Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

NTT (Nippon Telegraph & Telephone) / Event-Driven

<ul>
<li>
<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> will likely buy back more shares than previously expected as the government sells shares down. Buy dips vs peers KDDI and Softbank Corp. This is a long-term tilt.</li>
<li>There are some doubts over the fate of <a href="https://www.smartkarma.com/entities/delta-electronics-thai-pcl" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thai (DELTA TB)</a>'s SET50 membership, at present, but it should escape deletion in December 2023. </li>
<li>Don't punt <a href="https://www.smartkarma.com/entities/fortescue-metals-group-ltd" target="_blank" data-smartkarma-citation="entities:41:1" rel="noopener">Fortescue Metals (FMG AU)</a> on the off-chance of a change of control in the wake pf the Forrest split. If anything, there might be a leakage of shares.</li>
</ul>



NTT (9432 JP) will likely buy back more shares than previously expected as the government sells shares down. Buy dips vs peers KDDI and Softbank Corp. This is a long-term tilt.
There are some doubts over the fate of Delta Electronics Thai (DELTA TB)'s SET50 membership, at present, but it should escape deletion in December 2023. 
Don't punt Fortescue Metals (FMG AU) on the off-chance of a change of control in the wake pf the Forrest split. If anything, there might be a leakage of shares.


Last Week in Event SPACE: NTT, Delta Electronics, Fortescue Metals, Nomura Real Estate

Travis Lundy

<ul>
<li>Six weeks ago, LDP Policy Research Council chairman KAGIUDA led a discussion about full NTT privatisation to fund defence. Today he said serious deliberations begin in August. Shares fell today.</li>
<li>The LDP wants non-tax resources to increase defence/social spending. Selling would require a change in NTT Law, but the argument is that communications have changed/internationalised.</li>
<li>As discussed in <a href="https://www.smartkarma.com/insights/ntt-9432-jp-would-the-govt-sell-all-its-shares-why-how-how-long-overhang" target="_blank" data-smartkarma-citation="insights:104184" rel="noopener">NTT (9432 JP) - Would the Govt Sell All Its Shares? Why? How? How Long? Overhang?</a>, there are questions on overhang. BUT... presumably there are mitigants. </li>
</ul>


Six weeks ago, LDP Policy Research Council chairman KAGIUDA led a discussion about full NTT privatisation to fund defence. Today he said serious deliberations begin in August. Shares fell today.
The LDP wants non-tax resources to increase defence/social spending. Selling would require a change in NTT Law, but the argument is that communications have changed/internationalised.
As discussed in NTT (9432 JP) - Would the Govt Sell All Its Shares? Why? How? How Long? Overhang?, there are questions on overhang. BUT... presumably there are mitigants. 


NTT (9432) - LDP Consideration of Full Sale Is Not Necessarily Overhang

<ul>
<li>Today, <a href="https://www.smartkarma.com/entities/monex-group-inc" target="_blank" data-smartkarma-citation="entities:14211:1" rel="noopener">Monex Group Inc (8698 JP)</a> and <a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (Nippon Telegraph &amp; Telephone) (9432 JP)</a>'s NTT Docomo announced a Capital and Business Alliance Agreement. It is a complicated deal.</li>
<li>Monex GROUP will create a holdco which owns Monex Inc (the broker) and sell 51% to Docomo. Docomo will consolidate. Monex Group will own 49% as an equity method affiliate.</li>
<li>Monex GROUP will then double its dividend, maybe buy back shares, and expects to grow as Docomo pushes and Monex invests. But what remains is a mixed bag.</li>
</ul>


Today, Monex Group Inc (8698 JP) and NTT (Nippon Telegraph &amp; Telephone) (9432 JP)'s NTT Docomo announced a Capital and Business Alliance Agreement. It is a complicated deal.
Monex GROUP will create a holdco which owns Monex Inc (the broker) and sell 51% to Docomo. Docomo will consolidate. Monex Group will own 49% as an equity method affiliate.
Monex GROUP will then double its dividend, maybe buy back shares, and expects to grow as Docomo pushes and Monex invests. But what remains is a mixed bag.


NTT Docomo's Deal with Monex (8698); The Goal Is Bigger and Better but Not Compelling Yet

Telco/Internet specialist

Kirk Boodry

Redex Research

Thematic (Sector/Industry)

<ul>
<li>Google will invest $735mn (¥105bn) through 2023 on Japan infrastructure including its first local data center and additional subsea capacity</li>
<li>The Google CEO met with Prime Minister Kishida and the announcement scores political points but it also makes sense with a material JP business and the weak yen</li>
<li>Google is probably Japan's largest Internet advertising company with an estimated ¥685bn in FY21 sales</li>
</ul>


Google will invest $735mn (¥105bn) through 2023 on Japan infrastructure including its first local data center and additional subsea capacity
The Google CEO met with Prime Minister Kishida and the announcement scores political points but it also makes sense with a material JP business and the weak yen
Google is probably Japan's largest Internet advertising company with an estimated ¥685bn in FY21 sales


Google in Japan - Infrastructure Investments Highlight Japan Growth and Forex Shift

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>At the October rebalance, there are 970 stocks that will have a lower FFW while 114 stocks will have a higher FFW. 493 stocks will undergo a Phased Weight Reduction.</li>
<li>Estimated one-way turnover is 2.54% resulting in a one-way trade of ¥1.815tn. 500 stocks have over 4 days ADV to trade, 100 stocks have over 9 days ADV to trade.</li>
<li>Setting the threshold at +/-US$50m to trade, the stocks with inflows have outperformed the stocks with outflows by 6.5% over the last four months.</li>
</ul>


At the October rebalance, there are 970 stocks that will have a lower FFW while 114 stocks will have a higher FFW. 493 stocks will undergo a Phased Weight Reduction.
Estimated one-way turnover is 2.54% resulting in a one-way trade of ¥1.815tn. 500 stocks have over 4 days ADV to trade, 100 stocks have over 9 days ADV to trade.
Setting the threshold at +/-US$50m to trade, the stocks with inflows have outperformed the stocks with outflows by 6.5% over the last four months.


