Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Berkshire appears set to exit <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a> partially or in full. But why signal to market well in advance?</li>
<li>
<a href="https://www.smartkarma.com/entities/united-tractors-tbk-pt" target="_blank" data-smartkarma-citation="entities:698:1" rel="noopener">United Tractors (UNTR IJ)</a>'s buyback should be impactful. They could do another one afterwards as they have lots of cash. This is a raging buy. Buy now. With both hands.</li>
<li>The BOJ was expected to change its ETF allocations. It stopped buying Nikkei 225 and JPX Nikkei 400 ETFs. As the world moves more to passive, expect float to decrease.</li>
</ul>


Berkshire appears set to exit BYD (1211 HK) partially or in full. But why signal to market well in advance?

United Tractors (UNTR IJ)'s buyback should be impactful. They could do another one afterwards as they have lots of cash. This is a raging buy. Buy now. With both hands.
The BOJ was expected to change its ETF allocations. It stopped buying Nikkei 225 and JPX Nikkei 400 ETFs. As the world moves more to passive, expect float to decrease.


Last Week in Event SPACE: BYD, Astra/United Tractor, Japan Passive, AGL, Genting Singapore

Travis Lundy

NTT (Nippon Telegraph & Telephone) / Event-Driven

<ul>
<li>2022 Version of JAPAN PASSIVE: Who Owns What? where we break down the major (and minor) passive tracking indices and which category of investor owns how much of each. </li>
<li>Even if you do not "play" index changes, understanding impact is important. <a href="https://www.smartkarma.com/entities/japan-exchange-group-inc" target="_blank" data-smartkarma-citation="entities:11266:1" rel="noopener">Japan Exchange Group (8697 JP)</a> entered Nikkei 225 in July 2020 after rising 30%. That was the top.</li>
<li>Understanding the nature of the ownership and flows is crucial to understanding how to trade certain stocks. </li>
</ul>


2022 Version of JAPAN PASSIVE: Who Owns What? where we break down the major (and minor) passive tracking indices and which category of investor owns how much of each. 
Even if you do not "play" index changes, understanding impact is important. Japan Exchange Group (8697 JP) entered Nikkei 225 in July 2020 after rising 30%. That was the top.
Understanding the nature of the ownership and flows is crucial to understanding how to trade certain stocks. 


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

<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

Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Senior Technology Analyst, Japanese Equities

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.

Equity Bottom-Up

<ul>
<li>Nanya Technology has warned of a downturn that could last to the end of the year. This follows reports of procurement delays in response to excess inventory at Samsung.</li>
<li>Inflation, the Fed's attempt to kill it with higher interest rates, and the growing risk of recession now threaten not only Tokyo Electron but the entire semiconductor supply chain.</li>
<li>Record capital spending plans should be fully discounted. Potential delays and cutbacks now put a burden of uncertainty on the sector.</li>
</ul>


Nanya Technology has warned of a downturn that could last to the end of the year. This follows reports of procurement delays in response to excess inventory at Samsung.
Inflation, the Fed's attempt to kill it with higher interest rates, and the growing risk of recession now threaten not only Tokyo Electron but the entire semiconductor supply chain.
Record capital spending plans should be fully discounted. Potential delays and cutbacks now put a burden of uncertainty on the sector.


Tokyo Electron (8035): Semiconductor Supply Chain at Risk of a Downturn

<ul>
<li>Tokyo Electron has announced a new Medium-term Plan that shows what the company could probably do if the next five years were as good as the last five years.</li>
<li>That seems unlikely. The plan ignores rising interest rates, the risk of recession, political risk, and the possibility of demand from South Korea, Taiwan and China maxing out. </li>
<li>It looks like FY Mar-23 guidance is intended to be conservative.  That cannot be take for granted.</li>
</ul>


Tokyo Electron has announced a new Medium-term Plan that shows what the company could probably do if the next five years were as good as the last five years.
That seems unlikely. The plan ignores rising interest rates, the risk of recession, political risk, and the possibility of demand from South Korea, Taiwan and China maxing out. 
It looks like FY Mar-23 guidance is intended to be conservative.  That cannot be take for granted.


Tokyo Electron (8035 JP): New Medium-Term Plan Vs. Reality

Japan

Tokyo Electron Limited manufactures and sells industrial electronics products, such as semiconductor manufacturing machines, computer system, and electronic components.  The Company products are sold in US, Taiwan, and others as well as in Japan.

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Tokyo Electron Ltd Unsp Adr (TOELY US)

Last Week in Event SPACE: BYD, Astra/United Tractor, Japan Passive, AGL, Genting Singapore

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

JAPAN PASSIVE: Who Owns What 2022?

JAPAN PASSIVE: Who Owns What 2022 Version. This is a mark to market of the passive tracking data from domestic and international investors in...

Travis Lundy

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

Tokyo Electron (8035): Semiconductor Supply Chain at Risk of a Downturn

Nanya warning of a downturn follows excess inventory report from Samsung. Even smartphone and data center demand at risk. End of the super cycle...

Scott Foster

Tokyo Electron (8035 JP): New Medium-Term Plan Vs. Reality

Management's new five-year plan assumes a favorable operating environment through FY Mar-27. That seems over-optimistic. In view of economic...

Scott Foster

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