Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

HK Type 4 license through Ballingal Investment Advisors Ltd. ("BIA" or "BIAL")

BACKGROUND
I have 20+yrs experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies with most of that time spent managing money. 

4 years in fixed income macro, 8 years running internal hedge fund and 4yrs investment banking at Citi in Japan, 3 years running an Asia multi-strat portfolio at a hedge fund, 4+yrs as an independent special situations analyst.

Pan-Asia Catalysts/Events

The End-November Japan Rebalances - How Much Is Priced In?

Messy End-Nov Rebals (JPX Nikkei 400, MSCI, TOPIX) - Analysis and Lessons Learned

NTT Docomo: The Three Arbs and the Great Re-Allocation Trade

NTT Docomo Delisting; Nikkei 225 Replacement Is SHARP (6753) - With a Surprise

Gravity Works As WeWork Doesn't; Now Plan B

Quiddity Advisors

Quantitative Analysis

NTT (Nippon Telegraph & Telephone) (9432 JP)

When NTT announced its proposed cash takeover of NTT Docomo, it meant two things. <ol>
<li>The biggest cash takeover ever seen in Japan.</li>
<li>The biggest equity reallocation trade ever seen in Japan off a single event.</li>
</ol>This was discussed to some extent in <a href="https://www.smartkarma.com/insights/ntt-docomo-the-three-arbs-and-the-great-re-allocation-trade" target="_blank" data-smartkarma-citation="insights:44115" rel="noopener">NTT Docomo: The Three Arbs and the Great Re-Allocation Trade</a>but details remained to be ironed out. That's happening now. <hr>Yesterday, the TSE let its TOPIX Index customers know that it would lower the Free Float Weight of <a href="https://www.smartkarma.com/entities/ntt-docomo-inc" target="_blank" data-smartkarma-citation="entities:1089:1" rel="noopener">NTT Docomo Inc (9437 JP)</a> in TOPIX at the close of the 27th of November.I had expected that they would wait until <a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (Nippon Telegraph &amp; Telephone) (9432 JP)</a> presented its Demand For Cash Out to NTT Docomo - an event I would expect to occur on 24 November - and for the TSE to designate NTT Docomo a Security To Be Delisted on that day. If that happened, TOPIX and other TSE-calculated indices would remove NTT Docomo from their indices at the close of the third business day following such designation. That would be the 27th. It is possible NTT does its Demand for Cash Out on a different day. If that happens, then the trade is split. The important trade here, as I have been trying to impress on readers, is NOT the NTT Docomo deletion but the index portfolio management trades which happen because of it. NTT Docomo will be bought by arbitrageurs. But the index funds will have to buy the index ex-Docomo in the size that they own(ed) Docomo. That is - over the course of the TOPIX and JPX Nikkei 400 index deletions - not far from JPY 900 billion to buy. Details and trade suggestions below.

When NTT announced its proposed cash takeover of NTT Docomo, it meant two things. 
The biggest cash takeover ever seen in Japan.
The biggest equity reallocation trade ever seen in Japan off a single event.
This was discussed to some extent in NTT Docomo: The Three Arbs and the Great Re-Allocation Tradebut details remained to be ironed out. That's happening now. Yesterday, the TSE let its TOPIX Index customers know that it would lower the Free Float Weight of NTT Docomo Inc (9437 JP) in TOPIX at the close of the 27th of November.I had expected that they would wait until NTT (Nippon Telegraph &amp; Telephone) (9432 JP) presented its Demand For Cash Out to NTT Docomo - an event I would expect to occur on 24 November - and for the TSE to designate NTT Docomo a Security To Be Delisted on that day. If that happened, TOPIX and other TSE-calculated indices would remove NTT Docomo from their indices at the close of the third business day following such designation. That would be the 27th. It is possible NTT does its Demand for Cash Out on a different day. If that happens, then the trade is split. The important trade here, as I have been trying to impress on readers, is NOT the NTT Docomo deletion but the index portfolio management trades which happen because of it. NTT Docomo will be bought by arbitrageurs. But the index funds will have to buy the index ex-Docomo in the size that they own(ed) Docomo. That is - over the course of the TOPIX and JPX Nikkei 400 index deletions - not far from JPY 900 billion to buy. Details and trade suggestions below.

The Great Docomo/TOPIX Reallocation Trade