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

With the Section Transfer Requirements to move to TSE1 becoming more stringent, some small-cap candidates have been rushing to enter TSE1 so that they can avoid having to face the new regulations under which they may struggle to qualify. This trend has resulted in a "flurry" of TOPIX Inclusion Trades in the month of December 2020 as <a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a> predicted in <a href="https://www.smartkarma.com/insights/the-tse-s-listing-criteria-revisions-part-i" target="_blank" data-smartkarma-citation="insights:43150" rel="noopener">The TSE's Listing Criteria Revisions - Part I</a>.
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For index inclusion and event traders taking advantage of a large number of interesting trades, the number will suddenly go waaaay down. This means <a href="https://www.smartkarma.com/profiles/janaghan-jeyakumar-cfa" target="_blank" data-smartkarma-citation="accounts:3173" rel="noopener">Janaghan Jeyakumar, CFA</a> likely has a flurry of interesting trade ideas to read about in the next few months, but after about March next year, things will drop off in a hurry.
</blockquote>
In this insight, I have provided performance updates for 11 "Live" event stocks which are expected to have Inclusion Events at the end of January 2021 and 6 "Post" event stocks that completed their Inclusion Events at the end of November 2020 and December 2020. Furthermore, I have also highlighted some interesting Pre-event situations involving stocks that are likely to become TSE1-promotion candidates in the near future.

With the Section Transfer Requirements to move to TSE1 becoming more stringent, some small-cap candidates have been rushing to enter TSE1 so that they can avoid having to face the new regulations under which they may struggle to qualify. This trend has resulted in a "flurry" of TOPIX Inclusion Trades in the month of December 2020 as Travis Lundy predicted in The TSE's Listing Criteria Revisions - Part I.

For index inclusion and event traders taking advantage of a large number of interesting trades, the number will suddenly go waaaay down. This means Janaghan Jeyakumar, CFA likely has a flurry of interesting trade ideas to read about in the next few months, but after about March next year, things will drop off in a hurry.

In this insight, I have provided performance updates for 11 "Live" event stocks which are expected to have Inclusion Events at the end of January 2021 and 6 "Post" event stocks that completed their Inclusion Events at the end of November 2020 and December 2020. Furthermore, I have also highlighted some interesting Pre-event situations involving stocks that are likely to become TSE1-promotion candidates in the near future. 

In July 2020, the Tokyo Stock Exchange issued Revisions to Listing Rules to Enhance Functions for Raising Funds through the Capital Market as discussed by <a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a> in <a href="https://www.smartkarma.com/insights/the-tse-s-listing-criteria-revisions-part-i" target="_blank" data-smartkarma-citation="insights:43150" rel="noopener">The TSE's Listing Criteria Revisions - Part I</a>. Considering these changes, in <a href="https://www.smartkarma.com/insights/topix-inclusion-trade-summary-sep-2020" target="_blank" data-smartkarma-citation="insights:43700" rel="noopener">TOPIX Inclusion Trade Summary: Sep 2020</a>, I picked four names from Quiddity's TOPIX Inclusions Pre-event Watchlist which could potentially try to apply before 1st November 2020 to avoid having to face the new (and more stringent) section transfer requirements. 
A couple of weeks ago, on 18th December 2020,  <a href="https://www.smartkarma.com/entities/giftee-inc" target="_blank" data-smartkarma-citation="entities:28280:1" rel="noopener">giftee Inc (4449 JP)</a>, which was one of these four names, announced its TSE1 move and <a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a> covered this situation in <a href="https://www.smartkarma.com/insights/topix-inclusion-giftee-4449-bigger-deal-smaller-impact-expensive" target="_blank" data-smartkarma-citation="insights:46488" rel="noopener">TOPIX Inclusion : Giftee (4449) - Bigger Deal, Smaller Impact, Expensive.</a> 
Last week, after the close on 22nd December 2020, another name from this list, <a href="https://www.smartkarma.com/entities/odk-solutions-co-ltd" target="_blank" data-smartkarma-citation="entities:7143:1" rel="noopener">Odk Solutions (3839 JP)</a> announced they had received approval to move from the Second Section to the First Section of the Tokyo Stock Exchange as of 29th December 2020. 
TSE1 reassignment triggers inclusion into the TOPIX Index and the Inclusion Event can be expected to be at the close of trading 28th January 2021. 
ODK Solutions provides business process outsourcing services in Japan. The company also offers trust calculation services, software development services, network associated systems, and open systems, computer packages, and Office Automation machines. 
In this insight, we take a look at the Index Inclusion Parameters and the Fundamentals of the company to evaluate the upside potential of the TOPIX Inclusion Event.

