusion events in August 2020. As noted last month, unusually there were no inclusions for September due to section/segment reassignment.As always, there is more below the fold. 

The month of August has been a fairly quiet one as far as TSE1 promotion announcements go. At the time of writing, there has been only one TSE1 promotion so far this month - <a href="https://www.smartkarma.com/insights/topix-inclusion-7059-jp-copro-holdings" target="_blank" data-smartkarma-citation="insights:42694" rel="noopener">TOPIX Inclusion (7059 JP): COPRO Holdings</a> (though another was announced after the close today).  
In this month's summary, I have provided performance updates for our "Pre-event" strategies and discussed 9 "Post" events which involve stocks which had their Inclusion Events at the end of July and August 2020. 
As always, there is more below the fold.

The month of August has been a fairly quiet one as far as TSE1 promotion announcements go. At the time of writing, there has been only one TSE1 promotion so far this month - TOPIX Inclusion (7059 JP): COPRO Holdings (though another was announced after the close today).  
In this month's summary, I have provided performance updates for our "Pre-event" strategies and discussed 9 "Post" events which involve stocks which had their Inclusion Events at the end of July and August 2020. 
As always, there is more below the fold. 

Japan

ODK Solutions Company, Ltd. provides outsources information services mainly for school and financial companies.

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ODK Solutions (3839 JP)

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