Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>Japan to follow US higher on the much better-than-expected jobs report and the yen back to 148.9</li>
<li>Exporters including the Autos with high US exposures as well as Inbound related laggards such as Isetan Mitsukoshi and Shiseido/Kose should see sentiment improve</li>
<li>The strong US data should also help the JP Shippers rebound after dropping -8.2% on Fri on the end of the US port workers strike</li>
</ul>


Japan to follow US higher on the much better-than-expected jobs report and the yen back to 148.9
Exporters including the Autos with high US exposures as well as Inbound related laggards such as Isetan Mitsukoshi and Shiseido/Kose should see sentiment improve
The strong US data should also help the JP Shippers rebound after dropping -8.2% on Fri on the end of the US port workers strike


Japan Morning Connection: Expect Rebound After Strong US Job Data

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The Sep24 Nikkei 225 Rebal was odd. They could have done 3. They did 2. For now, I see 2 IN and 2 OUT for the Mar25 Nikkei 225 Rebal.</li>
<li>There is also a capping event for Fast Retailing which on mild outperformance could become a double-capping event. </li>
<li>There is a bit of a tech bent to potential ADDs. Some Consumer Goods stocks need stock splits to get in. The Committee will regret not adding PPIH last time.</li>
</ul>


The Sep24 Nikkei 225 Rebal was odd. They could have done 3. They did 2. For now, I see 2 IN and 2 OUT for the Mar25 Nikkei 225 Rebal.
There is also a capping event for Fast Retailing which on mild outperformance could become a double-capping event. 
There is a bit of a tech bent to potential ADDs. Some Consumer Goods stocks need stock splits to get in. The Committee will regret not adding PPIH last time.


Quiddity Mar25 Nikkei 225 Rebal: Likely 2 IN, 2 OUT, Again; Minimal Surprise Factor

<ul>
<li>Further PM Ishiba flip-flopping on his previously hawkish rates policy, set to catch markets wrong footed today.</li>
<li>Homebuilders may face a bigger fallout than expected from hurricane Helene given the potential to squeeze margins as materials and workers are prioritized for emergency efforts.</li>
<li>Exporters including autos, R/E and tourism related names should see renewed interest on the weak yen.</li>
</ul>


Further PM Ishiba flip-flopping on his previously hawkish rates policy, set to catch markets wrong footed today.
Homebuilders may face a bigger fallout than expected from hurricane Helene given the potential to squeeze margins as materials and workers are prioritized for emergency efforts.
Exporters including autos, R/E and tourism related names should see renewed interest on the weak yen.


Japan Morning Connection: Exporters to Jump on the Weak Yen

<ul>
<li>At end-September, the Nikkei 225 semi-annual review imposed a "cap" on <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a> in the Average, applying a 0.9 coefficient to the Price Adjustment Factor.</li>
<li>At its current weight, Fast Retailing will be capped again in March 2025. If the stock outperforms Nikkei 225 by another 3% before 31 January 2025, it could be double-capped.</li>
<li>And an additional 16% would mean ¥1.1trln of sales in March. But like last time, this is a rubber band which stretches. Too far, and selling pressure is obvious.</li>
</ul>


At end-September, the Nikkei 225 semi-annual review imposed a "cap" on Fast Retailing (9983 JP) in the Average, applying a 0.9 coefficient to the Price Adjustment Factor.
At its current weight, Fast Retailing will be capped again in March 2025. If the stock outperforms Nikkei 225 by another 3% before 31 January 2025, it could be double-capped.
And an additional 16% would mean ¥1.1trln of sales in March. But like last time, this is a rubber band which stretches. Too far, and selling pressure is obvious.


Mar25 Nikkei 225 Rebal: Considering Fast Retailing Capping.... Again...

Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

<ul>
<li>Since the total shares held by Founder Family, trust Banks and FamilyMart exceed 50%, this director appointment proposal will pass unless the shareholders held by the trust banks oppose it.</li>
<li>Challenges will be noted in the function of the nominating committee, which nominated directors with few elements falling under the skills item, and in the disclosure of the skills matrix.</li>
<li>While PPIH's free cash flow is ample and growth is expected, shareholder returns and governance remain challenges, but with overseas investor equity exceeding 30%, much improvement is expected in future.</li>
</ul>


Since the total shares held by Founder Family, trust Banks and FamilyMart exceed 50%, this director appointment proposal will pass unless the shareholders held by the trust banks oppose it.
Challenges will be noted in the function of the nominating committee, which nominated directors with few elements falling under the skills item, and in the disclosure of the skills matrix.
While PPIH's free cash flow is ample and growth is expected, shareholder returns and governance remain challenges, but with overseas investor equity exceeding 30%, much improvement is expected in future.


Governance and Shareholder Return Are Likely to Improve, and Investors Continue to Pay Attention

Japan

Pan Pacific International Holdings Corporation operates discount stores which sell consumer electronics, daily necessities, groceries, watches, and sporting goods. The Company mostly operates small scale stores based in Tokyo.

Pan Pacific International Holdings (7532 JP)

Price Gauge
52-week Range	0.00 - 0.00
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Pan Pacific International Holdings (7532 JP)

Japan Morning Connection: Expect Rebound After Strong US Job Data

Japan's market is expected to rise following the US jobs report, benefiting exporters and shippers after a recent drop.

Andrew Jackson

Quiddity Mar25 Nikkei 225 Rebal: Likely 2 IN, 2 OUT, Again; Minimal Surprise Factor

The Quiddity March 2025 Nikkei 225 Rebal Leaderboard. I see 2 in, 2 out. $3bn a side except if Fast Retailing outperforms N225 by 3%, in which case...

Travis Lundy

Japan Morning Connection: Exporters to Jump on the Weak Yen

PM Ishiba's policy shift could surprise markets, hurricane Helene may impact homebuilders more than expected, and exporters such as autos and...

Andrew Jackson

Mar25 Nikkei 225 Rebal: Considering Fast Retailing Capping.... Again...

Fast Retailing is the first Nikkei 225 stock to be capped. That meant nearly ¥400bn of selling yesterday. Now it is due to be capped again in 6...

Travis Lundy

Governance and Shareholder Return Are Likely to Improve, and Investors Continue to Pay Attention

I would like to discuss the issues on the August 16 Nikkei article, “Pan Pacific International Holdings Appoints 22-Year-Old Son of Yasuda's...

Metrical Inc

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japan Morning Connection: Expect Rebound After Strong US Job Data

​Japan's market is expected to rise following the US jobs report, benefiting exporters and shippers after a recent drop.

Andrew Jackson

Quiddity Mar25 Nikkei 225 Rebal: Likely 2 IN, 2 OUT, Again; Minimal Surprise Factor

The Quiddity March 2025 Nikkei 225 Rebal Leaderboard. I see 2 in, 2 out. $3bn a side except if Fast Retailing outperforms N225 by 3%, in which case...

Travis Lundy

Japan Morning Connection: Exporters to Jump on the Weak Yen

​PM Ishiba's policy shift could surprise markets, hurricane Helene may impact homebuilders more than expected, and exporters such as autos and...

Andrew Jackson

Mar25 Nikkei 225 Rebal: Considering Fast Retailing Capping.... Again...

Fast Retailing is the first Nikkei 225 stock to be capped. That meant nearly ¥400bn of selling yesterday. Now it is due to be capped again in 6...

Travis Lundy

Governance and Shareholder Return Are Likely to Improve, and Investors Continue to Pay Attention

I would like to discuss the issues on the August 16 Nikkei article, “Pan Pacific International Holdings Appoints 22-Year-Old Son of Yasuda's...

Metrical Inc

Japan's market is expected to rise following the US jobs report, benefiting exporters and shippers after a recent drop.

PM Ishiba's policy shift could surprise markets, hurricane Helene may impact homebuilders more than expected, and exporters such as autos and...