In July 2020, the Tokyo Stock Exchange issued Revisions to Listing Rules to Enhance Functions for Raising Funds through the Capital Market as discussed by Travis Lundy in The TSE's Listing Criteria Revisions - Part I. Considering these changes, in TOPIX Inclusion Trade Summary: Sep 2020, I picked four names from Quiddity's TOPIX Inclusions Pre-event Watchlist which could potentially try to apply before 1st November 2020 to avoid having to face the new (and more stringent) section transfer requirements. 
A couple of weeks ago, on 18th December 2020,  giftee Inc (4449 JP), which was one of these four names, announced its TSE1 move and Travis Lundy covered this situation in TOPIX Inclusion : Giftee (4449) - Bigger Deal, Smaller Impact, Expensive. 
Last week, after the close on 22nd December 2020, another name from this list, Odk Solutions (3839 JP) announced they had received approval to move from the Second Section to the First Section of the Tokyo Stock Exchange as of 29th December 2020. 
TSE1 reassignment triggers inclusion into the TOPIX Index and the Inclusion Event can be expected to be at the close of trading 28th January 2021. 
ODK Solutions provides business process outsourcing services in Japan. The company also offers trust calculation services, software development services, network associated systems, and open systems, computer packages, and Office Automation machines. 
In this insight, we take a look at the Index Inclusion Parameters and the Fundamentals of the company to evaluate the upside potential of the TOPIX Inclusion Event. 

TOPIX Inclusion: ODK Solutions (3839 JP): High Impact BLUE Name

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

This is yet another name on the list of stocks to own that <a href="https://www.smartkarma.com/profiles/janaghan-jeyakumar-cfa" target="_blank" data-smartkarma-citation="accounts:3173" rel="noopener">Janaghan Jeyakumar, CFA</a> has put together over the past several months.In June 2020 he wrote <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> which pointed out one of the methodologies, and in July 2020 he wrote <a href="https://www.smartkarma.com/insights/topix-inclusion-pre-events-who-is-ready" target="_blank" rel="noopener">TOPIX Inclusion Pre-Events: Who Is Ready?</a> which described a couple of other methodologies, at which point giftee Inc (4449 JP) went onto the Watchlist. That was upgraded to an explicit buy recommendation for giftee in September in <a href="https://www.smartkarma.com/insights/topix-inclusion-trade-summary-sep-2020" target="_blank" data-smartkarma-citation="insights:43700" rel="noopener">TOPIX Inclusion Trade Summary: Sep 2020</a> and in subsequent summaries. He has had a good hit rate on this process, where the newest version is in <a href="https://www.smartkarma.com/insights/topix-inclusions-new-regulations-who-is-ready-2-0" target="_blank" data-smartkarma-citation="insights:45783" rel="noopener">TOPIX Inclusions:  New Regulations! Who Is READY? 2.0</a>.Friday after the close, <a href="https://www.smartkarma.com/entities/giftee-inc" target="_blank" data-smartkarma-citation="entities:28280:1" rel="noopener">giftee Inc (4449 JP)</a> made an <a href="https://contents.xj-storage.jp/xcontents/AS04721/b47ef4c7/5001/4467/8b5c/3de4f8289cfa/20201218153835141s.pdf" target="_blank" rel="noopener">announcement</a> to the effect that the TSE had approved its application to move to TSE First Section, and it will move to TSE1 on 25 December 2020. TSE1 reassignment triggers inclusion into the TOPIX Index and the Inclusion Event can be expected to be at the close of trading 28th January 2021.In this insight, we take a look at the Index Inclusion Parameters and the offering to evaluate the upside potential of the TOPIX Inclusion Event. It is, for those of you who follow the Quiddity TOPIX Inclusion Framework, a GREEN, but it is really just across the border from BLUE which is still OK.

This is yet another name on the list of stocks to own that Janaghan Jeyakumar, CFA has put together over the past several months.In June 2020 he wrote TOPIX Inclusion Pre-Events: Recent "Tachiaigai Bunbai" Round-Up which pointed out one of the methodologies, and in July 2020 he wrote TOPIX Inclusion Pre-Events: Who Is Ready? which described a couple of other methodologies, at which point giftee Inc (4449 JP) went onto the Watchlist. That was upgraded to an explicit buy recommendation for giftee in September in TOPIX Inclusion Trade Summary: Sep 2020 and in subsequent summaries. He has had a good hit rate on this process, where the newest version is in TOPIX Inclusions:  New Regulations! Who Is READY? 2.0.Friday after the close, giftee Inc (4449 JP) made an announcement to the effect that the TSE had approved its application to move to TSE First Section, and it will move to TSE1 on 25 December 2020. TSE1 reassignment triggers inclusion into the TOPIX Index and the Inclusion Event can be expected to be at the close of trading 28th January 2021.In this insight, we take a look at the Index Inclusion Parameters and the offering to evaluate the upside potential of the TOPIX Inclusion Event. It is, for those of you who follow the Quiddity TOPIX Inclusion Framework, a GREEN, but it is really just across the border from BLUE which is still OK. 

