Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Capital Markets

<ul>
<li>Today after the close, <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> announced that <a href="https://www.smartkarma.com/entities/ms-ad-insurance-group-holdings" target="_blank" data-smartkarma-citation="entities:631:1" rel="noopener">MS&amp;AD Insurance (8725 JP)</a> and <a href="https://www.smartkarma.com/entities/sumitomo-mitsui-financial-group-inc" target="_blank" data-smartkarma-citation="entities:217:1" rel="noopener">Sumitomo Mitsui Financial Group (8316 JP)</a> would sell 14.9mm shares in an offering.</li>
<li>This will get priced today or tomorrow, sold to institutional investors. This is ¥107bn, 4 days of ADV and 1% of shares out. It is not dilutive. </li>
<li>Mitsui &amp; Co has a buyback program with ¥123bn left til end-Sep, when presumably it will reload. Looks easy today, but measuring Mitsui &amp; Co vs Peers is less flattering.</li>
</ul>


Today after the close, Mitsui &amp; Co Ltd (8031 JP) announced that MS&amp;AD Insurance (8725 JP) and Sumitomo Mitsui Financial Group (8316 JP) would sell 14.9mm shares in an offering.
This will get priced today or tomorrow, sold to institutional investors. This is ¥107bn, 4 days of ADV and 1% of shares out. It is not dilutive. 
Mitsui &amp; Co has a buyback program with ¥123bn left til end-Sep, when presumably it will reload. Looks easy today, but measuring Mitsui &amp; Co vs Peers is less flattering.


Mitsui & Co (8031) - ¥100bn Overnight Equity Offering

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.

Event-Driven

<ul>
<li>The Japanese Financial Services Agency has asked the general insurers to reduce/eliminate their cross-shareholdings.</li>
<li>
<a href="https://www.smartkarma.com/entities/tokio-marine-holdings-inc" target="_blank" data-smartkarma-citation="entities:7591:1" rel="noopener">Tokio Marine Holdings (8766 JP)</a> had a stake over US$100m in at least 33 listed Japanese stocks, amounting to a total of US$16.5bn.</li>
<li>In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.</li>
</ul>


The Japanese Financial Services Agency has asked the general insurers to reduce/eliminate their cross-shareholdings.

Tokio Marine Holdings (8766 JP) had a stake over US$100m in at least 33 listed Japanese stocks, amounting to a total of US$16.5bn.
In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.


Tokio Marine Cross-Shareholding - At Least US$18bn of Cross-Shareholding to Sell

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>We continue to view the latest pullback as healthy/normal within the ongoing bull market, and it is quite possible that the lows have been established on MSCI ACWI (ACWI-US).</li>
<li>Upgrading EM to Market Weight; MSCI Emerging Markets, China (shanghai Composite) and Hong Kong (Hang Seng) Still Bottoming; we discussed buying in our February 23, 2024<em> Int'l Compass</em>
</li>
<li>Commodities all appear to be rolling over near resistance, which is what we discussed to watch for in our April 18, 2024 <em>Int'l Compass. </em>This has bullish implications for ACWI</li>
</ul>


We continue to view the latest pullback as healthy/normal within the ongoing bull market, and it is quite possible that the lows have been established on MSCI ACWI (ACWI-US).
Upgrading EM to Market Weight; MSCI Emerging Markets, China (shanghai Composite) and Hong Kong (Hang Seng) Still Bottoming; we discussed buying in our February 23, 2024 Int'l Compass

Commodities all appear to be rolling over near resistance, which is what we discussed to watch for in our April 18, 2024 Int'l Compass. This has bullish implications for ACWI


Upgrading Emerging Markets to Market Weight; China/Hong Kong Continue to Bottom; Energy Breakdowns

<ul>
<li>The Japanese Financial Services Agency has asked the general insurers to reduce/eliminate their cross-shareholdings.</li>
<li>
<a href="https://www.smartkarma.com/entities/sompo-holdings-inc" target="_blank" data-smartkarma-citation="entities:632:1" rel="noopener">Sompo Holdings (8630 JP)</a> had a stake over US$100m in at least 16 listed Japanese stocks, amounting to a total of around US$6bn.</li>
<li>In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.</li>
</ul>


The Japanese Financial Services Agency has asked the general insurers to reduce/eliminate their cross-shareholdings.

Sompo Holdings (8630 JP) had a stake over US$100m in at least 16 listed Japanese stocks, amounting to a total of around US$6bn.
In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.


Sompo Holdings Cross-Shareholding - At Least US$8bn of Cross-Shareholding to Sell

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

<ul>
<li>JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.</li>
<li>A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.</li>
<li>Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2024 based on trading data as of end-October 2023.</li>
</ul>


JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.
Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2024 based on trading data as of end-October 2023.


Quiddity JPX-Nikkei 400 Rebal 2024: End-Oct 2023

Japan

Sumitomo Corp is a general trading company.  The Company imports and exports a wide variety of goods such as metals, machinery, chemicals, fuel,food products, and textiles.  Sumitomo also operates real estate, construction, shipping, insurance, finance, and leasing businesses.

TOYOTA TSUSHO CORPORATION, a member of the Toyota Group, is a trading company. The Company markets automobiles, trucks, steel products, industrial machinery, chemical products, and energy in both domestic and overseas markets.  Toyota Tsusho primarily exports Toyota cars to Southeast Asia, China, the Middle East, and Latin America.

MonotaRO Co., Ltd. mainly sells machine tools, engine parts, and factory consumable goods on the web site.

Sojitz Corporation is a general trading company.  The Company has business divisions such as Machinery & Aerospace, Energy & Mineral Resources, Chemicals & Plastics, Real Estate Development & Forest Products, Consumer Lifestyle Business, and New Business Development Group.  Sojitz was formed through the business integration between Nichimen and Nissho Iwai.

