Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mitsui-co-ltd" target="_blank" data-smartkarma-citation="entities:20799:1" rel="noopener">Mitsui &amp; Co Ltd (8031 JP)</a> on 1 November reported its results for H1 2022. H1 Revenue +37.1%yoy, OP+27.2%yoy, NP+33.2%yoy to ¥539bn. Full-year NP forecast +22.5% to ¥980bn.</li>
<li>Mitsui raised its dividend forecast (previously scheduled to rise from ¥105/share to ¥120/share) to ¥130/share and announced a ¥140bn buyback, adding to the ¥100bn announced in May completed in September.</li>
<li>The first ¥58.6bn was done in a ToSTNeT-3 buyback. Now there is another ¥79.4bn to go. There's also a fair bit of index selling the next 6mos.</li>
</ul>



Mitsui &amp; Co Ltd (8031 JP) on 1 November reported its results for H1 2022. H1 Revenue +37.1%yoy, OP+27.2%yoy, NP+33.2%yoy to ¥539bn. Full-year NP forecast +22.5% to ¥980bn.
Mitsui raised its dividend forecast (previously scheduled to rise from ¥105/share to ¥120/share) to ¥130/share and announced a ¥140bn buyback, adding to the ¥100bn announced in May completed in September.
The first ¥58.6bn was done in a ToSTNeT-3 buyback. Now there is another ¥79.4bn to go. There's also a fair bit of index selling the next 6mos.


Mitsui & Co (8031) Buyback - Big Profit, Big Div, Big Buyback, Some Index Selling

<ul>
<li>In April, a Bloomberg <a href="https://www.bloomberg.com/news/articles/2022-04-22/renault-is-said-to-explore-nissan-stake-sale-to-support-ev-shift" target="_blank" rel="noopener">story</a> said <a href="https://www.smartkarma.com/entities/renault-sa" target="_blank" data-smartkarma-citation="entities:21536:1" rel="noopener">Renault SA (RNO FP)</a> might sell shares in <a href="https://www.smartkarma.com/entities/nissan-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:72:1" rel="noopener">Nissan Motor (7201 JP)</a> to support its investment in EVs. They might sell to Nissan, others.</li>
<li>Renault shares popped hard, this two months after CEO Luca de Meo had said Renault might split, investing in and listing its EV business separately.  But since then? Crickets.</li>
<li>Over the weekend, we have news talks are coming to a head. My feeling? The results won't be pretty - a messy agreement which inspires nobody, but <em>probably still works</em>.</li>
</ul>


In April, a Bloomberg story said Renault SA (RNO FP) might sell shares in Nissan Motor (7201 JP) to support its investment in EVs. They might sell to Nissan, others.
Renault shares popped hard, this two months after CEO Luca de Meo had said Renault might split, investing in and listing its EV business separately.  But since then? Crickets.
Over the weekend, we have news talks are coming to a head. My feeling? The results won't be pretty - a messy agreement which inspires nobody, but probably still works.


Renault & Nissan - Capital Manoeuvres In the Dark

<ul>
<li>The TSE announced its first large FFW rebalance under new rules and Market Segmentation. ~1,000 names see FFW drop 5% or more. 100+ rise 5+%. Reverse funding trades are significant.</li>
<li>Top BUY flow: Toyota, Olympus, Daiichi Sankyo, Tokio Marine, JP Holdings with an average of 4.0 days' ADV to buy. Softbank/9984, MitCorp, Hitachi, Suzuki, Marubeni average 4.8 days to SELL.</li>
<li>493 names start their phased weight reduction out of TOPIX because they do not meet the hurdle for minimum trading value. <em>And... Shinsei is the most impressive SELL name.</em>
</li>
</ul>


The TSE announced its first large FFW rebalance under new rules and Market Segmentation. ~1,000 names see FFW drop 5% or more. 100+ rise 5+%. Reverse funding trades are significant.
Top BUY flow: Toyota, Olympus, Daiichi Sankyo, Tokio Marine, JP Holdings with an average of 4.0 days' ADV to buy. Softbank/9984, MitCorp, Hitachi, Suzuki, Marubeni average 4.8 days to SELL.
493 names start their phased weight reduction out of TOPIX because they do not meet the hurdle for minimum trading value. And... Shinsei is the most impressive SELL name.



TOPIX October 2022 Rebal - BIG Names with BIG Flows

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>A few years back, <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a> announced its intention to aggressively grow its consumer brand business. </li>
<li>It has just confirmed deals with Eddie Bauer and Barbour after a year in which it also signed Reebok and Under Armour.</li>
<li>Although a small part of the Itochu empire, the consumer brand business, alongside retail interests such as Familymart, are key to the trading firm's longer term profits.</li>
</ul>


A few years back, Itochu Corp (8001 JP) announced its intention to aggressively grow its consumer brand business. 
It has just confirmed deals with Eddie Bauer and Barbour after a year in which it also signed Reebok and Under Armour.
Although a small part of the Itochu empire, the consumer brand business, alongside retail interests such as Familymart, are key to the trading firm's longer term profits.


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

NTT (Nippon Telegraph & Telephone) / Event-Driven

<ul>
<li>The third tranche of the FFW methodology change for the <a href="https://www.smartkarma.com/entities/tokyo-stock-exchange-tokyo-price-index-topix" target="_blank" data-smartkarma-citation="entities:22910:1" rel="noopener">Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX)</a> will be implemented at the close of trading on 29 June.</li>
<li>One-Way flow is ~JPY 742bn and will be spread across 2170 stocks. The largest inflow will be on <a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (9432 JP)</a> and the largest outflow on <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a>.</li>
<li>Stocks with the largest impact of inflows have outperformed stocks with the largest impact of outflows, but there has been underperformance over the last couple of weeks.</li>
</ul>


The third tranche of the FFW methodology change for the Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX) will be implemented at the close of trading on 29 June.
One-Way flow is ~JPY 742bn and will be spread across 2170 stocks. The largest inflow will be on NTT (9432 JP) and the largest outflow on Toyota Motor (7203 JP).
Stocks with the largest impact of inflows have outperformed stocks with the largest impact of outflows, but there has been underperformance over the last couple of weeks.


TOPIX Rebalance: Flows at the Close on 29 June

Japan

Mitsubishi Corporation is a general trading company.  The Company has business groups such as New Business Initiatives, IT & Electronics, Fuels, Metals, Machinery, Chemicals, Living Essentials, and Professional Services.  Mitsubishi diversifies by satellite communications through a joint venture.

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Mitsubishi Corp (8058 JP)

Mitsui & Co (8031) Buyback - Big Profit, Big Div, Big Buyback, Some Index Selling

Mitsui Corp last week announced strong results and upward guidance, especially in energy. Consensus says Mar-23 is the cycle peak. Higher div,...

Travis Lundy

Renault & Nissan - Capital Manoeuvres In the Dark

Renault and Nissan have been dancing around co-investment in Renault's planned EV spinout company for months, and now CEO de Meo has a Nov 8...

Travis Lundy

TOPIX October 2022 Rebal - BIG Names with BIG Flows

The annual TOPIX FFW rebalance is larger this year than normal, with the twist that 493 names will now start to be phased out completely.

Travis Lundy

Itochu Grabs Eddie Bauer and Barbour

Itochu Corp has become a major player in brand distribution in the last decade but is now aggressively acquiring brand rights to cement its...

Michael Causton

TOPIX Rebalance: Flows at the Close on 29 June

The third and final tranche of the FFW methodology change for the TOPIX Index will be implemented at the close of trading on 29 June. One way flow...

Brian Freitas

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