TOPIX Inclusion : Giftee (4449) - Bigger Deal, Smaller Impact, Expensive.

Japan Specialist

Mark Chadwick

Equity Bottom-Up

The central premise of Giftee could hardly be more straightforward. It’s all about appealing to our innate desire to receive presents or win prizes. That could be a simple personal thank you gift in recognition of a job well done or a marking campaign by a global brand. Giftee’s platform enables both individuals and consumers to distribute gifts and rewards digitally.     Around two-thirds of Giftee’s sales are to business users; companies looking to boost sales from marketing activities. Incentive marketing is one of many strings to a marketer’s bow. Its principle is simple; take the action we want, and we will give you something in return. The action and reward depends on the kind of business: it may be buying a product, signing up to an email list, completing a survey, or downloading an eBook.  If I were not such a Scrooge, I could even send you a digital latte for hitting the like button below this insight....bah humbug. Giftee for business has been a high growth opportunity for the company since launch. It has slowed this year as businesses have curtailed their advertising budgets due to Covid-19. The stock could be a good way to get exposure to a resumption of corporate advertising.  <section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/177/380/original/c9HTp--giftee-for-business-sales-.png?1607478084" class="editor-image img-responsive" data-smartkarma-image-id="177380"></figure></section>

The central premise of Giftee could hardly be more straightforward. It’s all about appealing to our innate desire to receive presents or win prizes. That could be a simple personal thank you gift in recognition of a job well done or a marking campaign by a global brand. Giftee’s platform enables both individuals and consumers to distribute gifts and rewards digitally.     Around two-thirds of Giftee’s sales are to business users; companies looking to boost sales from marketing activities. Incentive marketing is one of many strings to a marketer’s bow. Its principle is simple; take the action we want, and we will give you something in return. The action and reward depends on the kind of business: it may be buying a product, signing up to an email list, completing a survey, or downloading an eBook.  If I were not such a Scrooge, I could even send you a digital latte for hitting the like button below this insight....bah humbug. Giftee for business has been a high growth opportunity for the company since launch. It has slowed this year as businesses have curtailed their advertising budgets due to Covid-19. The stock could be a good way to get exposure to a resumption of corporate advertising.  

Small Cap Growth: Giftee (4449) - All Wrapped Up

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. 
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In this insight, I have provided performance updates for 7 "Live" event stocks which are expected to have Inclusion Events at the end of December 2020 or January 2021 and 8 "Post" event stocks that completed their Inclusion Events at the end of October 2020 and November 2020. Furthermore, I have also highlighted some interesting Pre-event situations involving stocks that are likely to become TSE1-promotion candidates in the near future. 
</div>


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 7 "Live" event stocks which are expected to have Inclusion Events at the end of December 2020 or January 2021 and 8 "Post" event stocks that completed their Inclusion Events at the end of October 2020 and November 2020. Furthermore, I have also highlighted some interesting Pre-event situations involving stocks that are likely to become TSE1-promotion candidates in the near future. 


Japan

giftee, Inc. provides electronic gift services. The Company gives electronic gifts for free from online with small thanks. giftee also provides gift tickets from shops to customers.

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giftee Inc (4449 JP)

TOPIX Inclusion Trade Summary: Dec 2020

TOPIX Inclusions for the month of December - past, current, and looking ahead to January. There is still a flurry of pre-Nov1 application names...

Janaghan Jeyakumar, CFA

TOPIX Inclusion: ODK Solutions (3839 JP): High Impact BLUE Name

ODK Solutions is being promoted to TSE1. The inclusion will be at the end of January. Top line growth is strong and the stock is relatively...

Janaghan Jeyakumar, CFA

TOPIX Inclusion : Giftee (4449) - Bigger Deal, Smaller Impact, Expensive.

giftee (4449) was IPOed expensively and has grown more expensive into its TSE1 inclusion announcement. It's here, as Janaghan Jeyakumar predicted....

Travis Lundy

Small Cap Growth: Giftee (4449) - All Wrapped Up

Giftee is a unique way for investors to gain exposure to the digitalization of marketing and promotional spend in Japan. The company owns a...

Mark Chadwick

TOPIX Inclusion Trade Summary: Nov 2020

November review of pre-events, live events, and post-events in the TOPIX Inclusion trade universe. There are a dozen pre-event recommendations...

Janaghan Jeyakumar, CFA

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