MISUMI Group Inc. distributes precision machinery parts by mail order. The products include a variety of components such as press die, plastic mold, automated machinery, pc & network, and wiring.  The Company also sells supplies for factories, hospitals, and restaurants and semi-conductors by mail order.

IWATANI CORPORATION is a trading company supplying gases for industrial and household use.  The Company also handles fuel, consumer products, industrial materials, minerals, construction, agriculture, and medical products.  Iwatani produces liquid hydrogen with Mitsubishi Heavy Industries.

NAGASE & COMPANY, LTD. is a trading firm specializing in chemical products such as dyestuff, synthetic resins and rubber, and inorganic and organic chemicals.  The Company also handles electronics such as semiconductor manufacturing equipment and liquid crystal display (LCD) materials, as well as health care products such as cosmetics and medical equipment.

HANWA CO., LTD. wholesales, imports, and exports steel products, nonferrous metals, industrial machines, and food products.  The Company also handles chemical products, construction materials, and information equipment.  Hanwa has several subsidiaries and sales bases in the U.S. and around Asia.

INABA DENKI SANGYO CO., LTD. sells electric cables, plumbing products, and electronic equipment.  The Company's products include cables, electric switchboards, lighting equipment, sensors, and ducts.  Inaba Denki Sangyo also provides real estate management and data processing services.

KANEMATSU CORPORATION is a trading company handling textiles, fuel, chemicals, steel and housing construction materials, foodstuffs, and electronic equipment. The Company diversifies by operating a semiconductor-related IT (Information Technology) business.

Adani Enterprises Limited is an international trading house that operates from offices in India as well as other countries. The Company is involved in coal mining, cargo handling and power generation.  Adani also trades in a large number of products including textiles, energy, metals and agricultural products.

Reece Limited operates as a plumbing, building and hardware merchant throughout Australia.  The Company offers a variety of bathroom, kitchen and laundry products through its national stores and showrooms.  Reece's products are utilized by plumbers, consumers, architects, builders and interior designers.

United Rentals, Inc., through its subsidiary, is an equipment rental company operating a network of locations in the United States and Canada.  The Company serves the construction industry, industrial and commercial concerns, homeowners, and other individuals.

Fastenal Company sell industrial and construction supplies in a wholesale and retail fashion.  The Company markets its products and services throughout the United States, Canada, Mexico, Puerto Rico, Singapore, China, and The Netherlands.

Watsco, Inc. distributes air conditioning, heating, and refrigeration equipment, as well as related parts and supplies.  The Company operates various locations in the United States, with primary markets in the Sunbelt.

W.W. Grainger, Inc. distributes maintenance, repair and operating supplies, and related information to the commercial, industrial, contractor, and institutional markets in North America.  The Company's products include motors, HVAC equipment, lighting, hand and power tools, pumps, and electrical equipment.

Ashtead Group Plc is an international equipment rental company servicing customers nationwide in the US and the UK. The Company rents construction and industrial equipment. Ashtead generates approximately 85% of its revenue in the US through its subsidiary, Sunbelt Rentals with 388 locations across the US. The Group's UK business, A-Plant, has 106 locations nationwide.

Bunzl plc is a distribution group supplying a range of non-food consumable products for customers to operate their businesses but which they do not actually sell. The Company partners with both suppliers and customers in providing outsourcing solutions and service oriented distribution. Bunzl's main customer markets include grocery, foodservice, cleaning and safety.

Indutrade AB provides engineering and equipment, flow technology, industrial components, and special products.  The Company sells its products to industrial companies primarily in Northern Europe.

AerCap Holdings NV is the world's largest aircraft leasing firm by fleet value, and is listed on the New York Stock Exchange (AER). It has its headquarters in Dublin with offices in Amsterdam, Los Angeles, Shannon, Fort Lauderdale, Singapore, Shanghai, Abu Dhabi, Seattle and Toulouse.

Marubeni Corporation is a trading company with business divisions in iron & steel, information technology, utility & infrastructure, energy, food, metals & mineral resources, development & construction, and chemicals.  The Company markets its products globally through a network of sales offices and representative firms.

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Marubeni Corp (8002 JP)

Mitsui & Co (8031) - ¥100bn Overnight Equity Offering

MSAD Insurance, SMBC are selling 1.0% of TSO of Mitsui & Co (8031). Small deal at US$670mm and 3.7d of ADV on popular name. There's a buyback to...

Travis Lundy

Tokio Marine Cross-Shareholding - At Least US$18bn of Cross-Shareholding to Sell

Tokio Marine today announced that it aims to cut its cross-shareholding to zero by FY2029. It will aim to sell 50% of its holdings worth around...

Sumeet Singh

Upgrading Emerging Markets to Market Weight; China/Hong Kong Continue to Bottom; Energy Breakdowns

Upgrading Emerging Markets $EEM $VWO to Market Weight; China/Hong Kong Continue to Bottom $FXI $MCHI $KWEB; Lows Likely in on $ACWI; Commodities...

Vermilion Research

Sompo Holdings Cross-Shareholding - At Least US$8bn of Cross-Shareholding to Sell

The Japanese Financial Services Agency has asked the general insurers to reduce/eliminate their cross-shareholdings. Sompo had a stake of over...

Sumeet Singh

Quiddity JPX-Nikkei 400 Rebal 2024: End-Oct 2023

There are 36 Potential ADDs and 40 Potential DELs (unique names) presented in the current Quiddity Leaderboard. There are still 10 more months for...

Janaghan Jeyakumar, CFA

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