Weekly Top Ten Event-Driven and Index Rebalance – Sep 28, 2025

1. [Japan Event] Sony Financial Spin-Off Trades Monday – Fina(Ncia)L Thoughts

By Travis Lundy, Quiddity Advisors

• Today is the last day of trading for Sony Corp (6758 JP) with Sony Financial Group (8729 JP) spin-off rights. SFGI starts trading separately on Monday 29 Sep.
• The reference price is ¥150/share. It will likely stay in all major indices except Nikkei 225, and it likely needs low ¥160s to stay in M _ _ _. 
• The estimated Div Yield is higher on SFGI than peers by a fair ways, and looks to grow, and there is a big buyback to come. I like it.

2. Shift (3697 JP) – Short-Selling into Nikkei 225 Inclusion = Crowded Register Dynamic = Squeezy

By Travis Lundy, Quiddity Advisors

• Shift Inc (3697 JP) runs a software quality assurance testing business. 400% revenue growth in 5 years, but this year to Aug25 is “only” 17.5% according to Q3 results guidance.
• It was a “growth stock” for a long while, and large long-only growth investors flocked to the name. In the past several months many have exited. 
• The stock will be included in the Nikkei 225 Average next Tuesday. The supply/demand dynamics here to there are interesting. Afterwards they may be more interesting.

3. [Japan M&A] Paramount Bed (7817 JP) Founding Family Takeout – Too Cheap, Deserves Activist Response

By Travis Lundy, Quiddity Advisors

• In a fairly common pattern, the founding family (38% ownership) of Paramount Bed Holdings Co Lt (7817 JP) have launched an MBO. 
• It is too cheap at 4.2x adjusted EV/EBITDA (one could argue it is 5.0x but they also have net receivables) for such a ubiquitous brand and growth. 
• Soft99 Corp (4464 JP) may have been a one-off. Maybe not. People may look at this situation through that lens. It deserves that look. 

4. [Japan M&A/Activism] Soft99 Board Comes Out Against Effissimo Bid 66% Above MBO Price

By Travis Lundy, Quiddity Advisors

• Today after the close, the Soft99 Corp (4464 JP) Board of Directors came out AGAINST the Effissimo ¥4,100/share counterbid to the original ¥2,465/share MBO.
• “The Special Committee advised that the Tender Offer would not contribute to the enhancement of the Company Group’s corporate value, nor would it be fair to the Company’s general shareholders.”
• ¥2,465 is fair. ¥4,100 is not fair. Absolute hogwash. Unmitigated blatherskite. Pure trumpery. Codswallop, buncombe, taradiddle, balderdash, and nincompoopery too. I expound below.

5. HK Connect SOUTHBOUND Flows (To 19 Sep 2025); BIG Single Stock Trading Again, Feels Slightly Toppish

By Travis Lundy, Quiddity Advisors

• Gross SOUTHBOUND volumes just over US$22+bn a day this past 5-day week. Biggest week in a while. Net Flows not following gross flows. Feels toppish into GW.
• The recommended name last week was Alibaba (9988 HK) was up 2.2% on the week but only +0.7% from Monday close to Friday. 
• The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Pairs Monitor are both there for all SK readers.

6. The BOJ Announces the Start of ETF/JREIT Selldowns – Basically a Nothing-Burger

By Travis Lundy, Quiddity Advisors

• 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.

7. Korea Semicon ETF Rebal October Play: 2 In, 2 Out Long-Short Setup

By Sanghyun Park, Clepsydra Capital

• MTD screening results with 5 trading days left point to 2 names going out and 2 names coming in: Gemvax and Wonik IPS replace Dongjin Semichem and Jusung Engineering.
• Unlike last April’s tariff-distorted +1.3% rebalance, this time we expect cleaner, more meaningful price action.
• No pre-positioning seen, so I’ll target ETF rebalance day (Oct 10) and maybe take an anticipatory position a day earlier.

8. Sony Spin-off (Sony Financial Group) Spin-off Deep Dive

By Richard Howe, Stock Spin-Off Investing

• Sony Group Corporation (6758) is planning to spin off 80% of its stake in Sony Financial Group Inc. (8729) on September 29, 2025.
• Sony Financial Group Inc. is the financial services arm of Sony, comprised of three main businesses
• The spin-off will generate ~ ¥100BN in the current fiscal year and pay a ¥50BN annual dividend.

9. Merger Arb Mondays (22 Sep) – Technopro, Soft99, Mandom, Pacific Ind, Dongfeng, Shengjing, Smartpay

By Arun George, Global Equity Research Ltd

• I summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads: Mayne Pharma (MYX AU), Smart Share Global (EM US), ENN Energy (2688 HK), Dongfeng Motor (489 HK), Oneconnect Financial Technology (6638 HK), Joy City Property (207 HK).
• Lowest spreads: Bright Smart Securities (1428 HK), Pacific Industrial (7250 JP), PointsBet Holdings (PBH AU), Mandom Corp (4917 JP), Humm Group (HUM AU), Fuji Oil Co Ltd (5017 JP).

10. Soft99 Corp (4464 JP): The Board Opposes Effissimo’s Hostile Offer and Hints the MBO Will Succeed

By Arun George, Global Equity Research Ltd

• The Soft99 Corp (4464 JP) Board has, unsurprisingly, opposed the Effissimo offer for several reasons. Notably, they do address the huge price disparity between the two offers. 
• While most of the reasons to justify the opposition are weak, the Board unexpectedly notes that as of 24 September, the MBO retained acceptances to satisfy its minimum tendering condition. 
• Despite the significant premium of the Effissimo offer, this development suggests that the current acceptances for the MBO are sticky, thereby increasing the likelihood that Effissimo’s offer will fail.