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

NTT (Nippon Telegraph & Telephone) / Event-Driven

<ul>
<li>The third tranche of the FFW methodology change for 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">Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX)</a> will be implemented at the close of trading on 29 June.</li>
<li>One-Way flow is ~JPY 742bn and will be spread across 2170 stocks. The largest inflow will be on <a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (9432 JP)</a> and the largest outflow on <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a>.</li>
<li>Stocks with the largest impact of inflows have outperformed stocks with the largest impact of outflows, but there has been underperformance over the last couple of weeks.</li>
</ul>


The third tranche of the FFW methodology change for the Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX) will be implemented at the close of trading on 29 June.
One-Way flow is ~JPY 742bn and will be spread across 2170 stocks. The largest inflow will be on NTT (9432 JP) and the largest outflow on Toyota Motor (7203 JP).
Stocks with the largest impact of inflows have outperformed stocks with the largest impact of outflows, but there has been underperformance over the last couple of weeks.


TOPIX Rebalance: Flows at the Close on 29 June

Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

<ul>
<li>I would like to discuss this issue because demographics is a very important factor for investment, regardless of whether the issue is directly related to ESG or not.</li>
<li>The government has avoided discussing this issue. The bill for years of neglect in creating environment in which people can safely give birth and raise children is already becoming apparent.</li>
<li>This is the same idea that Japanese management should seriously discuss with investors their vision for future growth, which means that both the government and companies face the same issues.</li>
</ul>


I would like to discuss this issue because demographics is a very important factor for investment, regardless of whether the issue is directly related to ESG or not.
The government has avoided discussing this issue. The bill for years of neglect in creating environment in which people can safely give birth and raise children is already becoming apparent.
This is the same idea that Japanese management should seriously discuss with investors their vision for future growth, which means that both the government and companies face the same issues.


The Declining Birthrate Makes Us Think About Japan's Tendency to Postpone Problems

<ul>
<li>The Nikkei published an article titled "Share Buyback Program Doubles to 4.2 Trillion Yen." I would like to discuss the issues in the article.</li>
<li>I'm concerned that the increased disclosure of share repurchases prior to the June shareholders' meeting may be a way for management to avoid discussing the path to growth with shareholders.</li>
<li>If many companies avoid that discussion and disclose share repurchases for the purpose of ending the AGMs without turbulence, then the question is whether management has a long-term business vision.</li>
</ul>


The Nikkei published an article titled "Share Buyback Program Doubles to 4.2 Trillion Yen." I would like to discuss the issues in the article.
I'm concerned that the increased disclosure of share repurchases prior to the June shareholders' meeting may be a way for management to avoid discussing the path to growth with shareholders.
If many companies avoid that discussion and disclose share repurchases for the purpose of ending the AGMs without turbulence, then the question is whether management has a long-term business vision.


Isn't the Reason for More Share Buyback Disclosures Before the AGMs to Avoid Discussion by Managers?

<ul>
<li>I would like to discuss the points on the Nikkei article, "Acceleration of Share Buybacks Suggests Undervaluation."</li>
<li>Companies should clarify their capital allocations policy. My analysis shows that companies that raised valuations could articulate capital allocation policies and communicate with investors on growth investment and shareholder returns.</li>
<li>Since information asymmetries between managers and investors exist, attention should be paid to capital allocation. My analysis shows that companies that retired treasury stock 3 or more-times have higher valuations.</li>
</ul>


I would like to discuss the points on the Nikkei article, "Acceleration of Share Buybacks Suggests Undervaluation."
Companies should clarify their capital allocations policy. My analysis shows that companies that raised valuations could articulate capital allocation policies and communicate with investors on growth investment and shareholder returns.
Since information asymmetries between managers and investors exist, attention should be paid to capital allocation. My analysis shows that companies that retired treasury stock 3 or more-times have higher valuations.


Certainly the Increase in Share Repurchases Is to Be Commended, But......

<ul>
<li>Î will discuss the issues on the Nikkei article, that reports Japan's labor productivity is the lowest among the G7 countries, and that the "engagement."</li>
<li>I believe that the lack of wage increases for Japanese workers may not be linked to their enthusiasm for their jobs, showing the OECD data on average annual wages.</li>
<li>Conversely, given wages that are lower wages, well-developed social infrastructure, and a workforce capable of producing a high-quality product, some managers would want to take advantage of this business environment.</li>
</ul>


Î will discuss the issues on the Nikkei article, that reports Japan's labor productivity is the lowest among the G7 countries, and that the "engagement."
I believe that the lack of wage increases for Japanese workers may not be linked to their enthusiasm for their jobs, showing the OECD data on average annual wages.
Conversely, given wages that are lower wages, well-developed social infrastructure, and a workforce capable of producing a high-quality product, some managers would want to take advantage of this business environment.


Why Japan's Labor Productivity and Engagement Index Is Low in International Comparisons?

Japan

The TOPIX, also known as the Tokyo Stock Price Index, is a capitalization-weighted index of all companies listed on the First Section of the Tokyo Stock Exchange. The index is supplemented by the subindices of the 33 industry sectors. The index calculation excludes temporary issues and preferred stocks, and has a base value of 100 as of January 4, 1968.

TSE Tokyo Price Index TOPIX (TPX INDEX)

TOPIX Rebalance: Flows at the Close on 29 June

The third and final tranche of the FFW methodology change for the TOPIX Index will be implemented at the close of trading on 29 June. One way flow...

Brian Freitas

The Declining Birthrate Makes Us Think About Japan's Tendency to Postpone Problems

It seems that the problems facing the government and the company are similar in that they have avoided discussing and have postponed the issues.

Metrical Inc

Why Japan's Labor Productivity and Engagement Index Is Low in International Comparisons?

Î would like to discuss the issues on the Nikkei article, that Japan's labor productivity is the lowest among the G7 countries, and that Japan's...

Metrical Inc

TOPIX Rebalance: Flows at the Close on 29 June

The third and final tranche of the FFW methodology change for the TOPIX Index will be implemented at the close of trading on 29 June. One way flow...

Brian Freitas

The Declining Birthrate Makes Us Think About Japan's Tendency to Postpone Problems

It seems that the problems facing the government and the company are similar in that they have avoided discussing and have postponed the issues.

Metrical Inc

Isn't the Reason for More Share Buyback Disclosures Before the AGMs to Avoid Discussion by Managers?

I would like to discuss the additional Nikkei article on "share repurchase." I'm concerned that the increased disclosure of share repurchases prior...

Metrical Inc

Certainly the Increase in Share Repurchases Is to Be Commended, But......

I would like to discuss the points on the Nikkei article, "Acceleration of Share Buybacks Suggests Undervaluation," showing the previous analyses.

Metrical Inc

Why Japan's Labor Productivity and Engagement Index Is Low in International Comparisons?

Î would like to discuss the issues on the Nikkei article, that Japan's labor productivity is the lowest among the G7 countries, and that Japan's...

Metrical Inc