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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kioxia-holdings-corp" target="_blank" data-smartkarma-citation="entities:29243:1" rel="noopener">Kioxia Holdings (285A JP)</a>'s listing has been approved by the JPX and the stock is expected to start trading on the Prime Market from 18 December.</li>
<li>At the mid-point of the IPO price range of JPY 1390-1520/share, <a href="https://www.smartkarma.com/entities/kioxia-holdings-corp" target="_blank" data-smartkarma-citation="entities:29243:1" rel="noopener">Kioxia Holdings (285A JP)</a> will be valued at JPY 784bn (US$5.24bn).</li>
<li>
<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</a> inclusion will take place in January while inclusion in global indices is likely to take place in May and June. Selling stock to increase float will be an overhang.</li>
</ul>



Kioxia Holdings (285A JP)'s listing has been approved by the JPX and the stock is expected to start trading on the Prime Market from 18 December.
At the mid-point of the IPO price range of JPY 1390-1520/share, Kioxia Holdings (285A JP) will be valued at JPY 784bn (US$5.24bn).

TOPIX inclusion will take place in January while inclusion in global indices is likely to take place in May and June. Selling stock to increase float will be an overhang.


Kioxia (285A) IPO: Index Entry Timeline & Overhang from Plans to Increase Float

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

TSE Tokyo Price Index TOPIX / Event-Driven

<ul>
<li>A Bloomberg article mid-day suggested Japan's Ministry of Health, Labour and Welfare proposed a new "wage growth +1.9%" (vs 1.7% now) return bogey for the US$1.7trln Government Pension Investment Fund. </li>
<li>The GPIF is conducting its quinquennial review to assess markets, long-term prospects, correlations, etc, to set a CAPM asset allocation mix to meet the bogey.</li>
<li>The combination of higher USDJPY, Japan inflation, wider valuation spreads, and the prospect of higher yen rates suggests the review might result in lower yen bond allocs, higher equity allocs.</li>
</ul>


A Bloomberg article mid-day suggested Japan's Ministry of Health, Labour and Welfare proposed a new "wage growth +1.9%" (vs 1.7% now) return bogey for the US$1.7trln Government Pension Investment Fund. 
The GPIF is conducting its quinquennial review to assess markets, long-term prospects, correlations, etc, to set a CAPM asset allocation mix to meet the bogey.
The combination of higher USDJPY, Japan inflation, wider valuation spreads, and the prospect of higher yen rates suggests the review might result in lower yen bond allocs, higher equity allocs.


Circumstances and GPIF Noises Could Mean Higher Equity Allocations In March 2025

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>Since there's little confidence that merely disclosed share buybacks and medium-term management plans will increase corporate value in future, it's natural that institutional investors' evaluation of these plans is low.</li>
<li>For companies that develop budgets and plans each January, the key is to incorporate into their budgets the use of cash that will ensure future growth in corporate value.</li>
<li>For companies that lack the time to translate “mid-term management plan” into strategy to increase corporate value within two months, including “going private is an option” is an effective disclosure.</li>
</ul>


Since there's little confidence that merely disclosed share buybacks and medium-term management plans will increase corporate value in future, it's natural that institutional investors' evaluation of these plans is low.
For companies that develop budgets and plans each January, the key is to incorporate into their budgets the use of cash that will ensure future growth in corporate value.
For companies that lack the time to translate “mid-term management plan” into strategy to increase corporate value within two months, including “going private is an option” is an effective disclosure.


P/B Reform: Effective Disclosure to Include that “going Private" Is an Option

Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Cross Asset Strategy

<ul>
<li>A review of recent events/data impacting our investment themes or outlook</li>
<li>Revisiting some of our old favourites- China, Japan and Gold</li>
<li>Short-Term trades continue to work but investors only interested in US equities</li>
</ul>


A review of recent events/data impacting our investment themes or outlook
Revisiting some of our old favourites- China, Japan and Gold
Short-Term trades continue to work but investors only interested in US equities


Overview #13 - The US Dollar Peaks, Japan Struggles While China Treads Water

<ul>
<li>While female directors and nominating/compensation committee, for which TSE has specified specific goals, have made progress, foreign directors, for whom no specific goals have been set, have lagged behind.</li>
<li>Even now, with over 40% of companies with P/Bs below 1x and ROE not exceeding the cost of capital, not many companies moved to value-creating management with functioning corporate governance.</li>
<li>Nominating committee should make its selection, including whether to replace the incumbent director with another candidate. If it fails to do so, it's not fulfilling its responsibilities as nominating committee.</li>
</ul>


While female directors and nominating/compensation committee, for which TSE has specified specific goals, have made progress, foreign directors, for whom no specific goals have been set, have lagged behind.
Even now, with over 40% of companies with P/Bs below 1x and ROE not exceeding the cost of capital, not many companies moved to value-creating management with functioning corporate governance.
Nominating committee should make its selection, including whether to replace the incumbent director with another candidate. If it fails to do so, it's not fulfilling its responsibilities as nominating committee.


The Issue of Tenure Is Also Similar to the Issue of Concurrent Directorships

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)

Kioxia (285A) IPO: Index Entry Timeline & Overhang from Plans to Increase Float

Kioxia will list on the JPX on 18 Dec with a market cap of US$5-5.5bn. There will be a few index inclusions from Jan to June. The tradable share...

Brian Freitas

Circumstances and GPIF Noises Could Mean Higher Equity Allocations In March 2025

Circumstances (USDJPY, better governance, accretion, higher US valuations) suggested the GPIF might raise domestic equity allocations during the...

Travis Lundy

P/B Reform: Effective Disclosure to Include that “going Private" Is an Option

I would like to discuss the issues on the October 30 Nikkei article, “P/B Reform, Next ‘No Disclosure’: Aligning with Investors' Expectations and...

Metrical Inc

Overview #13 - The US Dollar Peaks, Japan Struggles While China Treads Water

A review of recent events/data impacting our investment themes and outlook. We look at the some recent trends in China, Japan and the USD

Rikki Malik

The Issue of Tenure Is Also Similar to the Issue of Concurrent Directorships

I would like to discuss the issues on the October 29th Nikkei Newspaper article, “Metabolism of the Board of Directors.”

Metrical Inc