In today’s briefing:
- Fast Retailing (9983) Capping Decision This Week – Single or Double Dose?
- Fast Retailing (9983 JP): Double Capping & The Reverse Funding Trade
- Sigma Healthcare (SIG AU): Shareholders Approve Merger; Passives Could Start Buying in Two Weeks
- Daihatsu Diesel’s (6023) Big Buyback and Quasi Change of Control
- Global Foods Creators (7559) – Another Stupidly Cheap MBO With Rigged DCF
- Takeda Pharma (4502) – Strong Results
- SOL Shipbuilding Top 3 ETF Throws off Some Serious Flow Trading Plays with Plenty of Juice
- Taiwan Tech Weekly: How Apple Helped TSMC Become #1; Also Morris Chang Comments on TSMC ADR Premium
- Quiddity JPX-Nikkei 400 Rebal 2025: End-Jan 2025 Ranks
- Dropsuite (DSE AU): NinjaOne’s A$5.90/Share Scheme
Fast Retailing (9983) Capping Decision This Week – Single or Double Dose?
- Unless Fast Retailing (9983) underperforms Nikkei 225 by 10% by Friday close, there will be a capping exercise at the next Nikkei 225 Rebalance at the end of March 2025.
- The evolution of tech stock movement in Japan in the next day or three is important to watch. There will be effects.
- The setup very near-term could be pretty interesting, and worth watching.
Fast Retailing (9983 JP): Double Capping & The Reverse Funding Trade
- With 3 days left in the review period, Fast Retailing (9983 JP) has a 11.29% weight in the Nikkei 225 (NKY INDEX). That means double capping in March.
- If Fast Retailing (9983 JP) underperforms the other index stocks by 1.8% from now to the close on 31 January, there will only be a single level of capping.
- Double capping will result in big selling on Fast Retailing (9983 JP) and big inflows into the other index constituents. Smaller impact for single level capping.
Sigma Healthcare (SIG AU): Shareholders Approve Merger; Passives Could Start Buying in Two Weeks
- Sigma Healthcare (SIG AU) and Chemist Warehouse (CWG) shareholders have approved the merger with 99.86% and 100% of the votes cast in favour.
- The Second Court Hearing is on 3 February and the merger will be implemented on 12 February, which is when the passive buying could commence.
- Sigma Healthcare has continued to trade higher on a record margin and sales expansion for CWG and expected passive buying that could top A$3bn over the next few months.
Daihatsu Diesel’s (6023) Big Buyback and Quasi Change of Control
- Yesterday, Daihatsu Diesel Mfg (6023 JP) announced that it would buy back shares in a Tender Offer and that its controlling “parent” would also sell shares to a private company.
- The accretion is significant, and the shareholder structure changes significantly. It is not quite an Exedy-like situation though. The register changes but it doesn’t clear.
- But the backdrop is considerably different than the MTMP, and that means this smallcap is worth a closer look.
Global Foods Creators (7559) – Another Stupidly Cheap MBO With Rigged DCF
- Today after the close, Global Food Creators (7559 JP) announced that the CEO would sell his 1.23% of the company into an MBO by a company he set up.
- The family company which owns 27%, and he would fund the takeover of the other 73% with 1% equity taken from his share sale, and 99% bank loans.
- The TOB is at 0.65x book for a cash-rich company. Liquidate the cash and the rest is being taken over at 0.33x book. Aaaaargh.
Takeda Pharma (4502) – Strong Results
- Today Takeda Pharmaceutical (4502 JP) announced earnings which will mean last year was the trough, not this year. The pipeline looks OK too.
- The company also announced a ¥100bn buyback and a change of CEO. The buyback has a big number, but it isn’t particularly exciting.
- All in all, there’s positive news here, but it is all much of a muchness, but as it is a nine-figure buyback in 3mos, we take a look.
SOL Shipbuilding Top 3 ETF Throws off Some Serious Flow Trading Plays with Plenty of Juice
- This 20% reversion and 30% cap setup creates solid flow trades. With just 13 holdings, SOL ETF’s weight swings hard—Hanwha Ocean’s already pushing 27% post-rebal.
- Constituent changes drive the biggest dislocations—still the main setup. “The other 10” names are FICS-screened by market cap (May/Nov cut), making rotations fairly predictable.
- With AUM only ramping recently, this ETF is still in price discovery mode. Pre-positioning ahead of flows has juice, making it a prime target for aggressive flow trading.
Taiwan Tech Weekly: How Apple Helped TSMC Become #1; Also Morris Chang Comments on TSMC ADR Premium
- PC Monitor: Snapdragon’s Surge, AMD’s Gains, Intel’s Test; Long Asus & Dell
- Memory Monitor: Is DeepSeek a Problem for SK Hynix & Micron’s HBM DRAM Growth?
- TSMC (2330.TT; TSM.US): Earthquake Impact Limited; Setting Newest Production Line Not Viable in US.
Quiddity JPX-Nikkei 400 Rebal 2025: End-Jan 2025 Ranks
- JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted capped index composed of 400 constituents.
- The annual index review takes place in August every year. We look at the latest rankings of potential ADDs/DELs every month.
- Below is a look at the rankings of potential ADDs/DELs for the JPX-Nikkei 400 August 2025 rebalance based on trading data as of end-January 2025.
Dropsuite (DSE AU): NinjaOne’s A$5.90/Share Scheme
- Dropsuite (DSE AU), a backup, recovery and protection software company, has entered into a Scheme Implementation Deed with Texas-based IT automation outfit NinjaOne.
- NinjaOne is offering A$5.90/share, a 34.1% premium to last close. Apart from Dropsuite’s shareholder approval, the Offer requires FIRB signing off. The Offer has the unanimous backing of both boards.
- The Offer also has the backing of Dropsuite’s largest shareholder, Topline Capital (31%). Board & management hold a further 9%. Implementation is expected late May 2025. This is done.
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