Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The Sep24 Nikkei 225 Review Results are out, discussed in <a href="https://www.smartkarma.com/insights/sep24-nikkei-225-review-results-a-slightly-baffling-2-in-2-out" target="_blank" data-smartkarma-citation="insights:157890" rel="noopener">Sep24 Nikkei 225 Review Results:  A Slightly Baffling 2 IN, 2 OUT</a>. </li>
<li>That lets us move to Mar25 Nikkei 225 Rebal predictions. For the moment, I see 2 IN and 2 OUT, again. </li>
<li>And at the moment, another Fast Retailing capping exercise looks likely, for roughly US$3bn a side to trade.</li>
</ul>


The Sep24 Nikkei 225 Review Results are out, discussed in Sep24 Nikkei 225 Review Results:  A Slightly Baffling 2 IN, 2 OUT. 
That lets us move to Mar25 Nikkei 225 Rebal predictions. For the moment, I see 2 IN and 2 OUT, again. 
And at the moment, another Fast Retailing capping exercise looks likely, for roughly US$3bn a side to trade.


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

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 (NKY INDEX)</a> September rebalance ended yesterday. There could be three changes at the rebalance with sector balance in focus for the additions.</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>'s capping in the index has been confirmed and its index weight will drop by around 0.9% resulting in big selling at the close on 30 September. </li>
<li>Passive trackers will need to buy between 3.5-35x ADV (2.4%-24% of real float) on the inclusions and sell between 3.7-42.5x ADV on the deletions.</li>
</ul>


The review period for the Nikkei 225 (NKY INDEX) September rebalance ended yesterday. There could be three changes at the rebalance with sector balance in focus for the additions.

Fast Retailing (9983 JP)'s capping in the index has been confirmed and its index weight will drop by around 0.9% resulting in big selling at the close on 30 September. 
Passive trackers will need to buy between 3.5-35x ADV (2.4%-24% of real float) on the inclusions and sell between 3.7-42.5x ADV on the deletions.


Nikkei 225 Index Rebalance Preview (Sep 2024): Review Period Done; Fast Retailing Capping Confirmed

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<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> ’s share price has been down more than 50% YTD with the release of 1QFY08/2024 results in January 2024 which saw a drop in margins.</li>
<li>The company’s aggressive investment in HR and system reinforcement led to a decline in margins, however, margins saw a QoQ improvement in 2QFY08/2024.</li>
<li>Despite there being an improvement in 2Q and the company expecting the margins to bounce back in 4Q, Shift’s share price has continued to fall.</li>
</ul>



Shift Inc (3697 JP) ’s share price has been down more than 50% YTD with the release of 1QFY08/2024 results in January 2024 which saw a drop in margins.
The company’s aggressive investment in HR and system reinforcement led to a decline in margins, however, margins saw a QoQ improvement in 2QFY08/2024.
Despite there being an improvement in 2Q and the company expecting the margins to bounce back in 4Q, Shift’s share price has continued to fall.


<ul>
<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> reported 1QFY08/2024 results last week. Revenue and OP increased 29.5% and 0.4% YoY to ¥25.1bn and ¥1.8bn respectively.</li>
<li>Both revenue and OP were below consensus estimates which triggered a more than 25% drop in Shift’s share price over the last 5 days.</li>
<li>We think the weaknesses in the company’s 1Q earnings were temporary and we expect the company’s earnings to show recovery going forward</li>
</ul>



Shift Inc (3697 JP) reported 1QFY08/2024 results last week. Revenue and OP increased 29.5% and 0.4% YoY to ¥25.1bn and ¥1.8bn respectively.
Both revenue and OP were below consensus estimates which triggered a more than 25% drop in Shift’s share price over the last 5 days.
We think the weaknesses in the company’s 1Q earnings were temporary and we expect the company’s earnings to show recovery going forward


Shift: Market Overreacts to Temporary Dip in Earnings

<ul>
<li>Our conviction long <a href="https://www.smartkarma.com/entities/shift-inc" target="_blank" data-smartkarma-citation="entities:7266:1" rel="noopener">Shift Inc (3697 JP)</a> 's share price went up by more than 50% in 2023 driven by strong growth in top line alongside further improvement in margins.</li>
<li>The company’s margins fell in 2022 due to unprofitable projects, however, as these projects came to an end and the company being careful with projects, margins began to recover.</li>
<li>Shift’s share price has declined over the last few days which we think is temporary and offers an  opportunity to make an entry.  </li>
</ul>


Our conviction long Shift Inc (3697 JP) 's share price went up by more than 50% in 2023 driven by strong growth in top line alongside further improvement in margins.
The company’s margins fell in 2022 due to unprofitable projects, however, as these projects came to an end and the company being careful with projects, margins began to recover.
Shift’s share price has declined over the last few days which we think is temporary and offers an  opportunity to make an entry.  


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)

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

The Sep24 Nikkei 225 Review suggests Nikkei Index Committee "discretion" hinting at the scale of the next rebalance. The most interesting bit may...

Travis Lundy

Nikkei 225 Index Rebalance Preview (Sep 2024): Review Period Done; Fast Retailing Capping Confirmed

Review period ended yesterday. Fast Retailing's capping will result in a 0.9% drop in index weight. There could be 3 index changes with sector...

Brian Freitas

Shift: On a Road to Recovery

Shift's share price has been down more than 50% YTD due to a drop in the company's margins in 1QFY08/2024. There has been a notable improvement in...

Shifara Samsudeen, FCMA, CGMA

Shift: Market Overreacts to Temporary Dip in Earnings

Shift's 1QFY08/2024 revenues and operating profit fell below consensus which triggered a more than 25% drop in the company's share price over the...

Shifara Samsudeen, FCMA, CGMA

Shift: High Conviction Review 2023

Our conviction LONG Shift's share price surged over 50% in 2023. As we expected, completion of unprofitable projects and expansion into upstream...

Shifara Samsudeen, FCMA, CGMA

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

The Sep24 Nikkei 225 Review suggests Nikkei Index Committee "discretion" hinting at the scale of the next rebalance. The most interesting bit may...

Travis Lundy

Nikkei 225 Index Rebalance Preview (Sep 2024): Review Period Done; Fast Retailing Capping Confirmed

Review period ended yesterday. Fast Retailing's capping will result in a 0.9% drop in index weight. There could be 3 index changes with sector...

Brian Freitas

Shift: On a Road to Recovery

​Shift's share price has been down more than 50% YTD due to a drop in the company's margins in 1QFY08/2024. There has been a notable improvement in...

Shifara Samsudeen, FCMA, CGMA

Shift: Market Overreacts to Temporary Dip in Earnings

​Shift's 1QFY08/2024 revenues and operating profit fell below consensus which triggered a more than 25% drop in the company's share price over the...

Shifara Samsudeen, FCMA, CGMA

Shift: High Conviction Review 2023

Our conviction LONG ​Shift's share price surged over 50% in 2023. As we expected, completion of unprofitable projects and expansion into upstream...

Shifara Samsudeen, FCMA, CGMA

Shift's share price has been down more than 50% YTD due to a drop in the company's margins in 1QFY08/2024. There has been a notable improvement in...

Shift's 1QFY08/2024 revenues and operating profit fell below consensus which triggered a more than 25% drop in the company's share price over the...

Our conviction LONG Shift's share price surged over 50% in 2023. As we expected, completion of unprofitable projects and expansion into upstream...