Insurance & Central Asia-focused Analyst, KT Capital Group

Alec Tseung

Insurance & Central Asia-focused Analyst

KT Capital Group

Principal investments and advisory firm that focuses on connecting the CIS countries with East Asia.

Principal investments and advisory firm

Equity Bottom-Up

<ul>
<li>Japan Post Insurance might seem undervalued based on a regression analysis, but its relatively strong RoE was due to extraordinary gains.</li>
<li>The company has a much larger portion of its investment securities being carried at cost on the balance sheet vs. its peer, Dai-ichi Life.  </li>
<li>Against the backdrop of Japan's "higher for longer" theme, its embedded value growth could be under more pressure due to ANW's m-t-m adjustments and very weak new business value.</li>
</ul>


Japan Post Insurance might seem undervalued based on a regression analysis, but its relatively strong RoE was due to extraordinary gains.
The company has a much larger portion of its investment securities being carried at cost on the balance sheet vs. its peer, Dai-ichi Life.  
Against the backdrop of Japan's "higher for longer" theme, its embedded value growth could be under more pressure due to ANW's m-t-m adjustments and very weak new business value.


Japan Post Insurance: Embedded Value Unlikely to Benefit from a Rate Increase

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The JIP TOB for <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba (6502 JP)</a> is here. Finally. It's still too low. Since the announcement, when it was too low, peers are up a lot, and memory looks healthier.</li>
<li>
<a href="https://www.smartkarma.com/entities/hongkong-land-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15465:1" rel="noopener">Hongkong Land (HKL SP)</a> selling Three Exchange Square sounds purely speculative. At best. But it would have a bigly impact on Hong Kong Office sentiment if true. </li>
<li>
<a href="https://www.smartkarma.com/entities/inpex-corp" target="_blank" data-smartkarma-citation="entities:20665:1" rel="noopener">Inpex (1605 JP)</a> reported 1H results, a change in forecasts, and a bigly buyback. The mechanics are the same. The impact is a bit different, but it's worth looking at.</li>
</ul>


The JIP TOB for Toshiba (6502 JP) is here. Finally. It's still too low. Since the announcement, when it was too low, peers are up a lot, and memory looks healthier.

Hongkong Land (HKL SP) selling Three Exchange Square sounds purely speculative. At best. But it would have a bigly impact on Hong Kong Office sentiment if true. 

Inpex (1605 JP) reported 1H results, a change in forecasts, and a bigly buyback. The mechanics are the same. The impact is a bit different, but it's worth looking at.


Last Week in Event SPACE: Toshiba, Hongkong Land, Inpex, L'Occitane

Travis Lundy

Index Rebalance

<ul>
<li>The Tenth Annual JPX Nikkei 400 Index Review was announced on Monday 7 August. There are 38 Inclusions, 36 Deletions. They are mostly in line with <a href="https://www.smartkarma.com/profiles/janaghan-jeyakumar-cfa" target="_blank" data-smartkarma-citation="accounts:3173" rel="noopener">Janaghan Jeyakumar, CFA</a>'s predictions.</li>
<li>The BIG SELL is <a href="https://www.smartkarma.com/entities/t-d-holdings-inc" target="_blank" data-smartkarma-citation="entities:3431:1" rel="noopener">T&amp;D Holdings (8795 JP)</a>, which surprised me. The top BUY is <a href="https://www.smartkarma.com/entities/rohm-co-ltd" target="_blank" data-smartkarma-citation="entities:2953:1" rel="noopener">ROHM Co Ltd (6963 JP)</a> which was not on the Quiddity Leaderboard.</li>
<li>Otherwise, the ADDs and DELETEs are 1.8-2.0 days of ADV, there are several NEW CAPs and some RECAPS among LARGE CAPS</li>
</ul>


