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

<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 rankings of the potential ADDs/DELs every month.</li>
<li>In this insight, we take a look at potential ADDs/DELs for the JPX-Nikkei 400 index rebal event to come in August 2024 based on trading data as of end-May 2024.</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 rankings of the potential ADDs/DELs every month.
In this insight, we take a look at potential ADDs/DELs for the JPX-Nikkei 400 index rebal event to come in August 2024 based on trading data as of end-May 2024.


Quiddity JPX-Nikkei 400 Rebal 2024: End-May 2024 Estimates

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Keisei Electric Railway Co / Event-Driven

<ul>
<li>Last October, activist Palliser Capital launched a campaign (<a href="https://www.businesswire.com/news/home/20231017540912/en/Palliser-Capital-Responds-to-Media-Article-Regarding-Investment-in-Keisei-Electric-Railway" target="_blank" rel="noopener">presentation</a>) on well-known "stub trade" <a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP)</a> with a stake of about 1.6%. </li>
<li>The proposal? Monetise a decent stake in Oriental Land (4661 JP), repurchase shares, and invest for growth. Keisei responded 6-8 weeks ago with a buyback and 1% OLC stake sale.</li>
<li>I thought that was time to bail. That was it. But now, Palliser has re-engaged. Today a press release (<a href="https://www.businesswire.com/news/home/20240423026545/ja/" target="_blank" rel="noopener">Japanese</a>/<a href="https://www.businesswire.com/news/home/20240423405941/en/Palliser-Capital-Proposes-Advisory-Resolution-to-Give-Shareholders-a-Voice-at-Keisei%E2%80%99s-Forthcoming-AGM" target="_blank" rel="noopener">English</a>) and a <a href="https://mms.businesswire.com/media/20240423405941/en/2107923/1/53951785_PALLISER_CAPITAL_20240424_Letter_to_Keisei_English_2.pdf?download=1" target="_blank" rel="noopener">Letter to the Board</a>.</li>
</ul>


Last October, activist Palliser Capital launched a campaign (presentation) on well-known "stub trade" Keisei Electric Railway Co (9009 JP) with a stake of about 1.6%. 
The proposal? Monetise a decent stake in Oriental Land (4661 JP), repurchase shares, and invest for growth. Keisei responded 6-8 weeks ago with a buyback and 1% OLC stake sale.
I thought that was time to bail. That was it. But now, Palliser has re-engaged. Today a press release (Japanese/English) and a Letter to the Board.


Activist Palliser Re-Engages on Keisei Electric (9009) But The Oppty Remains Unconvincing

<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 rankings of the potential ADDs/DELs every month.</li>
<li>Below is a look at potential ADDs/DELs for the JPX-Nikkei 400 index rebal event to come in August 2024 based on trading data as of end-April 2024.</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 rankings of the potential ADDs/DELs every month.
Below is a look at potential ADDs/DELs for the JPX-Nikkei 400 index rebal event to come in August 2024 based on trading data as of end-April 2024.


Quiddity JPX-Nikkei 400 Rebal 2024: End-Apr 2024 Estimates

David Blennerhassett

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pasona-group-inc" target="_blank" data-smartkarma-citation="entities:15778:1" rel="noopener">Pasona (2168 JP)</a>will pay out 10-20% of the extraordinary gain from the <a href="https://www.smartkarma.com/entities/benefit-one-inc" target="_blank" data-smartkarma-citation="entities:14502:1" rel="noopener">Benefit One (2412 JP)</a> sale. It will take its sweet time doing so. For no apparent reason.</li>
<li>
<a href="https://www.smartkarma.com/entities/hang-lung-properties-ltd" target="_blank" data-smartkarma-citation="entities:49:1" rel="noopener">Hang Lung Properties (101 HK)</a>'s first-ever scrip dividend provides the means for the Chan Family to indirectly chip away at minorities. </li>
<li>
<a href="https://www.smartkarma.com/entities/hollysys-automation-technologies" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">Hollysys Automation Technologies (HOLI US)</a> accountant resignation announcement is a nothing burger. An  update on PRC regulatory approvals would be welcome about now though. </li>
</ul>



Pasona (2168 JP)will pay out 10-20% of the extraordinary gain from the Benefit One (2412 JP) sale. It will take its sweet time doing so. For no apparent reason.

