Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<p>In June 2020, we looked at <a href="https://www.smartkarma.com/insights/historical-topix-inclusions-what-flavor-performs-best" target="_blank" data-smartkarma-citation="insights:39523" rel="noopener">Historical TOPIX Inclusions:  What Flavor Performs Best?</a> which built and described Quiddity's Framework to identify attractive TOPIX Inclusion Trades using their Inclusion Parameters such as size and liquidity characteristics. Since then, we have utilized this framework to differentiate TOPIX Inclusion trades to provide better guidance for our readers.</p><p>However, with new TSE Section Transfer Requirements being introduced this year, there is a requirement for this framework to be upgraded and as a starting point, this insight will address one of the main shortcomings of our existing framework - accounting for the impact of equity offerings. We have done so on an ad hoc basis, but we had not done quantitative work on the differences.</p><p>Many Japanese stocks which earn TSE1 promotion end up launching equity offerings to increase their float, liquidity, and/or shareholder counts to satisfy the Section Transfer Requirements. Such offerings often have a significant impact on the stocks' performance in the run up to their TOPIX Inclusion Events and have important implications for investors who want to take part in the trade. </p><p>In this insight, we take a look at how to deal with the impact of these equity offerings by analysing precedents from the last 12 months. </p>

In June 2020, we looked at Historical TOPIX Inclusions:  What Flavor Performs Best? which built and described Quiddity's Framework to identify attractive TOPIX Inclusion Trades using their Inclusion Parameters such as size and liquidity characteristics. Since then, we have utilized this framework to differentiate TOPIX Inclusion trades to provide better guidance for our readers.However, with new TSE Section Transfer Requirements being introduced this year, there is a requirement for this framework to be upgraded and as a starting point, this insight will address one of the main shortcomings of our existing framework - accounting for the impact of equity offerings. We have done so on an ad hoc basis, but we had not done quantitative work on the differences.Many Japanese stocks which earn TSE1 promotion end up launching equity offerings to increase their float, liquidity, and/or shareholder counts to satisfy the Section Transfer Requirements. Such offerings often have a significant impact on the stocks' performance in the run up to their TOPIX Inclusion Events and have important implications for investors who want to take part in the trade. In this insight, we take a look at how to deal with the impact of these equity offerings by analysing precedents from the last 12 months. 

TOPIX Inclusions: How to Account for The Impact of Equity Offerings

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

<p>The <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a> TOPIX Inclusion has a day and a bit to run until the event. </p>
<p>There has been some excess volume since the announcement, but less than the actual inclusion event buying to be done.</p>
<section class="figure">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/190/490/original/Screenshot+2021-02-24+at+8.47.57+AM.png?1614127693" class="editor-image img-responsive" data-smartkarma-image-id="190490"></figure>
</section>
<p></p>
<p>There are reasons why the event itself may have different patterns than some expect.</p>

The Toshiba Corp (6502 JP) TOPIX Inclusion has a day and a bit to run until the event. 
There has been some excess volume since the announcement, but less than the actual inclusion event buying to be done.




There are reasons why the event itself may have different patterns than some expect.

