In today’s briefing:
- The BOJ Announces the Start of ETF/JREIT Selldowns – Basically a Nothing-Burger
- Pacific Industrial (7250 JP): Limited Upside as Effissimo Continues to Add
- Softbank Group (9984 JP) Tactical Outlook: Momentum Strong but Stretched, Higher Targets Speculative
- Aeon Restructuring as Seven & I Flounders
The BOJ Announces the Start of ETF/JREIT Selldowns – Basically a Nothing-Burger
- In Friday’s Monetary Policy Statement, the BOJ announced it would start selling down its holdings in ETFs and J-REITs at the pace of ¥620bn and ¥5.5bn/year, respectively. BIG NEWS!
- That is US$17mm of ETFs and US$150k of J-REITs per day. The BOJ suggests it is 0.05% of volume per day. That’s close. SMALL EFFECT.
- Given ¥15trln of buybacks and ¥5trln+ of dividend reinvestment + NISA account buys, plus ¥trlns of cross-holding selldowns/year, this is a total nothingburger, even if they up the pace.
Pacific Industrial (7250 JP): Limited Upside as Effissimo Continues to Add
- Effissimo has steadily increased its Pacific Industrial (7250 JP) stake to 7.0 million shares or a 12.17% ownership ratio. The most recent purchases were at an average price of JPY2,616.08.
- Effissimo is taking contrasting approaches to low-ball MBOs. For Soft99 Corp (4464 JP), Effissimo has launched a hostile offer, while for Pacific, Effissimo has chosen to agitate for better terms.
- The offer closes on 24 September. While a bump is the most likely scenario, the share price is 30% higher than the offer price, suggesting limited upside. Take profits.
Softbank Group (9984 JP) Tactical Outlook: Momentum Strong but Stretched, Higher Targets Speculative
- Softbank Group (9984 JP) performed a strong 1-week rally 2 weeks ago, then went marginally higher. The stock is OVERBOUGHT according to our models, but the pattern is bullish.
- We see two possible scenarios: a) the stock stalls and pulls back this week or b) it keeps rallying towards 20850.
- The current pattern had rallies lasting up to 5 weeks in the past, so Softbank Group (9984 JP) could rally 2 more weeks, and get closer to 20850.
Aeon Restructuring as Seven & I Flounders
- Aeon, Japan’s largest retail group, is accelerating business reforms across supermarkets, drugstores, private brands, apparel, e-commerce, and mall facilities.
- It is also investing heavily in customer experience and operational efficiency.
- All of which is in contrast to the beleaguered rival, Seven & I, which has fought off a bid but at the expense of significant market share.
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