Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>The Tokyo Stock Exchange (TSE) calculates Free-Float Weight (FFW) for each listed company and uses this value as a key component of TOPIX Index Calculation.</li>
<li>For companies with "low liquidity" the FFW will be multiplied by a fixed liquidity factor of 0.75 to derive the final FFW used for index calculation.</li>
<li>Every April, the application of this liquidity factor is reviewed by the TSE. In this insight, we take an early look at what could happen in April 2025.</li>
</ul>


The Tokyo Stock Exchange (TSE) calculates Free-Float Weight (FFW) for each listed company and uses this value as a key component of TOPIX Index Calculation.
For companies with "low liquidity" the FFW will be multiplied by a fixed liquidity factor of 0.75 to derive the final FFW used for index calculation.
Every April, the application of this liquidity factor is reviewed by the TSE. In this insight, we take an early look at what could happen in April 2025.


TOPIX Index Upweights: An Early Preview Of "The Big April Basket" 2025

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>
<a href="https://www.smartkarma.com/entities/jx-advanced-metals-corporation" target="_blank" data-smartkarma-citation="entities:44346:1" rel="noopener">JX Advanced Metals (5016 JP)</a>'s listing has been approved by the JPX and the stock is expected to start trading on the Prime Market from 19 March.</li>
<li>At the indicative IPO price of JPY 862/share, <a href="https://www.smartkarma.com/entities/jx-advanced-metals-corporation" target="_blank" data-smartkarma-citation="entities:44346:1" rel="noopener">JX Advanced Metals (5016 JP)</a> will be valued at JPY 800bn (US$5.25bn).</li>
<li>The stock should be added to the <a href="https://www.smartkarma.com/entities/tokyo-stock-exchange-tokyo-price-index-topix" target="_blank" data-smartkarma-citation="entities:22910:1" rel="noopener">TOPIX INDEX</a> at the close on 28 April while timing of inclusion in global indices will depend on domestic/overseas allocations and price moves.</li>
</ul>



JX Advanced Metals (5016 JP)'s listing has been approved by the JPX and the stock is expected to start trading on the Prime Market from 19 March.
At the indicative IPO price of JPY 862/share, JX Advanced Metals (5016 JP) will be valued at JPY 800bn (US$5.25bn).
The stock should be added to the TOPIX INDEX at the close on 28 April while timing of inclusion in global indices will depend on domestic/overseas allocations and price moves.


JX Advanced Metals (5016 JP) IPO: TPX Add in April; Global Idx: One in August; One in March or Sep

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

<ul>
<li>You could label <a href="https://www.smartkarma.com/entities/kyocera-corp" target="_blank" data-smartkarma-citation="entities:753:1" rel="noopener">Kyocera Corp (6971 JP)</a>"BULLISH" because the stock goes up rather than down; but you could easily label this BEARISH because the prospects aren't exciting.</li>
<li>
<a href="https://www.smartkarma.com/entities/wh-group-ltd" target="_blank" data-smartkarma-citation="entities:13200:1" rel="noopener">WH Group (288 HK)</a>spins off <a href="https://www.smartkarma.com/entities/smithfield-foods-inc" target="_blank" data-smartkarma-citation="entities:44251:1" rel="noopener">Smithfield Foods (SFD US)</a> - below the prior expected price range.  Pricing looks full here.</li>
<li>As <a href="https://www.smartkarma.com/entities/china-national-building-ma-h" target="_blank" data-smartkarma-citation="entities:184:1" rel="noopener">China National Building Material (3323 HK)</a>'s Partial Offer heads towards the pointy end, do you buy, and/or borrow, and tender; short outright; or short tender?</li>
</ul>


You could label Kyocera Corp (6971 JP)"BULLISH" because the stock goes up rather than down; but you could easily label this BEARISH because the prospects aren't exciting.

WH Group (288 HK)spins off Smithfield Foods (SFD US) - below the prior expected price range.  Pricing looks full here.
As China National Building Material (3323 HK)'s Partial Offer heads towards the pointy end, do you buy, and/or borrow, and tender; short outright; or short tender?


