Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

Shinko Electric Industries / Event-Driven

<ul>
<li>JPX-Nikkei 400 is composed of stocks listed on the Tokyo Stock Exchange selected based on multiple metrics relating to size, liquidity, financial performance, and corporate governance.</li>
<li>The annual rebalance of the JPX-Nikkei 400 Index takes place in August every year and the cut-off date for the data used for this rebalance is the end of June.</li>
<li>In this insight, we take a look at Quiddity's final predictions for Potential ADDs/DELs for the August 2022 review.</li>
</ul>


JPX-Nikkei 400 is composed of stocks listed on the Tokyo Stock Exchange selected based on multiple metrics relating to size, liquidity, financial performance, and corporate governance.
The annual rebalance of the JPX-Nikkei 400 Index takes place in August every year and the cut-off date for the data used for this rebalance is the end of June.
In this insight, we take a look at Quiddity's final predictions for Potential ADDs/DELs for the August 2022 review.


JPX-Nikkei 400 2022 Rebal: Final Predictions

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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.

<ul>
<li>Following the resignation of director Mariko Watahiki yesterday, the results for the shareholder votes are in for Toshiba. </li>
<li>Watahiki unsurprisingly had a low approval ratio of 65.87% but activist-linked directors also saw less than stellar approval ratios as did new CEO Taro Shimada. </li>
<li>Toshiba’s path forward looks increasingly murky and lofty valuations bid up on privatisation hopium look increasingly tenuous.</li>
</ul>


Following the resignation of director Mariko Watahiki yesterday, the results for the shareholder votes are in for Toshiba. 
Watahiki unsurprisingly had a low approval ratio of 65.87% but activist-linked directors also saw less than stellar approval ratios as did new CEO Taro Shimada. 
Toshiba’s path forward looks increasingly murky and lofty valuations bid up on privatisation hopium look increasingly tenuous.


Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

<ul>
<li>Every year, the yukashoken hokokusho shows a breakdown of share ownership by owner category. It only happens once a year for most companies. </li>
<li>It is a crucial input to knowing where the shares are and how people are positioned. It also shows who and how big is Real World Float.</li>
<li>This year's data shows a surprisingly small change year-on-year for Foreign Active Ownership, which is the biggest category. A little musical chairs, but no chairs removed. </li>
</ul>


Every year, the yukashoken hokokusho shows a breakdown of share ownership by owner category. It only happens once a year for most companies. 
It is a crucial input to knowing where the shares are and how people are positioned. It also shows who and how big is Real World Float.
This year's data shows a surprisingly small change year-on-year for Foreign Active Ownership, which is the biggest category. A little musical chairs, but no chairs removed. 


Toshiba (6502) Ownership Structure - "Hostage to Toshiba" Larger Than Real World Float

<ul>
<li>At last year’s Toshiba AGM we had an elected director resign because the sitting chairman was rejected. </li>
<li>This year we have another director resigning because two other directors weren’t rejected. </li>
<li>Now all we are really waiting for in this drama is for Kurumatani’s hitherto unknown identical twin, separated at birth, to show up with a plot for revenge or something…</li>
</ul>


At last year’s Toshiba AGM we had an elected director resign because the sitting chairman was rejected. 
This year we have another director resigning because two other directors weren’t rejected. 
Now all we are really waiting for in this drama is for Kurumatani’s hitherto unknown identical twin, separated at birth, to show up with a plot for revenge or something…


Toshiba – These Are The Days Of Our Lives

David Blennerhassett

<ul>
<li>There is a risk that the ¥7,000/share bid for <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a> gets pulled/lowered in Round 2 because of due diligence, conditionality, market environment, etc.</li>
<li>
<a href="https://www.smartkarma.com/entities/hutchison-telecommunications-hong-kong-holdings-limited" target="_blank" data-smartkarma-citation="entities:141:1" rel="noopener">Hutchison Telecommunications Hong Kong Holdings (215 HK)</a>'s share price was up 33% month to date, on triple the average daily volume. Then promptly sheds 23% on an even larger volume. </li>
<li>Even if one assumes that Softbank, Baba, and Cornerstones won’t sell, there is still 45% of <a href="https://www.smartkarma.com/entities/sensetime-group-inc" target="_blank" data-smartkarma-citation="entities:34319:1" rel="noopener">SenseTime Group (20 HK)</a> of shares out, worth US$11bn, unlocking next week.</li>
</ul>


There is a risk that the ¥7,000/share bid for Toshiba Corp (6502 JP) gets pulled/lowered in Round 2 because of due diligence, conditionality, market environment, etc.

Hutchison Telecommunications Hong Kong Holdings (215 HK)'s share price was up 33% month to date, on triple the average daily volume. Then promptly sheds 23% on an even larger volume. 
Even if one assumes that Softbank, Baba, and Cornerstones won’t sell, there is still 45% of SenseTime Group (20 HK) of shares out, worth US$11bn, unlocking next week.


Last Week in Event SPACE: Toshiba, Hutch Tel, SenseTime, Giordano, DTAC/True, Toyo Const., ResApp

Japan

Toshiba Corporation manufactures and markets electrical and electronic products. The Company's products include digital products such as PCs and televisions, NAND flash memories, and system LSIs (large-scale integrated), as well as social infrastructures such as power generators, medical equipment, and home appliances.

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Toshiba Corp (6502 JP)

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Janaghan Jeyakumar, CFA

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A clear split emerging between Toshiba shareholders should put a damper on excessively optimistic privatisation expectations and create more...

Mio Kato

Toshiba (6502) Ownership Structure - "Hostage to Toshiba" Larger Than Real World Float

A look at the shareholder structure of Toshiba (6502) tells you that Real World Float is smaller than you'd think, but that "Hostage to Toshiba"...

Travis Lundy

Toshiba – These Are The Days Of Our Lives

Toshiba's AGM generated more drama (surprise, surprise) as independent director Mariko Watahiki resigned upon learning that both activist director...

Mio Kato

Last Week in Event SPACE: Toshiba, Hutch Tel, SenseTime, Giordano, DTAC/True, Toyo Const., ResApp

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

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