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>
<a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso Corp (6902 JP)</a> is looking to raise up to JPY137bn (US$940m) by selling 73.9m shares of <a href="https://www.smartkarma.com/entities/renesas-electronics-corp" target="_blank" data-smartkarma-citation="entities:15933:1" rel="noopener">Renesas Electronics (6723 JP)</a> to international investors.</li>
<li>The indicative price range is JPY 1,812-1,848/share, a discount of 1-2.95% to Monday's close. The placement is 4.1% of shares outstanding and is 4.7 days of ADV.</li>
<li>We do not expect any passive buying at the time of settlement of the placement shares. The earliest passive buying will take place in August and September.</li>
</ul>



Denso Corp (6902 JP) is looking to raise up to JPY137bn (US$940m) by selling 73.9m shares of Renesas Electronics (6723 JP) to international investors.
The indicative price range is JPY 1,812-1,848/share, a discount of 1-2.95% to Monday's close. The placement is 4.1% of shares outstanding and is 4.7 days of ADV.
We do not expect any passive buying at the time of settlement of the placement shares. The earliest passive buying will take place in August and September.


Renesas Electronics (6723 JP): Denso Exits as Stock Price Falters

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, 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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso Corp (6902 JP)</a> is looking to raise US$940m via selling its remaining stake in <a href="https://www.smartkarma.com/entities/renesas-electronics-corp" target="_blank" data-smartkarma-citation="entities:15933:1" rel="noopener">Renesas Electronics (6723 JP)</a>.</li>
<li>DENSO last sold some of its stake nearly a year ago and hence, this deal is well flagged.</li>
<li>In this note, we will talk about the placement and run the deal through our ECM framework.</li>
</ul>



Denso Corp (6902 JP) is looking to raise US$940m via selling its remaining stake in Renesas Electronics (6723 JP).
DENSO last sold some of its stake nearly a year ago and hence, this deal is well flagged.
In this note, we will talk about the placement and run the deal through our ECM framework.


Renesas Electronics Block - Well Flagged, Clean up but Momentum Isn’t Great

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>The bigger question for investors is whether <a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso Corp (6902 JP)</a> will keep up with global auto market needs or will they suffer as Toyota may suffer?</li>
<li>The FSS may put the breaks on <a href="https://www.smartkarma.com/entities/korea-zinc-co-ltd" target="_blank" data-smartkarma-citation="entities:17944:1" rel="noopener">Korea Zinc (010130 KS)</a>'s massive capital raise. </li>
<li>Murakami-San has won <a href="https://www.smartkarma.com/entities/exedy-corp" target="_blank" data-smartkarma-citation="entities:6516:1" rel="noopener">Exedy Corp (7278 JP)</a>. The company has decided to up its dividend payout and future dividend payout ratio and buy back a boatload of shares. </li>
</ul>


The bigger question for investors is whether Denso Corp (6902 JP) will keep up with global auto market needs or will they suffer as Toyota may suffer?
The FSS may put the breaks on Korea Zinc (010130 KS)'s massive capital raise. 
Murakami-San has won Exedy Corp (7278 JP). The company has decided to up its dividend payout and future dividend payout ratio and buy back a boatload of shares. 


Last Week in Event SPACE: Denso/Toyota, Korea Zinc, Exedy, Good Drinks, Shinsegae

Travis Lundy

<ul>
<li>13mos ago we saw a sea change. Toyota Group started the process of cross-holding unwinds. They've moved quickly. LOTS of unwinding and so far nearly ¥2trln in buybacks announced.</li>
<li>Aisin, Toyota, and Toyota Industries (TIC) sold Denso first. Then Denso sales of TIC and Renesas, then Aisin, then Exedy, now TIC is selling the rest of its Denso.</li>
<li>Denso announced lower guidance and an overwhelming buyback - as much as liquidity would allow - to offset TIC and non-life sellers. Reading between the lines, there are interesting details.</li>
</ul>


13mos ago we saw a sea change. Toyota Group started the process of cross-holding unwinds. They've moved quickly. LOTS of unwinding and so far nearly ¥2trln in buybacks announced.
Aisin, Toyota, and Toyota Industries (TIC) sold Denso first. Then Denso sales of TIC and Renesas, then Aisin, then Exedy, now TIC is selling the rest of its Denso.
Denso announced lower guidance and an overwhelming buyback - as much as liquidity would allow - to offset TIC and non-life sellers. Reading between the lines, there are interesting details.