TOPIX October Rebalance: BIG One With ¥1.8tn a Side to Trade

Japan

USEN-NEXT HOLDINGS Co.,Ltd. provides network information services. The Company provides video contents distribution, music contents distribution, and other services. USEN-NEXT HOLDINGS also provides internet agency, mobile communication, and other services.

SoftBank Group Corp. provides telecommunication services. The Company also operates ADSL (Asymmetric Digital Subscriber Line) and fiber optic high-speed Internet connection, e-Commerce businesses, and Internet based advertising and auction businesses.

KDDI CORPORATION provides mobile communication services and sells mobile devices.  The Company also is a broadband provider.

Softbank Corporation provides mobile phone telecommunication and networking services. The Company offers mobile communication opening, short messaging function opening, video function opening, and other services. Softbank also provides mobile phones.

ARTERIA Networks Corporation provides telecommunication services. The Company offers internet connection, virtual private network construction, colocation, mobile connection, mobile device management, optical fiber network construction, and other services.

Vision Inc. provides a variety of telecommunication services, including fixed-line telecom, wireless telecom and wifi services. The company also provides distribution and lease service of office equipments and communications equipments.

FreeBit Co., Ltd. provides Internet connectivity outsourcing services for Internet service providers.  The Company also offers ubiquitous networking environment.  FreeBit provides consulting services for Internet related businesses as well.

Broadmedia Corporation provides broadband service, CDN (contents delivery network), and media contents belonging to Softbank broadcasting. Broadmedia also markets game on demand service.

Nintendo Co., Ltd. globally develops, manufactures and sells home-use video game hardware and software in home entertainment business.  The company also produces home-game products including cards.

OKINAWA CELLULAR TELEPHONE COMPANY provides cellular and car phone services in Okinawa Prefecture.  The Company also sells cellular phones and accessories.

China Telecom Corporation Limited, through its subsidiaries, provides wireline telephone, data, and Internet, as well as leased line services in China.

Deutsche Telekom AG offers telecommunications services.  The Company offers a full range of fixed-line telephone services, mobile communications services, Internet access, and combined information technology and telecommunications services for businesses.

Singapore Telecommunications Limited wireless telecommunication services. The Company offers diverse range of services including fixed, mobile, data, internet, TV,  and digital solutions. Singapore Telecommunications serves customers worldwide.

Telstra Corporation Limited is a full service domestic and international telecommunications provider for Australia.  The Company provides telephone exchange lines to homes and businesses, supplying local, long distance and international telephone calls and supplying mobile telecommunications services. Telstra also provides data, internet, on-line services and directory services.

AT&T Inc. is a communications holding company. The Company, through its subsidiaries and affiliates, provides local and long-distance phone service, wireless and data communications, Internet access and messaging, IP-based and satellite television, security services, telecommunications equipment, and directory advertising and publishing.

China Unicom (Hong Kong) Limited, through its subsidiaries, provides telecommunications services in the People's Republic of China.  The Company's services include cellular, paging, long distance, data, and Internet services.

Chunghwa Telecom Co., Ltd. provides local, domestic, and international long distance services. The Company also offers wireless telecommunication, paging, and Internet services.

Cellnex Telecom S.A.U. is an independent operator of wireless telecommunications infrastructure and broadcast infrastructure. The Company's sites are located in Spain and Italy.

Telefonica S.A. provides telecommunications services mainly to countries in Europe and Latin America.  The Company offers fixed-line and mobile telephone, Internet, and data transmission services to residential and corporate customers.

Orange SA provides telecommunications services to residential, professional, and large business customers. The Company offers public fixed-line telephone, leased lines and data transmission, mobile telecommunications, cable television, Internet and wireless applications, and broadcasting services, and telecommunications equipment sales and rentals.

Nippon Telegraph and Telephone Corporation provides a variety of telecommunication services, including telephone, telegraph, leased circuits, data communication, terminal equipment sales, and related services. The Company provides both local and long distance telephone services within Japan.

NTT (Nippon Telegraph & Telephone) (9432 JP)

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NTT (Nippon Telegraph & Telephone) (9432 JP)

Last Week in Event SPACE: NTT, Delta Electronics, Fortescue Metals, Nomura Real Estate

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

NTT (9432) - LDP Consideration of Full Sale Is Not Necessarily Overhang

NTT dropped today outright and vs peers on news that the LDP is moving forward with "serious consideration" about a full selldown to fund defence...

Travis Lundy

NTT Docomo's Deal with Monex (8698); The Goal Is Bigger and Better but Not Compelling Yet

NTT Docomo is going to take control of Monex Group's securities business leaving Monex with a 49% interest, some cash, the TradeStation biz,...

Travis Lundy

Google in Japan - Infrastructure Investments Highlight Japan Growth and Forex Shift

Increased investment in Japan makes sense as its business is growing and the dollar has strengthened. In-country facilities should mean better...

Kirk Boodry

TOPIX October Rebalance: BIG One With ¥1.8tn a Side to Trade

Lower FFWs on 970 stocks and higher FFWs on 114 stocks will result in one-way turnover of 2.52% leading to a one-way trade of ¥1.8tn at the close...

Brian Freitas

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