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>Nine shareholders are looking to sell 33.48m shares of <a href="https://www.smartkarma.com/entities/asahi-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10482:1" rel="noopener">Asahi Group Holdings (2502 JP)</a>. That is US$1.28bn, 24x ADV and 6.6% of shares outstanding.</li>
<li>Given the recent run up in the stock, there could be downside over the next couple of weeks ahead of the pricing date.</li>
<li>There will be buying from global trackers but nothing from <a href="https://www.smartkarma.com/entities/tokyo-stock-exchange-tokyo-price-index-topix" target="_blank" data-smartkarma-citation="entities:22910:1" rel="noopener">TOPIX</a> trackers, so not a lot of stock will be mopped up. Passive buying before settlement could create a squeeze.</li>
</ul>


Nine shareholders are looking to sell 33.48m shares of Asahi Group Holdings (2502 JP). That is US$1.28bn, 24x ADV and 6.6% of shares outstanding.
Given the recent run up in the stock, there could be downside over the next couple of weeks ahead of the pricing date.
There will be buying from global trackers but nothing from TOPIX trackers, so not a lot of stock will be mopped up. Passive buying before settlement could create a squeeze.


Asahi Group (2502 JP): Big Placement with Limited Index Buying; Timing Is Key

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Asahi Group Holdings / Equity Capital Markets

<ul>
<li>A group of shareholders are looking to raise US$1.3bn (JPY197.8bn) by selling their respective stakes in <a href="https://www.smartkarma.com/entities/asahi-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10482:1" rel="noopener">Asahi Group Holdings (2502 JP)</a> via an extended secondary follow-on.</li>
<li>The deal would represent 23 days of Asahi’s three month ADV. Its latest extended large primary deal has done very well.</li>
<li>While the deal isn't particularly well flagged, it is an extended one allowing the market to price in the impact of the share sale. </li>
</ul>


A group of shareholders are looking to raise US$1.3bn (JPY197.8bn) by selling their respective stakes in Asahi Group Holdings (2502 JP) via an extended secondary follow-on.
The deal would represent 23 days of Asahi’s three month ADV. Its latest extended large primary deal has done very well.
While the deal isn't particularly well flagged, it is an extended one allowing the market to price in the impact of the share sale. 


Asahi Group Placement - Relatively Small One when Compared to Previous Large JP Secondary Selldowns

<ul>
<li>
<a href="https://www.smartkarma.com/entities/light-wonder-inc" target="_blank" data-smartkarma-citation="entities:36929:1" rel="noopener">Light &amp; Wonder (LNW US)</a>/ <a href="https://www.smartkarma.com/entities/light-wonder-inc-7e7d040f-e811-4fb9-9710-796a39af299e" target="_blank" data-smartkarma-citation="entities:40171:1" rel="noopener">Light &amp; Wonder (LNW AU)</a> replaced <a href="https://www.smartkarma.com/entities/united-malt-group-ltd" target="_blank" data-smartkarma-citation="entities:29116:1" rel="noopener">United Malt Group Ltd (UMG AU)</a> in the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> last week.</li>
<li>
<a href="https://www.smartkarma.com/entities/newcrest-mining-ltd" target="_blank" data-smartkarma-citation="entities:691:1" rel="noopener">Newcrest Mining (NCM AU)</a> stops trading this week and should be replaced by <a href="https://www.smartkarma.com/entities/newmont-mining-corp" target="_blank" data-smartkarma-citation="entities:14503:1" rel="noopener">Newmont Mining (NEM US)</a> CDIs in the ASX indices.</li>
<li>Another week of ETF outflows for China with the largest outflows from trackers benchmarked to the CSI 1000 Index.</li>
</ul>



Light &amp; Wonder (LNW US)/ Light &amp; Wonder (LNW AU) replaced United Malt Group Ltd (UMG AU) in the S&amp;P/ASX 200 (AS51 INDEX) last week.

Newcrest Mining (NCM AU) stops trading this week and should be replaced by Newmont Mining (NEM US) CDIs in the ASX indices.
Another week of ETF outflows for China with the largest outflows from trackers benchmarked to the CSI 1000 Index.


Index Rebalance & ETF Flow Recap: NKY, ASX, Liontown, J&T Express, JP/IN Positioning, IndusInd Bank

<ul>
<li>The review period for 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> March rebalance ends end January. There could be three changes at the rebalance with sector balance in focus.</li>
<li>Depending on the changes, passive trackers will need to buy between 6-28x ADV (11-50% of real float) on the inclusions and sell between 2.8-44x ADV on the deletions.</li>
<li>
<a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a> could be capped at 11% of the index weight and there will be buying in <a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori Holdings (9843 JP)</a> due to the stepwise addition.</li>
</ul>


The review period for the Nikkei 225 (NKY INDEX) March rebalance ends end January. There could be three changes at the rebalance with sector balance in focus.
Depending on the changes, passive trackers will need to buy between 6-28x ADV (11-50% of real float) on the inclusions and sell between 2.8-44x ADV on the deletions.

Fast Retailing (9983 JP) could be capped at 11% of the index weight and there will be buying in Nitori Holdings (9843 JP) due to the stepwise addition.


