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>Overnight, <a href="https://www.smartkarma.com/entities/hulic-co-ltd" target="_blank" data-smartkarma-citation="entities:388:1" rel="noopener">Hulic Co Ltd (3003 JP)</a> announced a placement of 85.37m shares to unwind crossholdings and improve corporate value. There is an overallotment option for another 12.8m shares.</li>
<li>There will be limited passive buying in the short-term and the number of shares offered is a very large percentage of real float of the stock.</li>
<li>A price drop of 20% or more puts <a href="https://www.smartkarma.com/entities/hulic-co-ltd" target="_blank" data-smartkarma-citation="entities:388:1" rel="noopener">Hulic Co Ltd (3003 JP)</a> at risk of deletion from a global index and could lead to a further price drop.</li>
</ul>


Overnight, Hulic Co Ltd (3003 JP) announced a placement of 85.37m shares to unwind crossholdings and improve corporate value. There is an overallotment option for another 12.8m shares.
There will be limited passive buying in the short-term and the number of shares offered is a very large percentage of real float of the stock.
A price drop of 20% or more puts Hulic Co Ltd (3003 JP) at risk of deletion from a global index and could lead to a further price drop.


Hulic Co (3003 JP) Placement: One Big Price Drop Could Lead to Another

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hulic-co-ltd" target="_blank" data-smartkarma-citation="entities:388:1" rel="noopener">Hulic Co Ltd (3003 JP)</a> has announced a secondary offering of up to 85.4 million shares (98.2 million including overallotment), worth around US$800 million (US$920 million including overallotment).</li>
<li>Unlike the 2021 offer, this is a pure secondary offering. It is smaller in terms of outstanding shares and 1-year ADV. The shares are hovering around all-time highs.</li>
<li>Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 10 and 12 December (likely 10 December).</li>
</ul>



Hulic Co Ltd (3003 JP) has announced a secondary offering of up to 85.4 million shares (98.2 million including overallotment), worth around US$800 million (US$920 million including overallotment).
Unlike the 2021 offer, this is a pure secondary offering. It is smaller in terms of outstanding shares and 1-year ADV. The shares are hovering around all-time highs.
Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 10 and 12 December (likely 10 December).


Hulic (3033 JP): A US$800 Million Secondary Offering

<ul>
<li>Overnight, <a href="https://www.smartkarma.com/entities/sanrio-co-ltd" target="_blank" data-smartkarma-citation="entities:16476:1" rel="noopener">Sanrio (8136 JP)</a> announced a placement of 25.87m shares to unwind crossholdings and improve corporate value. There is an overallotment option for another 3.88m shares.</li>
<li>There will be limited passive buying in the short-term and the shares offered is a large percentage of real float of the stock.</li>
<li>However, <a href="https://www.smartkarma.com/entities/sanrio-co-ltd" target="_blank" data-smartkarma-citation="entities:16476:1" rel="noopener">Sanrio (8136 JP)</a> is the highest ranked non-constituent stock in a global index universe and a drop in the stock price could be used to accumulate positions.</li>
</ul>


Overnight, Sanrio (8136 JP) announced a placement of 25.87m shares to unwind crossholdings and improve corporate value. There is an overallotment option for another 3.88m shares.
There will be limited passive buying in the short-term and the shares offered is a large percentage of real float of the stock.
However, Sanrio (8136 JP) is the highest ranked non-constituent stock in a global index universe and a drop in the stock price could be used to accumulate positions.


Sanrio (8136 JP) Placement: Potential Global Index Migration Leads to Interesting Dynamics

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sanrio-co-ltd" target="_blank" data-smartkarma-citation="entities:16476:1" rel="noopener">Sanrio (8136 JP)</a> has announced a secondary offering of up to 25.9  million shares (29.8 million including overallotment), worth around US$840 million (US$970 million including overallotment). </li>
<li>Sanrio's goal with the secondary offering is (i) to reduce cross-shareholdings and (ii) to expand and diversify the shareholder base, which should further enhance liquidity.</li>
<li>Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 10 and 13 December (likely 10 December).</li>
</ul>



Sanrio (8136 JP) has announced a secondary offering of up to 25.9  million shares (29.8 million including overallotment), worth around US$840 million (US$970 million including overallotment). 
Sanrio's goal with the secondary offering is (i) to reduce cross-shareholdings and (ii) to expand and diversify the shareholder base, which should further enhance liquidity.
Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 10 and 13 December (likely 10 December).


Sanrio (8136 JP): A US$840 Million Secondary Offering

Kansai Electric Power / Equity Capital Markets

<ul>
<li>Since the US$3.5 billion primary/secondary offering announcement, <a href="https://www.smartkarma.com/entities/kansai-electric-power-co-inc" target="_blank" data-smartkarma-citation="entities:18907:1" rel="noopener">Kansai Electric Power (9503 JP)</a>’s shares have been down 20.6% from the undisturbed price of JPY2,397 per share (13 November).</li>
<li>Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, KEPCO’s shares have followed the pattern of previous large placements.</li>
<li>The offering will likely be priced on 26 November. The average large Japanese placement tends to generate positive returns.</li>
</ul>


Since the US$3.5 billion primary/secondary offering announcement, Kansai Electric Power (9503 JP)’s shares have been down 20.6% from the undisturbed price of JPY2,397 per share (13 November).
Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, KEPCO’s shares have followed the pattern of previous large placements.
The offering will likely be priced on 26 November. The average large Japanese placement tends to generate positive returns.


Kansai Electric Power (9503 JP): The Current Playbook

Japan

Renesas Electronics Corporation researches, develops, designs and manufactures electronic components such as semiconductors and integrated devices.

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Renesas Electronics (6723 JP)

Hulic Co (3003 JP) Placement: One Big Price Drop Could Lead to Another

The secondary offering in Hulic is US$793m and represents 43x ADV and 37% of real float. A large price drops raises risk of deletion from a global...

Brian Freitas

Hulic (3033 JP): A US$800 Million Secondary Offering

Unlike the 2021 offer, this is a pure secondary offering. It is smaller in terms of outstanding shares and 1-year ADV. The shares are hovering...

Arun George

Sanrio (8136 JP) Placement: Potential Global Index Migration Leads to Interesting Dynamics

The secondary offering in Sanrio is US$865m and represents 10x ADV and 25% of real float. There are some interesting dynamics that will play out...

Brian Freitas

Sanrio (8136 JP): A US$840 Million Secondary Offering

The offering as a percentage of outstanding shares and ADV is small compared to the recent large Japanese placement. Looking at recent large...

Arun George

Kansai Electric Power (9503 JP): The Current Playbook

The offering will likely be priced on 26 November. KEPCO's share decline is the second-highest among recent large placements. The average large...

Arun George

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