Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>Limited breadth of winners, even in the SOX, with numerous DeepSeek and capex questions outstanding.</li>
<li>Regardless expect JP SPE to be higher to start; watch Advantest into numbers today after its -19% 2-day drop.</li>
<li>IT/SaaS companies are worth a look here with AI R&amp;D costs now potentially much lower including Fujitsu and NEC.</li>
</ul>


Limited breadth of winners, even in the SOX, with numerous DeepSeek and capex questions outstanding.
Regardless expect JP SPE to be higher to start; watch Advantest into numbers today after its -19% 2-day drop.
IT/SaaS companies are worth a look here with AI R&amp;D costs now potentially much lower including Fujitsu and NEC.


Japan Morning Connection: US Tech and Semi Rebound Feel's like a Dead Cat Bounce

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 3 weeks. There could be one outright change and one or two others driven by sector balance.</li>
<li>
<a href="https://www.smartkarma.com/entities/shift-inc" target="_blank" data-smartkarma-citation="entities:7266:1" rel="noopener">Shift Inc (3697 JP)</a> will have a 15:1 stock split next week and that puts the stock in the list of potential inclusions over the next couple of rebalances.</li>
<li>The recent drop in <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>'s stock price will lead to a single step drop in the PAF. That means less passive selling and a smaller funding buy.</li>
</ul>


The review period for the Nikkei 225 Index March rebalance ends in 3 weeks. There could be one outright change and one or two others driven by sector balance.

Shift Inc (3697 JP) will have a 15:1 stock split next week and that puts the stock in the list of potential inclusions over the next couple of rebalances.
The recent drop in Fast Retailing (9983 JP)'s stock price will lead to a single step drop in the PAF. That means less passive selling and a smaller funding buy.


Nikkei 225 Index Rebalance Preview (Mar 2025): SHIFT Splits; Updated Ranking, Capping & Funding

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>LVC sits a blocking stake ahead of <a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a>'s shareholder vote on the 22nd Janaury. I've yet to see a solid rationality why they would block.</li>
<li>
<a href="https://www.smartkarma.com/entities/malaysia-airports-holdings-bhd" target="_blank" data-smartkarma-citation="entities:117:1" rel="noopener">Malaysia Airports Holdings (MAHB MK)</a>extends the closing date to the 24th January. Shares held plus tendering is currently 86.18%. This is done.</li>
<li>
<a href="https://www.smartkarma.com/entities/kokusai-electric-corp" target="_blank" data-smartkarma-citation="entities:40152:1" rel="noopener">Kokusai Electric (6525 JP)</a> was IPOed in September 2023. Lockup expiry is next week, and there is a likely large index event in ~10 weeks</li>
</ul>


LVC sits a blocking stake ahead of Shanghai Henlius Biotech (2696 HK)'s shareholder vote on the 22nd Janaury. I've yet to see a solid rationality why they would block.

Malaysia Airports Holdings (MAHB MK)extends the closing date to the 24th January. Shares held plus tendering is currently 86.18%. This is done.

Kokusai Electric (6525 JP) was IPOed in September 2023. Lockup expiry is next week, and there is a likely large index event in ~10 weeks


Last Week In Event SPACE: Shanghai Henlius, Malaysia Airports, Kokusai Electric, Smart Share

Japan Specialist

Mark Chadwick

<ul>
<li>The Nikkei Stock Average declined 738 yen (1.9%) in the second week of January as heavy-weight stocks sell-off</li>
<li>Nintendo (7974 JP) ended the trading week marginally higher by 0.7% after a partial unveiling of its new Swich 2 Console. Less earnings cyclicality, but less upside?</li>
<li>The BoJ looks set to lift interest rates again next week, unless market turbulence following Trump's  inauguration, delays the inevitable</li>
</ul>


The Nikkei Stock Average declined 738 yen (1.9%) in the second week of January as heavy-weight stocks sell-off
Nintendo (7974 JP) ended the trading week marginally higher by 0.7% after a partial unveiling of its new Swich 2 Console. Less earnings cyclicality, but less upside?
The BoJ looks set to lift interest rates again next week, unless market turbulence following Trump's  inauguration, delays the inevitable