Toshiba TOPIX Inclusion - Weak Excess Volume So Far

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/lenovo-group-ltd" target="_blank" data-smartkarma-citation="entities:13359:1" rel="noopener">Lenovo (992 HK)</a>, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, <a href="https://www.smartkarma.com/entities/aia-group-ltd" target="_blank" data-smartkarma-citation="entities:14895:1" rel="noopener">AIA Group Ltd (1299 HK)</a> and <a href="https://www.smartkarma.com/entities/nongfu-spring" target="_blank" data-smartkarma-citation="entities:28955:1" rel="noopener">Nongfu Spring (9633 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/wuxi-apptec" target="_blank" data-smartkarma-citation="entities:23679:1" rel="noopener">Wuxi Biologics (2269 HK)</a>, <a href="https://www.smartkarma.com/entities/jinxin-fertility-group-ltd" target="_blank" data-smartkarma-citation="entities:28003:1" rel="noopener">Jinxin Fertility Co Ltd (1951 HK)</a> and <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a>. Shorts increased on Real Estate, Communication Services and Information Technology, while decreasing on Consumer Discretionary, Health Care and Financials.</p></div><div><p>In Japan, stocks that saw the most shorts were <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a>, <a href="https://www.smartkarma.com/entities/freee-kk" target="_blank" data-smartkarma-citation="entities:28424:1" rel="noopener">freee (4478 JP)</a>, <a href="https://www.smartkarma.com/entities/anritsu-corp" target="_blank" data-smartkarma-citation="entities:3700:1" rel="noopener">Anritsu Corp (6754 JP)</a> and <a href="https://www.smartkarma.com/entities/hino-motors-ltd" target="_blank" data-smartkarma-citation="entities:2144:1" rel="noopener">Hino Motors Ltd (7205 JP)</a> while shorts decreased on <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a>, <a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" data-smartkarma-citation="entities:1:1" rel="noopener">Canon Inc (7751 JP)</a>, <a href="https://www.smartkarma.com/entities/yaskawa-electric-corp" target="_blank" data-smartkarma-citation="entities:2458:1" rel="noopener">Yaskawa Electric (6506 JP)</a> and <a href="https://www.smartkarma.com/entities/taiyo-yuden-co-ltd" target="_blank" data-smartkarma-citation="entities:9924:1" rel="noopener">Taiyo Yuden (6976 JP)</a>. Sectorally, shorts increased marginally in Information Technology and Consumer Staples, while decreasing in Industrials and Communication Services.</p></div><div><p>In Korea, short increased on <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>, <a href="https://www.smartkarma.com/entities/naver-corp" target="_blank" data-smartkarma-citation="entities:16029:1" rel="noopener">Naver Corp (035420 KS)</a>, <a href="https://www.smartkarma.com/entities/samsung-sdi-co-ltd" target="_blank" data-smartkarma-citation="entities:503:1" rel="noopener">Samsung SDI (006400 KS)</a> and <a href="https://www.smartkarma.com/entities/kia-motors-corp" target="_blank" data-smartkarma-citation="entities:156:1" rel="noopener">Kia Motors Corp (000270 KS)</a> while shorts decreased on <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a>, <a href="https://www.smartkarma.com/entities/gs-engineering-construct" target="_blank" data-smartkarma-citation="entities:15916:1" rel="noopener">GS Engineering &amp; Construction (006360 KS)</a> and <a href="https://www.smartkarma.com/entities/hana-financial-group" target="_blank" data-smartkarma-citation="entities:12843:1" rel="noopener">Hana Financial (086790 KS)</a>. </p></div><div><p>Stocks in Taiwan that saw the highest increase in shorts were <a href="https://www.smartkarma.com/entities/pegatron-corp" target="_blank" data-smartkarma-citation="entities:12852:1" rel="noopener">Pegatron Corp (4938 TT)</a>, <a href="https://www.smartkarma.com/entities/asmedia-technology-inc" target="_blank" data-smartkarma-citation="entities:15732:1" rel="noopener">Asmedia Technology (5269 TT)</a>, <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a> and <a href="https://www.smartkarma.com/entities/largan-precision-co-ltd" target="_blank" data-smartkarma-citation="entities:9126:1" rel="noopener">Largan Precision (3008 TT)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/united-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:6450:1" rel="noopener">United Microelectronics Corp (2303 TT)</a>, <a href="https://www.smartkarma.com/entities/au-optronics-corp" target="_blank" data-smartkarma-citation="entities:6704:1" rel="noopener">Au Optronics (2409 TT)</a>, <a href="https://www.smartkarma.com/entities/alchip-technologies-ltd" target="_blank" data-smartkarma-citation="entities:20219:1" rel="noopener">Alchip Technologies (3661 TT)</a> and <a href="https://www.smartkarma.com/entities/flexium-interconnect-inc" target="_blank" data-smartkarma-citation="entities:15897:1" rel="noopener">Flexium Interconnect (6269 TT)</a>.</p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on Lenovo (992 HK), Tencent Holdings (700 HK), AIA Group Ltd (1299 HK) and Nongfu Spring (9633 HK) while there was short covering on Ping An Insurance (H) (2318 HK), Alibaba Group (9988 HK), Wuxi Biologics (2269 HK), Jinxin Fertility Co Ltd (1951 HK) and JD.com Inc. (9618 HK). Shorts increased on Real Estate, Communication Services and Information Technology, while decreasing on Consumer Discretionary, Health Care and Financials.In Japan, stocks that saw the most shorts were Toshiba Corp (6502 JP), freee (4478 JP), Anritsu Corp (6754 JP) and Hino Motors Ltd (7205 JP) while shorts decreased on Itochu Corp (8001 JP), Canon Inc (7751 JP), Yaskawa Electric (6506 JP) and Taiyo Yuden (6976 JP). Sectorally, shorts increased marginally in Information Technology and Consumer Staples, while decreasing in Industrials and Communication Services.In Korea, short increased on Samsung Electronics (005930 KS), Naver Corp (035420 KS), Samsung SDI (006400 KS) and Kia Motors Corp (000270 KS) while shorts decreased on Celltrion Inc (068270 KS), GS Engineering &amp; Construction (006360 KS) and Hana Financial (086790 KS). Stocks in Taiwan that saw the highest increase in shorts were Pegatron Corp (4938 TT), Asmedia Technology (5269 TT), TSMC (2330 TT) and Largan Precision (3008 TT) while shorts were covered on United Microelectronics Corp (2303 TT), Au Optronics (2409 TT), Alchip Technologies (3661 TT) and Flexium Interconnect (6269 TT).