Last Week in Event SPACE: Kyocera, WH Group/Smithfield, CNBM, Japan Eyewear, Core Concept Tech

Index Rebalance

Japan Eyewear Holdings   / Index Rebalance

<ul>
<li>Quiddity's "Who is Ready" series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.</li>
<li>
<a href="https://www.smartkarma.com/entities/japan-eyewear-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:40217:1" rel="noopener">Japan Eyewear Holdings (5889 JP)</a> and <a href="https://www.smartkarma.com/entities/core-concept-technologies-inc" target="_blank" data-smartkarma-citation="entities:34323:1" rel="noopener">Core Concept Technologies Inc (4371 JP)</a> continue to be in our watchlist of pre-event candidates for TOPIX Inclusions.</li>
<li>Separately, the TOPIX Liquidity factor removal event will take place in April 2025 and there could be some positive index flows for <a href="https://www.smartkarma.com/entities/tokyo-metro-co-ltd" target="_blank" data-smartkarma-citation="entities:40930:1" rel="noopener">Tokyo Metro (9023 JP)</a> during this event.</li>
</ul>


Quiddity's "Who is Ready" series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.

Japan Eyewear Holdings (5889 JP) and Core Concept Technologies Inc (4371 JP) continue to be in our watchlist of pre-event candidates for TOPIX Inclusions.
Separately, the TOPIX Liquidity factor removal event will take place in April 2025 and there could be some positive index flows for Tokyo Metro (9023 JP) during this event.


TOPIX Inclusions: Who Is Ready (Feb 2025)

Equity Derivatives Broker - Delta One Japan, Vantage Capital Markets Japan

François-Xavier Pustoc'h

Equity Derivatives Broker - Delta One Japan

Independent Financial Broker

Vantage Capital Markets Japan

We provide world class financial solutions to our extensive institutional client base including rapidly growing corporations, leading investment banks, commercial banks, asset managers, private equity funds, family offices and hedge funds.

Our services include capital market offerings and placements, wholesale brokerage and execution of cash and derivative products (both listed and OTC) across a range of asset classes.

VCM has offices in London, Hong Kong, Tokyo and Dubai from where we service our global client base. Our strength lies in the experience and quality of our teams, supported by excellent operations and infrastructure.

<ul>
<li>Rebalancing Candidates ADD: Kokusai Electric Corp (6525.T): High Liquidity Group TOP 75, BayCurrent Inc (6532.T), Shift Inc (3697.T)</li>
<li>Rebalancing Candidates DEL: Mitsubishi Logistics Corp. (9301.T), Okuma Corp. (6103.T), Tokuyama Corp (4043.T)</li>
<li>Capping Ratio: Fast Retailing Co Ltd (9983.T)’s Price Adjustment Factor from 2.7 to 2.4</li>
</ul>


Rebalancing Candidates ADD: Kokusai Electric Corp (6525.T): High Liquidity Group TOP 75, BayCurrent Inc (6532.T), Shift Inc (3697.T)
Rebalancing Candidates DEL: Mitsubishi Logistics Corp. (9301.T), Okuma Corp. (6103.T), Tokuyama Corp (4043.T)
Capping Ratio: Fast Retailing Co Ltd (9983.T)’s Price Adjustment Factor from 2.7 to 2.4


Nikkei 225 Stock Average Rebalancing – January 2025

Japan

Tokyo Metro Co., Ltd. operates railway businesses. The Company conducts passenger rail transportation, urban design and lifestyle creation, real estate, and other projects. Tokyo Metro serves customers in Japan.

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Tokyo Metro (9023 JP)

TOPIX Index Upweights: An Early Preview Of "The Big April Basket" 2025

The base date for the April 2025 Liquidity Factor Removal calculations is 28th February 2025. Until then, share price movements could cause names...

Janaghan Jeyakumar, CFA

JX Advanced Metals (5016 JP) IPO: TPX Add in April; Global Idx: One in August; One in March or Sep

JXAM will list on the JPX on 19 Mar after raising US$2.62-3bn and valuing the company at US$5.25bn. TOPIX inclusion in April. One global index...

Brian Freitas

Last Week in Event SPACE: Kyocera, WH Group/Smithfield, CNBM, Japan Eyewear, Core Concept Tech

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

TOPIX Inclusions: Who Is Ready (Feb 2025)

There are currently 85 names that satisfy all 5 key Segment Transfer requirements based on current data. Another 89 names can satisfy 4 out of 5...

Janaghan Jeyakumar, CFA

Nikkei 225 Stock Average Rebalancing – January 2025

As per the “Periodic Review” conducted twice a year by Nikkei Inc. (Nikkei), the constituents of Nikkei 225 will be reviewed and changed at the end...

Vantage Capital Markets Japan

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