Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>With the review period for the September rebalance of the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> complete, we take a look at the potential inclusions and exclusions for the index.</li>
<li>The conclusions of the market consultation have been announced and that will mean we switch to a semi-annual rebalance. So we take a look at potential changes in March 2023.</li>
<li>The announcement of the changes for the next rebalance should be made in the first week of September and will be implemented at the close on 30 September.</li>
</ul>


With the review period for the September rebalance of the Nikkei 225 (NKY INDEX) complete, we take a look at the potential inclusions and exclusions for the index.
The conclusions of the market consultation have been announced and that will mean we switch to a semi-annual rebalance. So we take a look at potential changes in March 2023.
The announcement of the changes for the next rebalance should be made in the first week of September and will be implemented at the close on 30 September.


Nikkei 225 Index Rebalance Preview: Consultation Conclusions & Potential Changes in Sep & March

Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Equity Bottom-Up

<ul>
<li>Yaoko opened a discount supermarket last year and added a second in March, using knowhow acquired from the Ave chain it bought in 2017. </li>
<li>The new store is purpose built to save costs and offer lower prices, and should prove popular as inflation rises, while delivering higher margins than supermarkets typically achieve.</li>
<li>The format stands in marked contrast to other discounters such as <a href="https://www.smartkarma.com/entities/kobe-bussan-co-ltd" target="_blank" data-smartkarma-citation="entities:4701:1" rel="noopener">Kobe Bussan (3038 JP)'s </a>Gyomu Super but both formats show that discounters can make more money than other supermarkets.</li>
</ul>


Yaoko opened a discount supermarket last year and added a second in March, using knowhow acquired from the Ave chain it bought in 2017. 
The new store is purpose built to save costs and offer lower prices, and should prove popular as inflation rises, while delivering higher margins than supermarkets typically achieve.
The format stands in marked contrast to other discounters such as Kobe Bussan (3038 JP)'s Gyomu Super but both formats show that discounters can make more money than other supermarkets.


Discount Retail Gets Mainstream Support: Yaoko Expands Discount Supermarket

Thematic (Sector/Industry)

<ul>
<li>The drugstore sector is now 30% larger than it was in 2015, the fastest growth of any retail channel other than e-commerce. </li>
<li>In 2020 and 2021 that growth continued, with only some minor signs of slowing after the boost that many chains enjoyed at the beginning of the pandemic. </li>
<li>Expansion into food means that drugstores are fast becoming competitors to other retailers and, by 2025, the sector could even break ¥10 trillion, matching the size of convenience stores.</li>
</ul>


The drugstore sector is now 30% larger than it was in 2015, the fastest growth of any retail channel other than e-commerce. 
In 2020 and 2021 that growth continued, with only some minor signs of slowing after the boost that many chains enjoyed at the beginning of the pandemic. 
Expansion into food means that drugstores are fast becoming competitors to other retailers and, by 2025, the sector could even break ¥10 trillion, matching the size of convenience stores.


Japanese Drugstores: The Best Retail Bet Japan Has

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pan-pacific-international-holdings-corporation" target="_blank" data-smartkarma-citation="entities:13475:1" rel="noopener">Pan Pacific International Holdings (7532 JP)</a> has announced a Tender Offer on <a href="https://www.smartkarma.com/entities/kanemi-co-ltd" target="_blank" data-smartkarma-citation="entities:19614:1" rel="noopener">Kanemi Co Ltd (2669 JP)</a> to buy out the remaining shares of its one-time co-owner, Familymart. </li>
<li>The Tender Offer is for 11.83% of shares (ex-Treasury) at a 3% discount to last. It will get PPIH to near 40%, but together with friendlies, they own ~70%.</li>
<li>There is a small but extraordinarily illiquid opportunity here. I'd avoid, but there is an interesting potential put option. </li>
</ul>



Pan Pacific International Holdings (7532 JP) has announced a Tender Offer on Kanemi Co Ltd (2669 JP) to buy out the remaining shares of its one-time co-owner, Familymart. 
The Tender Offer is for 11.83% of shares (ex-Treasury) at a 3% discount to last. It will get PPIH to near 40%, but together with friendlies, they own ~70%.
There is a small but extraordinarily illiquid opportunity here. I'd avoid, but there is an interesting potential put option. 


Pan Pacific (7532) To Up Stake in Kanemi (2669) Through Partial Tender

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Pan Pacific International Holdings / Equity Bottom-Up

<ul>
<li>Although consensus looks a bit challenging, there could be a decent OP beat yet again in the third quarter.</li>
<li>Meanwhile <a href="https://www.smartkarma.com/entities/pan-pacific-international-holdings-corporation" target="_blank" data-smartkarma-citation="entities:13475:1" rel="noopener">Pan Pacific International Holdings (7532 JP)</a>’s valuation is still cheap and has decent potential for multiple expansion.</li>
<li>Thus, there could be more upside to PPIH if the company dismisses whatever the remaining concerns over profitability through a reasonably strong third-quarter performance.</li>
</ul>


Although consensus looks a bit challenging, there could be a decent OP beat yet again in the third quarter.
Meanwhile Pan Pacific International Holdings (7532 JP)’s valuation is still cheap and has decent potential for multiple expansion.
Thus, there could be more upside to PPIH if the company dismisses whatever the remaining concerns over profitability through a reasonably strong third-quarter performance.


Pan Pacific International: A Reasonably Strong Third Quarter Warrants Further Upside

Japan

Pan Pacific International Holdings Corporation operates discount stores which sell consumer electronics, daily necessities, groceries, watches, and sporting goods. The Company mostly operates small scale stores based in Tokyo.

Pan Pacific International Holdings (7532 JP)

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Pan Pacific International Holdings (7532 JP)

Nikkei 225 Index Rebalance Preview: Consultation Conclusions & Potential Changes in Sep & March

The market consultation conclusion were confirmed last week. We expect 3 changes to the index in September and another 3 in March. The adds/deletes...

Brian Freitas

Discount Retail Gets Mainstream Support: Yaoko Expands Discount Supermarket

Discount retailing continues to boom in Japan and now even the best mainstream supermarket chains like Yaoko are entering the market. The high...

Michael Causton

Japanese Drugstores: The Best Retail Bet Japan Has

Japan's drugstore sector has been written off by many leading analysts in the past. They were wrong then and are wrong now. The sector has plenty...

Michael Causton

Pan Pacific (7532) To Up Stake in Kanemi (2669) Through Partial Tender

PPIH is taking out the rest of Family Mart's stake in Kanemi. PPIH to 39% but together with other friendly corporates, ~70%. This is a potential...

Travis Lundy

Pan Pacific International: A Reasonably Strong Third Quarter Warrants Further Upside

We think that there could be more upside to PPIH if the company can dismiss whatever the remaining concerns over profitability through a reasonably...

Oshadhi Kumarasiri

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52-week Range

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