Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Quantitative Analysis

In June 2020, we saw some interesting TSE1 Approval announcements including names like <a href="https://www.smartkarma.com/entities/tsuzuki-denki-co-ltd" target="_blank" data-smartkarma-citation="entities:8270:1" rel="noopener">Tsuzuki Denki (8157 JP)</a> and <a href="https://www.smartkarma.com/entities/mixi-inc" target="_blank" data-smartkarma-citation="entities:602:1" rel="noopener">Mixi Inc (2121 JP)</a> which enjoyed strong price rallies following their announcements. As of end-June, there were 10 live pre-events, 5 live inclusion events, and a half dozen just-post-inclusion names which announced in April/May 2020 which entered TOPIX at the end of June and July. These were discussed in detail in <a href="https://www.smartkarma.com/insights/topix-inclusion-trade-summary-june-2020" target="_blank" data-smartkarma-citation="insights:40784" rel="noopener">TOPIX Inclusion Trade Summary: June 2020</a>. In this month's summary, I have provided updates on our "TOPIX Inclusion Pre-events Watchlist" and how a equally-weighted portfolio constructed according to <a href="https://www.smartkarma.com/insights/topix-inclusion-pre-events-post-ipo-basket-trade-in-detail" target="_blank" data-smartkarma-citation="insights:41411" rel="noopener">TOPIX Inclusion Pre-Events: Post-IPO Basket Trade in Detail</a> would have performed in the month of July. I have also provided a summary of six "Live Events" which are expected to have their TOPIX Inclusion events at the end of August 2020 and a list of four just-post-inclusion names which have had their Inclusion events at the end of May/June 2020. As always, there is more below the fold.

In June 2020, we saw some interesting TSE1 Approval announcements including names like Tsuzuki Denki (8157 JP) and Mixi Inc (2121 JP) which enjoyed strong price rallies following their announcements. As of end-June, there were 10 live pre-events, 5 live inclusion events, and a half dozen just-post-inclusion names which announced in April/May 2020 which entered TOPIX at the end of June and July. These were discussed in detail in TOPIX Inclusion Trade Summary: June 2020. In this month's summary, I have provided updates on our "TOPIX Inclusion Pre-events Watchlist" and how a equally-weighted portfolio constructed according to TOPIX Inclusion Pre-Events: Post-IPO Basket Trade in Detail would have performed in the month of July. I have also provided a summary of six "Live Events" which are expected to have their TOPIX Inclusion events at the end of August 2020 and a list of four just-post-inclusion names which have had their Inclusion events at the end of May/June 2020. As always, there is more below the fold.

In my last "Pre-events" based insight <a href="https://www.smartkarma.com/insights/topix-inclusion-pre-events-recent-tachiaigai-bunbai-round-up" target="_blank" data-smartkarma-citation="insights:40509" rel="noopener">TOPIX Inclusion Pre-Events: Recent "Tachiaigai Bunbai" Round-Up</a>, we looked at all the tachiaigai bunbai offerings announcements in the previous 30 days and recommended additions to a TOPIX Inclusion Pre-event Watchlist. A couple of weeks later, I updated this Watchlist in my month-end update <a href="https://www.smartkarma.com/insights/topix-inclusion-trade-summary-june-2020" target="_blank" data-smartkarma-citation="insights:40784" rel="noopener">TOPIX Inclusion Trade Summary: June 2020</a>. While tachiaigai bunbai offerings are one of the most commonly observed pre-event signals, not all TOPIX Inclusions candidates launch such equity offerings in the run up to their TSE moves. In fact, all else equal, stocks that are not required to launch such offerings usually are more bullish scenarios in the supply-demand balance of the event and as recently observed in the cases of <a href="https://www.smartkarma.com/insights/topix-inclusion-retail-partners-8167-jp" target="_blank" data-smartkarma-citation="insights:38782" rel="noopener">TOPIX Inclusion: Retail Partners (8167 JP)</a> and <a href="https://www.smartkarma.com/insights/topix-inclusion-8157-jp-tsuzuki-denki" target="_blank" data-smartkarma-citation="insights:40444" rel="noopener">TOPIX Inclusion (8157 JP): Tsuzuki Denki</a>, these ones have the potential to enjoy strong rallies in the run up to their Inclusions Events. In this Insight, I have used an alternative approach to identify such stocks that are currently listed in TSE2, MOTHERS, or JASDAQ and are currently capable of satisfying most of the TSE1 Section Transfer Requirements without having to launch any substantial equity offerings.

In my last "Pre-events" based insight TOPIX Inclusion Pre-Events: Recent "Tachiaigai Bunbai" Round-Up, we looked at all the tachiaigai bunbai offerings announcements in the previous 30 days and recommended additions to a TOPIX Inclusion Pre-event Watchlist. A couple of weeks later, I updated this Watchlist in my month-end update TOPIX Inclusion Trade Summary: June 2020. While tachiaigai bunbai offerings are one of the most commonly observed pre-event signals, not all TOPIX Inclusions candidates launch such equity offerings in the run up to their TSE moves. In fact, all else equal, stocks that are not required to launch such offerings usually are more bullish scenarios in the supply-demand balance of the event and as recently observed in the cases of TOPIX Inclusion: Retail Partners (8167 JP) and TOPIX Inclusion (8157 JP): Tsuzuki Denki, these ones have the potential to enjoy strong rallies in the run up to their Inclusions Events. In this Insight, I have used an alternative approach to identify such stocks that are currently listed in TSE2, MOTHERS, or JASDAQ and are currently capable of satisfying most of the TSE1 Section Transfer Requirements without having to launch any substantial equity offerings. 

TOPIX Inclusion Pre-Events: Who Is Ready?

Japan

Base Co., Ltd. offers inforamtion technology services. The Company provides computer programming, system integration, solution development, software development, and other services. Base provides its services throughout Japan.

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Base Co Ltd (4481 JP)

TOPIX Inclusion Trade Summary: July 2020

In June 2020, we saw some interesting TSE1 Approval announcements including names like Tsuzuki Denki (8157 JP) and Mixi Inc (2121 JP) which enjoyed...

Janaghan Jeyakumar, CFA

TOPIX Inclusion Pre-Events: Who Is Ready?

In my last "Pre-events" based insight TOPIX Inclusion Pre-Events: Recent "Tachiaigai Bunbai" Round-Up, we looked at all the tachiaigai bunbai...

Janaghan Jeyakumar, CFA

Price Gauge

52-week Range

Market Cap (USDm)

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