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>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 (NKY INDEX)</a> September rebalance ends in July. There could be three changes at the rebalance with sector balance in focus for the additions.</li>
<li>Depending on the changes, passive trackers will need to buy between 5-16x ADV (10.1%-24% of real float) on the inclusions and sell between 4-42x 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 (9983 JP)</a> will be capped to 10% of the index weight while <a href="https://www.smartkarma.com/entities/tokyo-electron-ltd" target="_blank" data-smartkarma-citation="entities:280:1" rel="noopener">Tokyo Electron (8035 JP)</a> is also close to the 10% cap.</li>
</ul>


The review period for the Nikkei 225 (NKY INDEX) September rebalance ends in July. There could be three changes at the rebalance with sector balance in focus for the additions.
Depending on the changes, passive trackers will need to buy between 5-16x ADV (10.1%-24% of real float) on the inclusions and sell between 4-42x ADV on the deletions.

Fast Retailing (9983 JP) will be capped to 10% of the index weight while Tokyo Electron (8035 JP) is also close to the 10% cap.


Nikkei 225 Index Rebalance Preview (Sep 2024): Ranking, Capping, Funding & Other Changes

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>9 weeks ago, the FT reported Elliott Management had a stake in <a href="https://www.smartkarma.com/entities/mitsui-fudosan-co-ltd" target="_blank" data-smartkarma-citation="entities:565:1" rel="noopener">Mitsui Fudosan (8801 JP)</a> and had asked them to sell cross-holdings and do a ¥1trln buyback. Mitsui responds.</li>
<li>Lawrence Ho is buying <a href="https://www.smartkarma.com/entities/melco-international-development-ltd" target="_blank" data-smartkarma-citation="entities:809:1" rel="noopener">Melco(200 HK)</a>. While it often pays to follows where the family invests, Melco is trading too tight for what is a simple holding company structure.</li>
<li>Avoid being long <a href="https://www.smartkarma.com/entities/aozora-bank-ltd" target="_blank" data-smartkarma-citation="entities:6483:1" rel="noopener">Aozora Bank Ltd (8304 JP)</a> vs the Banks Index, a portfolio of other cheaper banks, etc. Minimal/negligible upside in following Murakami-san here. And Activism on Banks is difficult.</li>
</ul>


9 weeks ago, the FT reported Elliott Management had a stake in Mitsui Fudosan (8801 JP) and had asked them to sell cross-holdings and do a ¥1trln buyback. Mitsui responds.
Lawrence Ho is buying Melco(200 HK). While it often pays to follows where the family invests, Melco is trading too tight for what is a simple holding company structure.
Avoid being long Aozora Bank Ltd (8304 JP) vs the Banks Index, a portfolio of other cheaper banks, etc. Minimal/negligible upside in following Murakami-san here. And Activism on Banks is difficult.


Last Week in Event SPACE: Mitsui Fudosan, Melco, Aozora Bank, CGN New Energy

Travis Lundy

<ul>
<li>
<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> is the largest weight in the Nikkei 225. On Friday, it closed at 11.36% of the Nikkei 225, putting it well above the 10% cap level.</li>
<li>If the stock is above 10% on a pro-forma basis on the base date of 31 July 2024, it will get a capping coefficient. 8.4mm shares (US$2.5bn) to sell.</li>
<li>At Friday's close, we were borderline above a double-downweight trigger. At Monday's open, just below. 30mins later? Back well above. Lots of interesting issues and nuances here for a short.</li>
</ul>



Fast Retailing (9983 JP) is the largest weight in the Nikkei 225. On Friday, it closed at 11.36% of the Nikkei 225, putting it well above the 10% cap level.
If the stock is above 10% on a pro-forma basis on the base date of 31 July 2024, it will get a capping coefficient. 8.4mm shares (US$2.5bn) to sell.
At Friday's close, we were borderline above a double-downweight trigger. At Monday's open, just below. 30mins later? Back well above. Lots of interesting issues and nuances here for a short.