Nikkei 225 Index Rebalance Preview (Mar 2024): Ranking, Capping, Funding & Other Changes

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>On an implied stub and simple ratio, <strong><a href="https://www.smartkarma.com/entities/takara-holdings-inc" target="_blank" data-smartkarma-citation="entities:11074:1" rel="noopener">Takara Holdings (2531 JP)</a></strong> is trading rich to 60.9%-held <strong><a href="https://www.smartkarma.com/entities/takara-bio-inc" target="_blank" data-smartkarma-citation="entities:10766:1" rel="noopener">Takara Bio Inc (4974 JP)</a></strong>.</li>
<li>Preceding my comments on Takara are the current setup/unwind tables for Asia-Pacific Holdcos.</li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>


On an implied stub and simple ratio, Takara Holdings (2531 JP) is trading rich to 60.9%-held Takara Bio Inc (4974 JP).
Preceding my comments on Takara are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


StubWorld: Takara Holdings Trading "Rich"

Japan

ITO EN, LTD. produces various types of Japanese tea and canned beverages.

Coca Cola Bottlers Japan produces and sells Coca-Cola, other beverages and foods through subsidiaries. The company also operates logistics, auto vending machine, and other businesses.

TAKARA HOLDINGS INC. produces distilled spirits, sake, soft drinks, and cooking wine.  The Company also sells alcoholic beverages under the brand names, Shouchikubai, Takara Can Chuhai, and Takara Shochu.

HOKKAIDO COCA-COLA BOTTLING CO., LTD. produces soft and cold canned drinks in Hokkaido.

YOMEISHU SEIZO CO., LTD. produces medicinal alcoholic drinks under the Yomeishu brand name.  The Company also produces distilled spirits, rice wine, and base alcohol.

Oenon Holdings, Inc. is a producer of rice wine, liquor and seasoning.  The Company produces mainly sake and shochu.

Nisshin Seifun Group Inc. produces and sells flour, fodder, processed foods, and medicines. The Company offers specialized pasta sauce, frozen foods, and gourmet soup. Nisshin Seifun Group also markets pet foods.

NICHIREI CORPORATION produces and distributes frozen food, ice, and meat products.  The Company also provides a variety of cold storage services, as well as manages leasing business for buildings and parking garages.

Kewpie Corporation mainly produces and sells mayonnaise, salad dressing, egg products, and health foods.  The Company also purchases and sells jam, sauce, canned and frozen foods.  Kewpie sells canned foods under Aohata brand.

NH Foods Ltd. produces and sells ham, sausage, and processed meat products. The Company also breeds and raises cattle through its subsidiary. NH Foods owns a professional baseball team, the Nippon Ham Fighters.

Beijing Yanjing Brewery Co., Ltd. operates in the brewery industry.  The Company's products include beer, spring water, beer raw materials, feeds, yeast, and other related products.

Beijing Yanjing Brewery Co, Ltd. (000729 CH)

Shede Spirits Co., Ltd. manufactures liquor products. The Company produces high end liquor, low end liquor, mid end liquor, and other products. Shede Spirits markets its products throughout China.

Sichuan Swellfun Co., Ltd. produces and markets spirits.  Through its subsidiaries, the Company also manufactures antibiotics and operates in printing and packaging business.

Guangzhou Zhujiang Brewery Company Ltd. brews and sells beers, hops, bottle lid and beverages. The Company's products include various type of Zhujiang beer.

Guangzhou Zhujiang Brewery Co (002461 CH)

The Boston Beer Company, Inc. produces a variety of craft-brewed beers and cider products at various contract breweries and Company-owned breweries.  The Company sells its products under brand names such as Boston Beer Company, Oregon Beer and Brewing Company, Samuel Adams, and HardCore.  Boston Beer sells its products to a network of wholesale distributors.

Radico Khaitan Ltd. produces and distributes branded liquor.   The Company operates molasses and grain distilleries and produces whiskey, rum, brandy, and vodka.  Radico also produces country liquor and extra neutral alcohol.

Saigon Beer - Alcohol - Beverage Corporation produces and distributes alcoholic beverages. The Company offers beer, spirits, soda, and other products. Saigon Beer - Alcohol - Beverage serves clients in Vietnam.

Anhui Kouzi Distillery Co., Ltd. produces wine. The Company also manufactures, produces and sells liquor and glassware. Anhui Kouzi Distillery operates in China.

Embotelladora Andina S.A. produces, markets, and distributes Coca-Cola products throughout Chile, Brazil, and Argentina.  The Company distributes soda, juices, mineral water, and other non-alcoholic beverages.  Andina also produces PET plastic bottles.

Hebei Hengshui Laobaigan Liquor Co., Ltd. produces white spirits, breeds and raises pigs, as well as manufactures feeds.

Sapporo Holdings Ltd produces and sells alcoholic and non-alcoholic beverages.  The Company's products include beer, wine, brandy, whiskey, imported beer, soft drinks, juice, coffee, and tea.  SAPPORO HOLDINGS also operates real estate businesses.

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Sapporo Holdings (2501 JP)

Asahi Group (2502 JP): Big Placement with Limited Index Buying; Timing Is Key

9 shareholders are looking to sell 33.48m shares (6.6% of shares out). The stock has run up and should correct in the short-term. Global passives...

Brian Freitas

Asahi Group Placement - Relatively Small One when Compared to Previous Large JP Secondary Selldowns

A group of shareholders are looking to raise US$1.3bn (JPY197.8bn) by selling their respective stakes in Asahi Group Holdings (2502 JP) via an...

Clarence Chu

Index Rebalance & ETF Flow Recap: NKY, ASX, Liontown, J&T Express, JP/IN Positioning, IndusInd Bank

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Nikkei 225 Index Rebalance Preview (Mar 2024): Ranking, Capping, Funding & Other Changes

There could be 3 changes in March + Fast Retailing capping. Stepwise inclusion of Nitori too. Socionext could be an add if it splits its stock. As...

Brian Freitas

StubWorld: Takara Holdings Trading "Rich"

If you had set up this stub, I'd be unwinding here. I'd be looking to reverse the stub - short Holdings, Long Bio - however, Bio remains in a...

David Blennerhassett

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