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

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When Japanese small-cap stocks listed on JASDAQ, MOTHERS, and the Second Section of the Tokyo Stock Exchange aim at the big leagues and apply for reassignment to the First Section of the Tokyo Stock Exchange and are accepted, it causes significant events to occur.
This triggers inclusion into the TOPIX Index which means passive funds tracking TOPIX need to buy on an inclusion event. This opens up several interesting trading opportunities for investors. 
In this insight, I have provided performance updates for 3 "Live" event stocks which have announced their TSE1 move in  October 2020 and 5 "Post" event stocks that completed their Inclusion Events today and some Pre-event trades involving stocks that are likely to become TSE1-promotion candidates in the near future. 
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When Japanese small-cap stocks listed on JASDAQ, MOTHERS, and the Second Section of the Tokyo Stock Exchange aim at the big leagues and apply for reassignment to the First Section of the Tokyo Stock Exchange and are accepted, it causes significant events to occur.
This triggers inclusion into the TOPIX Index which means passive funds tracking TOPIX need to buy on an inclusion event. This opens up several interesting trading opportunities for investors. 
In this insight, I have provided performance updates for 3 "Live" event stocks which have announced their TSE1 move in  October 2020 and 5 "Post" event stocks that completed their Inclusion Events today and some Pre-event trades involving stocks that are likely to become TSE1-promotion candidates in the near future. 


Event-Driven

Mothers-listed Ed-Tech company <a href="https://www.smartkarma.com/entities/edulab" target="_blank" data-smartkarma-citation="entities:29680:1" rel="noopener">EduLab (4427 JP)</a> announced (<a href="https://ssl4.eir-parts.net/doc/4427/tdnet/1886364/00.pdf" target="_blank" rel="noopener">Japanese-only</a>) last week they had received approval to move to the First or Second Section of the Tokyo Stock Exchange as of 19th October 2020. In conjunction, they also announced an equity offering (<a href="https://ssl4.eir-parts.net/doc/4427/tdnet/1886367/00.pdf" target="_blank" rel="noopener">J-only</a>). The decision as to whether the stock will be permitted to join the First or Second Section could depend on the success of this offering. If the company moves to the First Section, it would trigger inclusion into the TOPIX Index and the Inclusion Event could be expected to be at the close of trading 27th November 2020. Below is a look at the company's chances of qualifying for the First Section and the attractiveness of the potential Inclusion Event if they manage to qualify.

Mothers-listed Ed-Tech company EduLab (4427 JP) announced (Japanese-only) last week they had received approval to move to the First or Second Section of the Tokyo Stock Exchange as of 19th October 2020. In conjunction, they also announced an equity offering (J-only). The decision as to whether the stock will be permitted to join the First or Second Section could depend on the success of this offering. If the company moves to the First Section, it would trigger inclusion into the TOPIX Index and the Inclusion Event could be expected to be at the close of trading 27th November 2020. Below is a look at the company's chances of qualifying for the First Section and the attractiveness of the potential Inclusion Event if they manage to qualify. 

Japan

EduLab, Inc. offers education related services. The Company provides academic ability measurement, ability analysis, test development and implementation, and other services. EduLab serves customers worldwide.

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EduLab (4427 JP)

TOPIX Inclusion Trade Summary: Oct 2020

TOPIX Inclusion Trade summary for October 2020. "Live" events, "Completed" events, and the unwind of the Post-IPO Basket Trade Strategy due to TSE...

Janaghan Jeyakumar, CFA

TOPIX Inclusion (4427 JP): Edulab

EduLab (4427 JP)

Janaghan Jeyakumar, CFA

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