Fast Retailing (9983) - Now At Double Downweight Levels

<ul>
<li>
<a href="https://www.smartkarma.com/entities/zozo-inc" target="_blank" data-smartkarma-citation="entities:18379:1" rel="noopener">ZOZO Inc (3092 JP)</a> is +10% since the close after the Nikkei 225 inclusion announcement vs Nikkei225 +2%. Fellow upweight Nitori is up too. Disco and Socionext are up less.</li>
<li>All three inclusions and one upweight see considerable inclusion demand when compared to active holdings. Some more than others. </li>
<li>Some trades here are more interesting than others, still. Cumulative excess volumes are one guide. Fundamentals, and flow dynamics are another.</li>
</ul>



ZOZO Inc (3092 JP) is +10% since the close after the Nikkei 225 inclusion announcement vs Nikkei225 +2%. Fellow upweight Nitori is up too. Disco and Socionext are up less.
All three inclusions and one upweight see considerable inclusion demand when compared to active holdings. Some more than others. 
Some trades here are more interesting than others, still. Cumulative excess volumes are one guide. Fundamentals, and flow dynamics are another.


Mar24 Nikkei 225 Rebal: Zozo (3092) And Other ADDs Update

Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Thematic (Sector/Industry)

<ul>
<li>E-Commerce growth slowed marginally as the sector consolidated post-Covid but remained higher than any other channel in 2022. </li>
<li>By 2025-26, it will be the largest channel, overtaking convenience stores – but Japan’s continuing support for retail stores means that omnichannel will be the main model.</li>
<li>As a result, the majority of transactions will be researched, initiated, and fulfilled through a combination of online and physical stores.</li>
</ul>


E-Commerce growth slowed marginally as the sector consolidated post-Covid but remained higher than any other channel in 2022. 
By 2025-26, it will be the largest channel, overtaking convenience stores – but Japan’s continuing support for retail stores means that omnichannel will be the main model.
As a result, the majority of transactions will be researched, initiated, and fulfilled through a combination of online and physical stores.


E-Commerce in Japan: Omnichannel Consolidation

Japan

RYOHIN KEIKAKU CO., LTD. is a retailer and wholesaler of Mujirushi Ryohin brand products, which were originally a generic private-brand product.  The Company's product line includes knitwear, food, and household items

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
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Ryohin Keikaku (7453 JP)

Nikkei 225 Index Rebalance Preview (Sep 2024): Ranking, Capping, Funding & Other Changes

There could be 3 changes for the NKY in September with sector balance determining the inclusions. Fast Retailing will be capped while Tokyo...

Brian Freitas

Last Week in Event SPACE: Mitsui Fudosan, Melco, Aozora Bank, CGN New Energy

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Fast Retailing (9983) - Now At Double Downweight Levels

Now clearly into double-sell territory but nota bene: A double sell only works for the first couple of %, then we're back into single-sell...

Travis Lundy

Mar24 Nikkei 225 Rebal: Zozo (3092) And Other ADDs Update

The Mar24 N225 rebal has 5 days to run. So far, 3 of 4 stocks ADDed or UPweighted are up vs N225. DELETEs are down. There is a big funding sell....

Travis Lundy

E-Commerce in Japan: Omnichannel Consolidation

E-commerce growth in Japan remains strong post-Covid, set to overtake convenience stores by 2025-26, with omnichannel model becoming dominant for...

Michael Causton

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Nikkei 225 Index Rebalance Preview (Sep 2024): Ranking, Capping, Funding & Other Changes

There could be 3 changes for the NKY in September with sector balance determining the inclusions. Fast Retailing will be capped while Tokyo...

Brian Freitas

Last Week in Event SPACE: Mitsui Fudosan, Melco, Aozora Bank, CGN New Energy

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Fast Retailing (9983) - Now At Double Downweight Levels

Now clearly into double-sell territory but nota bene: A double sell only works for the first couple of %, then we're back into single-sell...

Travis Lundy

Mar24 Nikkei 225 Rebal: Zozo (3092) And Other ADDs Update

The Mar24 N225 rebal has 5 days to run. So far, 3 of 4 stocks ADDed or UPweighted are up vs N225. DELETEs are down. There is a big funding sell....

Travis Lundy

E-Commerce in Japan: Omnichannel Consolidation

​E-commerce growth in Japan remains strong post-Covid, set to overtake convenience stores by 2025-26, with omnichannel model becoming dominant for...

Michael Causton

E-commerce growth in Japan remains strong post-Covid, set to overtake convenience stores by 2025-26, with omnichannel model becoming dominant for...