Japan Strategy Weekly | Nintendo’s Switch and Trump’s Return

Travis Lundy

<ul>
<li>
<a href="https://www.smartkarma.com/entities/baycurrent-consulting-inc" target="_blank" data-smartkarma-citation="entities:25985:1" rel="noopener">BayCurrent Consulting (6532 JP)</a> is a high-growth consulting company. This year sees 22% annual revenue growth and 25% OP growth to Feb 2025. Q3 results come out tomorrow.</li>
<li>The stock has a fairly large and concentrated active institutional holder base, though interestingly, the foreign active insto base is very long-tailed. LOTS of investors hold this.</li>
<li>The company is likely to see an index inclusion imminently which will over time mean a buy of more than a third of Maximum Real World Float. </li>
</ul>



BayCurrent Consulting (6532 JP) is a high-growth consulting company. This year sees 22% annual revenue growth and 25% OP growth to Feb 2025. Q3 results come out tomorrow.
The stock has a fairly large and concentrated active institutional holder base, though interestingly, the foreign active insto base is very long-tailed. LOTS of investors hold this.
The company is likely to see an index inclusion imminently which will over time mean a buy of more than a third of Maximum Real World Float. 


BayCurrent Consulting (6532) - High Growth, OK Multiple, Big Index Inclusion Coming Up?

Japan

SHIFT Inc. offers information technology outsourcing services. The Company provides outsourcing software testing services to corporations and individual clients. SHIFT also provides software solutions and consulting services, as well as educational classes and programs.

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Shift Inc (3697 JP)

Japan Morning Connection: US Tech and Semi Rebound Feel's like a Dead Cat Bounce

Opportunities to watch for higher JP SPE, keep an eye on Advantest after recent drop. IT/SaaS companies like Fujitsu and NEC worth looking at with...

Andrew Jackson

Nikkei 225 Index Rebalance Preview (Mar 2025): SHIFT Splits; Updated Ranking, Capping & Funding

With 4 days left in the review period, Fast Retailing is now in double capping zone which would require passives to sell 13.3m shares in March. If...

Brian Freitas

Japan Strategy Weekly | Nintendo’s Switch and Trump’s Return

Nikkei Stock Average drops due to heavy-weight stock sell-off, Nintendo sees slight gain with new console unveiling, BoJ likely to raise interest...

Mark Chadwick

BayCurrent Consulting (6532) - High Growth, OK Multiple, Big Index Inclusion Coming Up?

As it gets bigger, BayCurrent Consulting has seen its growth slow somewhat, but Consensus suggests 18% CAGR for revenue, EBIT, and NetInc the next...

Travis Lundy

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Japan Morning Connection: US Tech and Semi Rebound Feel's like a Dead Cat Bounce

Opportunities to watch for higher JP SPE, keep an eye on Advantest after recent drop. IT/SaaS companies like Fujitsu and NEC worth looking at with...

Andrew Jackson

Nikkei 225 Index Rebalance Preview (Mar 2025): SHIFT Splits; Updated Ranking, Capping & Funding

With 4 days left in the review period, Fast Retailing is now in double capping zone which would require passives to sell 13.3m shares in March. If...

Brian Freitas

Last Week In Event SPACE: Shanghai Henlius, Malaysia Airports, Kokusai Electric, Smart Share

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

Japan Strategy Weekly | Nintendo’s Switch and Trump’s Return

​Nikkei Stock Average drops due to heavy-weight stock sell-off, Nintendo sees slight gain with new console unveiling, BoJ likely to raise interest...

Mark Chadwick

BayCurrent Consulting (6532) - High Growth, OK Multiple, Big Index Inclusion Coming Up?

As it gets bigger, BayCurrent Consulting has seen its growth slow somewhat, but Consensus suggests 18% CAGR for revenue, EBIT, and NetInc the next...

Travis Lundy

Nikkei Stock Average drops due to heavy-weight stock sell-off, Nintendo sees slight gain with new console unveiling, BoJ likely to raise interest...