Hang Lung Properties (101 HK)'s first-ever scrip dividend provides the means for the Chan Family to indirectly chip away at minorities. 

Hollysys Automation Technologies (HOLI US) accountant resignation announcement is a nothing burger. An  update on PRC regulatory approvals would be welcome about now though. 


Last Week in Event SPACE: Pasona/Benefit One, Hang Lung Properties, Hollysys, Azure Minerals

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dai-ichi-life-insurance" target="_blank" data-smartkarma-citation="entities:1109:1" rel="noopener">Dai Ichi (8750 JP)</a> agreed with <a href="https://www.smartkarma.com/entities/pasona-group-inc" target="_blank" data-smartkarma-citation="entities:15778:1" rel="noopener">Pasona (2168 JP)</a> for Pasona to sell its shares back to <a href="https://www.smartkarma.com/entities/benefit-one-inc" target="_blank" data-smartkarma-citation="entities:14502:1" rel="noopener">Benefit One (2412 JP)</a> in a buyback after Dai-Ichi's Tender Offer for Benefit.</li>
<li>This process gives Pasona a tax advantage versus selling into a Tender Offer at the same price.</li>
<li>What does Pasona take home? ~¥2,822/share versus its last price of ¥2,733/share. Then you have stubs ops (conservatively worth up to ~¥1,960/share) and Pasona's stake in <a href="https://www.smartkarma.com/entities/bewith-inc" target="_blank" data-smartkarma-citation="entities:35846:1" rel="noopener">Bewith (9216 JP)</a> (~¥360/share).</li>
</ul>



Dai Ichi (8750 JP) agreed with Pasona (2168 JP) for Pasona to sell its shares back to Benefit One (2412 JP) in a buyback after Dai-Ichi's Tender Offer for Benefit.
This process gives Pasona a tax advantage versus selling into a Tender Offer at the same price.
What does Pasona take home? ~¥2,822/share versus its last price of ¥2,733/share. Then you have stubs ops (conservatively worth up to ~¥1,960/share) and Pasona's stake in Bewith (9216 JP) (~¥360/share).


Japan

Benefit One Inc. provides outsourcing services to major corporations in Japan. The Company provides a variety of benefit programs such as leisure, education, child care, nursing care and meal services for employees of the client companies.

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Benefit One Inc (2412 JP)

Quiddity JPX-Nikkei 400 Rebal 2024: End-May 2024 Estimates

There are 51 Potential ADDs and 49 Potential DELs (unique names) presented in our latest Leaderboard and these have been grouped into HIGH, MED,...

Janaghan Jeyakumar, CFA

Activist Palliser Re-Engages on Keisei Electric (9009) But The Oppty Remains Unconvincing

Since I wrote this piece, Keisei vs OLC is down small. Since I wrote the previous one, it is down more. I think there is room to go, but...

Travis Lundy

Quiddity JPX-Nikkei 400 Rebal 2024: End-Apr 2024 Estimates

In total, there are 45 Potential ADDs and 46 Potential DELs (unique names) presented in the current Quiddity Leaderboard.

Janaghan Jeyakumar, CFA

Last Week in Event SPACE: Pasona/Benefit One, Hang Lung Properties, Hollysys, Azure Minerals

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

Get Your Pasona (2168 JP) Rump For Free

Pasona (2168 JP) said that 10-20% of the total extraordinary gain from the sale of Benefit One Inc (2412 JP) Is to be paid out as a special...

David Blennerhassett

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