The Tenth Annual JPX Nikkei 400 Index Review was announced on Monday 7 August. There are 38 Inclusions, 36 Deletions. They are mostly in line with Janaghan Jeyakumar, CFA's predictions.
The BIG SELL is T&amp;D Holdings (8795 JP), which surprised me. The top BUY is ROHM Co Ltd (6963 JP) which was not on the Quiddity Leaderboard.
Otherwise, the ADDs and DELETEs are 1.8-2.0 days of ADV, there are several NEW CAPs and some RECAPS among LARGE CAPS


2023 JPX Nikkei 400 Rebal - 38 IN, 36 OUT, 4.2% One Way Flow

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

<ul>
<li>There are 38 adds/36 deletes for the JPX Nikkei 400 Index to bring the number of index constituents back to 400. There are stocks with multiple days ADV to trade.</li>
<li>Based on the adds, deletes and capping changes, we estimate one way turnover of 4.35% and a two-way trade of JPY 461bn (US$3.24bn).</li>
<li>There are a few stocks that will have same way flow from other index trackers within a few weeks of the JPX Nikkei 400 Index rebalance.</li>
</ul>


There are 38 adds/36 deletes for the JPX Nikkei 400 Index to bring the number of index constituents back to 400. There are stocks with multiple days ADV to trade.
Based on the adds, deletes and capping changes, we estimate one way turnover of 4.35% and a two-way trade of JPY 461bn (US$3.24bn).
There are a few stocks that will have same way flow from other index trackers within a few weeks of the JPX Nikkei 400 Index rebalance.


JPX Nikkei 400 Index Rebalance: Some Big Impact Names

Equity Capital Markets

<ul>
<li>Today after the close, <a href="https://www.smartkarma.com/entities/kansai-paint-co-ltd" target="_blank" data-smartkarma-citation="entities:13340:1" rel="noopener">Kansai Paint (4613 JP)</a> announced a passel of crossholders would sell 26.2mm shares in a Secondary Offer. They also announced a buyback. </li>
<li>The buyback, spending up to ¥12bn to buy back up to 8.2mm shares, starts after the Offering is delivered, and extends until 15 March 2024.</li>
<li>This offering reduces cross-holder "strategic holdings" by a third. This will impact FFW. Complicated index impacts will occur over time.</li>
</ul>


Today after the close, Kansai Paint (4613 JP) announced a passel of crossholders would sell 26.2mm shares in a Secondary Offer. They also announced a buyback. 
The buyback, spending up to ¥12bn to buy back up to 8.2mm shares, starts after the Offering is delivered, and extends until 15 March 2024.
This offering reduces cross-holder "strategic holdings" by a third. This will impact FFW. Complicated index impacts will occur over time.


Kansai Paint (4613 JP) Secondary Offering & Buyback and All the Subsequent Flows

Japan

T&D Holdings, Inc. is a holding company established through the merger of Taiyo Life Insurance, Daido Life Insurance, and T&D Financial Life Insurance. The Company manages life insurance operations for its subsidiaries.

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T&D Holdings (8795 JP)

Japan Post Insurance: Embedded Value Unlikely to Benefit from a Rate Increase

Japan Post Insurance's share price has come down by c. 10% since its peak when the note was published in mid. Nov. underperforming both the broader...

Alec Tseung

Last Week in Event SPACE: Toshiba, Hongkong Land, Inpex, L'Occitane

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

2023 JPX Nikkei 400 Rebal - 38 IN, 36 OUT, 4.2% One Way Flow

The annual JPX Nikkei 400 Rebalance is here. 38 names in, 36 names out. 4.2% one-way flow. The basket normally trades well for several days, then...

Travis Lundy

JPX Nikkei 400 Index Rebalance: Some Big Impact Names

There are 38 adds and 36 deletes for the JPXNK400 Index. The adds have outperformed the deletes and there is a fair bit to trade on a lot of...

Brian Freitas

Kansai Paint (4613 JP) Secondary Offering & Buyback and All the Subsequent Flows

Kansai Paint is doing the good governance thing by unwinding crossholdings, and encouraging its crossholders to unwind. It has been buying back...

Travis Lundy

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