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

Event-Driven

NTT (Nippon Telegraph & Telephone) / Event-Driven

<ul>
<li>On 7 April, the JPX announced the changes to the Free Float Weights (FFW) for the TOPIX Index. There are some big changes due to the updated FFW methodology.</li>
<li>From April to June, we see a one-way turnover of 2.87% and a one-way trade of ¥2,285bn. Some stocks have opposite way flows in different months.</li>
<li>Stocks with inflows outperformed stocks with outflows from Oct-Dec 2021 before giving up all the gains. These stocks have started to outperform and could continue outperforming over the next quarter.</li>
</ul>


On 7 April, the JPX announced the changes to the Free Float Weights (FFW) for the TOPIX Index. There are some big changes due to the updated FFW methodology.
From April to June, we see a one-way turnover of 2.87% and a one-way trade of ¥2,285bn. Some stocks have opposite way flows in different months.
Stocks with inflows outperformed stocks with outflows from Oct-Dec 2021 before giving up all the gains. These stocks have started to outperform and could continue outperforming over the next quarter.


TOPIX FFW Transition - Big Flows from April to June

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>Global equity indexes have staged impressive rallies from oversold levels, and certain hard-hit areas in Europe (STOXX600 Technology, Industrial Goods &amp; Services, and Chemicals Sectors) display bullish short-term price reversals.</li>
<li>We view this as a potential signal that the lows may have been established for this correction, but we need to see more upside follow-through.</li>
<li>Regardless, we want to stick with Sectors and stocks that have remained technically attractive throughout this pullback, not on areas that are just now spiking from oversold levels within downtrends.</li>
</ul>


Global equity indexes have staged impressive rallies from oversold levels, and certain hard-hit areas in Europe (STOXX600 Technology, Industrial Goods &amp; Services, and Chemicals Sectors) display bullish short-term price reversals.
We view this as a potential signal that the lows may have been established for this correction, but we need to see more upside follow-through.
Regardless, we want to stick with Sectors and stocks that have remained technically attractive throughout this pullback, not on areas that are just now spiking from oversold levels within downtrends.


Value Remains Leadership; Actionable Ideas: Energy, Financials, Industrials, and Materials

<ul>
<li>Commodities (ex. precious metals) and global yields are on the rise as the US dollar (DXY) deteriorates. Additionally, EM equities (EEM-US) display a bullish RS reversal relative to MSCI ACWI. </li>
<li>These are all important risk-on signals for global equities that continue to support our neutral yet constructive outlook. We expect more consolidation and mixed markets ahead.</li>
<li>Two Sectors that stand to benefit most from rising rates include Energy and Financials. We recommend adding exposure to these Sectors as we see a shift in favor of value.</li>
</ul>


Commodities (ex. precious metals) and global yields are on the rise as the US dollar (DXY) deteriorates. Additionally, EM equities (EEM-US) display a bullish RS reversal relative to MSCI ACWI. 
These are all important risk-on signals for global equities that continue to support our neutral yet constructive outlook. We expect more consolidation and mixed markets ahead.
Two Sectors that stand to benefit most from rising rates include Energy and Financials. We recommend adding exposure to these Sectors as we see a shift in favor of value.


Value Sectors Take The Lead On Rising Global Yields; Buying Energy and Financials

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

The <a href="https://www.smartkarma.com/entities/japan-post-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:359:1" rel="noopener">Japan Post Holdings (6178 JP)</a> Offering is likely to price today, the first day of its Pricing Period. 
Two weeks ago I wrote <a href="https://www.smartkarma.com/insights/japan-post-holdings-world-s-largest-cleanup-trade-announced-story-and-index-implications" target="_blank" data-smartkarma-citation="insights:58555" rel="noopener">Japan Post Holdings - World's Largest Cleanup Trade Announced - Story and Index Implications</a> and noted that this was likely to be the last equity offering that Japan Post Holdings would ever do. 
It was cheap, and it was a nice clean setup.
That part hasn't changed. Some other things have, and they merit attention.

The Japan Post Holdings (6178 JP) Offering is likely to price today, the first day of its Pricing Period. 
Two weeks ago I wrote Japan Post Holdings - World's Largest Cleanup Trade Announced - Story and Index Implications and noted that this was likely to be the last equity offering that Japan Post Holdings would ever do. 
It was cheap, and it was a nice clean setup.
That part hasn't changed. Some other things have, and they merit attention. 

Japan Post Holdings Offering - Buy Weakness, Then Buy More

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

Japan Post Holdings / Equity Capital Markets

Japan Post Holdings’ listed subsidiary, Japan Post Insurance has suffered from a scandal involving improper sales practices and this has suppressed its multiple noticeably despite strong EPS growth. As sales activities start to normalise we believe the market is severely underestimating how small an improvement would be required here to drive very large increases in earnings.

Japan Post Holdings’ listed subsidiary, Japan Post Insurance has suffered from a scandal involving improper sales practices and this has suppressed its multiple noticeably despite strong EPS growth. As sales activities start to normalise we believe the market is severely underestimating how small an improvement would be required here to drive very large increases in earnings.

Japan Post – Insurance Business Is Sandbagging Guidance

Japan

The Dai-ichi Life Insurance Company Ltd. underwrites and sells life, health and annuity insurance to groups and individuals. The Company offers a wide variety of insurance products to suit different needs, ranging from children's school tuition to emergency funds for the elderly.

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Dai Ichi Life Insurance (8750 JP)

TOPIX FFW Transition - Big Flows from April to June

Changes to the Topix FFW methodology will result in a turnover of 2.87% & trade of ¥2,285bn from April to June. There is a lot to trade on some...

Brian Freitas

Value Remains Leadership; Actionable Ideas: Energy, Financials, Industrials, and Materials

We are sticking with Sectors and stocks that have remained technically sound throughout this correction, not on areas that are just now spiking...

Vermilion Research

Value Sectors Take The Lead On Rising Global Yields; Buying Energy and Financials

Two Sectors that stand to benefit most from rising rates include Energy and Financials. We recommend adding exposure to these Sectors as we see a...

Vermilion Research

Japan Post Holdings Offering - Buy Weakness, Then Buy More

JPH (6178 JP) will price today. At 7x PER and 5.7% div yield, the Offering sells itself, but better, there is 15% of ADV to buy back every day for...

Travis Lundy

Japan Post – Insurance Business Is Sandbagging Guidance

As Japan Post Insurance's sales activities start to normalise we believe the market is underestimating how small an improvement would be required...

Mio Kato

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