Toyota Group Musical Shares - Toyota Industries' (6201) Big Multi-Year Denso (6902) Selldown & More

<ul>
<li>Last September in the release of its new Mid-Term Management Plan, Toyota Group member <a href="https://www.smartkarma.com/entities/aisin-corp" target="_blank" data-smartkarma-citation="entities:11809:1" rel="noopener">Aisin (7259 JP)</a> announced a plan to cut cross-holdings to zero. <a href="https://www.smartkarma.com/entities/jtekt-corp" target="_blank" data-smartkarma-citation="entities:12197:1" rel="noopener">JTEKT Corp (6473 JP)</a> followed suit.</li>
<li>It started with a selldown of <a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso Corp (6902 JP)</a>, then <a href="https://www.smartkarma.com/entities/toyota-industries-corp" target="_blank" data-smartkarma-citation="entities:4500:1" rel="noopener">Toyota Industries (6201 JP)</a>, now <a href="https://www.smartkarma.com/insights/big-aisin-7259-offering-sets-stage-for-first-toyota-group-full-unwind" target="_blank" rel="noopener">Aisin</a>. Last FY, Toyota Group cos reduced crossholdings by ¥870bn. This year will be more.</li>
<li>Attached below is a general breakdown of Toyota Group cross-holdings, discussion of cross-holding policies, and analysis of what is next, and what is not.</li>
</ul>


Last September in the release of its new Mid-Term Management Plan, Toyota Group member Aisin (7259 JP) announced a plan to cut cross-holdings to zero. JTEKT Corp (6473 JP) followed suit.
It started with a selldown of Denso Corp (6902 JP), then Toyota Industries (6201 JP), now Aisin. Last FY, Toyota Group cos reduced crossholdings by ¥870bn. This year will be more.
Attached below is a general breakdown of Toyota Group cross-holdings, discussion of cross-holding policies, and analysis of what is next, and what is not.


Toyota Group Cross-Holding Structure Primer - Holdings, Unwind Progress, Buyback Policies, Etc

Japan

DENSO CORPORATION manufactures electronic parts for automobiles.  The Company's products include automobile air conditioners, air bags, ignition systems, generators, power steering systems, and spark plugs with iridium electrode. The Company also produces communication equipment for mobile navigation system.

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Denso Corp (6902 JP)

Renesas Electronics (6723 JP): Denso Exits as Stock Price Falters

Denso should raise US$940m by selling nearly their entire holding in Renesas Electronics. Unlikely to be any passive buying in the near term, but...

Brian Freitas

Renesas Electronics Block - Well Flagged, Clean up but Momentum Isn’t Great

Denso Corp (6902 JP) is looking to raise US$940m via selling its remaining stake in Renesas Electronics (6723 JP). This is a well-flagged deal.

Sumeet Singh

Last Week in Event SPACE: Denso/Toyota, Korea Zinc, Exedy, Good Drinks, Shinsegae

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

Toyota Group Musical Shares - Toyota Industries' (6201) Big Multi-Year Denso (6902) Selldown & More

Toyota Group cross-holding unwinds are more than ¥1trln already and buybacks are close to ¥2trln since The Aisin Announcement. Today, TIC sells,...

Travis Lundy

Toyota Group Cross-Holding Structure Primer - Holdings, Unwind Progress, Buyback Policies, Etc

8mos past the first large Toyota Group selldown in Denso (i.e. past lockup). Others have followed since. Toyota Inds and Toyota R.E. have ¥600bn to...

Travis Lundy

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