Asia Short Interest: Lenovo, AIA, Nongfu, Wuxi Bio, Toshiba, Freee, Canon, Samsung, Celltrion, TSMC

Semiconductors, Memory and SSDs Specialist, Objective Analysis

Jim Handy

Semiconductors, Memory and SSDs Specialist

Objective Analysis

Objective Analysis offers third-party independent market research and data for the semiconductor industry and investors in the semiconductor industry.

Semiconductors, Memory and SSDs

Thematic (Sector/Industry)

<p>Saturday's 7.1 earthquake in Japan could have caused important supply disruptions for semiconductors.  We reached out to over a dozen companies to check their status, and those who replied indicated that there was little impact.  Still, the automotive sector has reason to be nervous.</p>

Saturday's 7.1 earthquake in Japan could have caused important supply disruptions for semiconductors.  We reached out to over a dozen companies to check their status, and those who replied indicated that there was little impact.  Still, the automotive sector has reason to be nervous.

Japan Quake and Chip Shortages, Tough on Auto?

Global Special Situations & Strategy, SR Services Ltd

David Lepper

Global Special Situations & Strategy

SR Services Ltd

SR Services provides Strategic Knowledge and Solutions services for Family Offices and Corporate Business. 

We deliver this via advisory services, strategic planning, opportunity analysis/sourcing, as well as solution implementation. 

Whilst, we create intellectual discipline and operational leverage for your projects or daily activities, our ultimate objective is to empower whilst enhancing your decision making. 

Strategic Knowledge and Solutions

Cross Asset Strategy

<p>2020 saw Asia Pacific activist campaigns down 9.7% YoY. Considering the issues which played out over the year this is a better than expected result. What is key is that Asia remained resilient compared to Europe which saw a 16% YoY decline, in activism campaigns respectively. Sifting through the data highlights some interesting and share price impactful trends when looking at how Activism may play out in 2021.</p>

2020 saw Asia Pacific activist campaigns down 9.7% YoY. Considering the issues which played out over the year this is a better than expected result. What is key is that Asia remained resilient compared to Europe which saw a 16% YoY decline, in activism campaigns respectively. Sifting through the data highlights some interesting and share price impactful trends when looking at how Activism may play out in 2021.

Notes from the Silk Road: Activism - 2020 Review Reveals Some Interesting Trends

Japan

Toshiba Corporation manufactures and markets electrical and electronic products. The Company's products include digital products such as PCs and televisions, NAND flash memories, and system LSIs (large-scale integrated), as well as social infrastructures such as power generators, medical equipment, and home appliances.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Toshiba Corp (6502 JP)

TOPIX Inclusions: How to Account for The Impact of Equity Offerings

Another insight in the series on TOPIX Inclusion Event Trading. This one looks at the relative impact of offerings conducted in conjunction with...

Janaghan Jeyakumar, CFA

Toshiba TOPIX Inclusion - Weak Excess Volume So Far

Toshiba goes into TOPIX on 25 Feb 2021 (and there is a top-up TOPIX reweight of 14mm shares likely end-April). Excess volume has been light and...

Travis Lundy

Asia Short Interest: Lenovo, AIA, Nongfu, Wuxi Bio, Toshiba, Freee, Canon, Samsung, Celltrion, TSMC

The Insight looks at large short interest movements across HK, Japan, Korea and Taiwan stocks and highlights large increases/decreases in shorts to...

Brian Freitas

Japan Quake and Chip Shortages, Tough on Auto?

Will Saturday's Japan earthquake further disrupt the semiconductor supply chain? Early reports seem tame enough, but automobile manufacturers are...

Jim Handy

Notes from the Silk Road: Activism - 2020 Review Reveals Some Interesting Trends

2020 activism numbers are in with some interesting underlying trends reflecting possibilities of how campaigns in 2021 & 2022 may evolve notably...

David Lepper

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)