In today’s briefing:
- Nikkei 225 Index Rebalance Preview (Sep 2025): Potential Adds, Deletes, PAF, Capping & Other Changes
- Solactive Global Uranium & Nuclear Components Index Rebalance: Two Adds & US$1.4bn Trade
- [Japan M&A] – KKR Launches Still-Too-Light Topcon (7732) Deal
- [Japan Activism/M&A] Hogy Medical (3593) Reportedly Up For Auction – Totally Unsurprising
- GF Securities (1776 HK): Global Index Inclusion as Sector Rallies
- GMO Internet (4784) – GMO Internet Parent Has Been SELLING In The Market
- NSDL (NSDL IN) IPO: Offering Details & Index Inclusion Timeline
- CKH (1 HK): Intervention Towards Securing Participation
- A Tender Offer of JTC by Affirma Capital
- Hana Micron Split Cancellation: Trades Targeting Position Unwinding and Korea Discount Compression
Nikkei 225 Index Rebalance Preview (Sep 2025): Potential Adds, Deletes, PAF, Capping & Other Changes
- The review period for the Nikkei 225 (NKY INDEX) September rebalance ends in 4 weeks. There could be one outright change and one or two others driven by sector balance.
- There will be passive buying in BayCurrent Consulting as the PAF moves from 0.5 to 1. Fast Retailing (9983 JP)‘s index weight is below the 10% cap for now.
- ROHM Co Ltd (6963 JP) replaces NTT Data Corp (9613 JP) later this week and there will be a lot of focus on those names.
Solactive Global Uranium & Nuclear Components Index Rebalance: Two Adds & US$1.4bn Trade
- Solactive has announced the constituent changes for the Global Uranium & Nuclear Components Index with implementation at the close on 31 July.
- Nano Nuclear Energy (NNE US) and Atha Energy Corp (ATHA CN) will be added to the index. Estimated one-way turnover is 16.3% resulting in a round-trip trade of US$1.36bn.
- There are only 3 trading days to implementation of the changes and we’d watch out for big moves on stocks that have more than 2x ADV to trade.
[Japan M&A] – KKR Launches Still-Too-Light Topcon (7732) Deal
- In December-2024, this deal was mooted and it came out as expected. But the implied growth in management forecasts was higher than expected so the price came in quite light.
- In March when the deal was announced, it seemed like a tough call, but three weeks later Value Act decided they would tender, but would reinvest in the back end.
- The deal is now approved, and launches tomorrow. It gets done, I expect, but it is not a model deal other than being one showing the loopholes available to buyers.
[Japan Activism/M&A] Hogy Medical (3593) Reportedly Up For Auction – Totally Unsurprising
- Hogy Medical (3593 JP)‘s founder passed and there was a re-arranging of Hoki family deckchairs in 2021. In 2022 there was a BIG buyback from the family at ¥3,130/share.
- I discussed it here. I suggested that meant accretion, a family willing to sell, and an open register for a cheap company always heavily owned by value investors.
- The stock went nowhere for 18mos as activists dallied. In 2024 it ran from ¥3,500 to ¥5,000 as Dalton bought 20%. Then they got a board seat. Now takeover noise.
GF Securities (1776 HK): Global Index Inclusion as Sector Rallies
- Following a rally in the stock over the last 4 months, GF Securities (H) (1776 HK) could be added to a global index in August.
- GF Securities (H) (1776 HK)‘ peers have also rallied over the same time frame and the stock trades in line with its peers on various valuation metrics.
- Positioning in the stock is in line with its peers and shorts have continued to increase as the stock price has moved higher.
GMO Internet (4784) – GMO Internet Parent Has Been SELLING In The Market
- I have harped on the fact that GMO Internet Group (9449 JP) has to sell GMO Internet (4784 JP) shares with the goal to get 35% tradable shares by end-2025.
- I have written about it here, here, here, and here. The price needs to be lower so the parent can launch a HUGE block. The stock must be less squeeze-able.
- It turns out the parent started selling in the market the day after the Offering was cancelled. The setup is delicious now.
NSDL (NSDL IN) IPO: Offering Details & Index Inclusion Timeline
- NSDL (NSDL IN) is looking to list on the exchanges by selling up to INR 40bn (US$464m) of stock at a valuation of up to INR 160bn (US$1.85bn).
- The stock will not get Fast Entry to either of the global indices. The earliest inclusion in a global index should take place in November.
- Central Depository Services (CDSL IN)‘s stock price has dropped following the announcement of NSDL‘s IPO price band and the muted results could lead to further downside in the stock.
CKH (1 HK): Intervention Towards Securing Participation
- Inviting a PRC investor to join the bidding consortium as a significant member, as opposed to a majority player, appears the panacea to get this port deal over the line.
- Although CK Hutchison Holdings (1 HK) stopped short of naming the investor, China’s state-owned shipping conglomerate Cosco is widely expected/rumoured to join BlackRock and Swiss-Italian shipping company MSC.
- Participation through effective intervention? Cosco’s involvement should all-but seal Chinese regulatory approvals. The green light from the US administration, the EU, and other jurisdictions, will pivot off how much involvement.
A Tender Offer of JTC by Affirma Capital
- On 28 July, it was announced that Affirma Capital will conduct a tender offer of JTC Inc/Fukuoka (950170 KS) which is a Japanese duty free operator listed on KOSDAQ.
- This follows the exercise of a call option on all shares held by former JTC Chairman Gu Cheol-mo.
- Despite some recent concerns about travelling to Japan due to Manga driven fears about earthquakes, there are some clear longer term signs that the global travelers visiting Japan are increasing.
Hana Micron Split Cancellation: Trades Targeting Position Unwinding and Korea Discount Compression
- The split’s cancellation caught event-driven traders off guard, squeezing shorts and sparking short-covering flows, likely boosting the stock near term and removing governance overhang for a potential rerate.
- Passive flow shifts as spinco’s planned KOSDAQ 150 inclusion is canceled, reversing early index rebalancing and pre-positioning by passive investors.
- Hana Micron stays in the index, so no major passive outflows—just some trimming. Trade the short-cover pop, watch for passive cleanup dips as potential re-entry points.
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