Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Event-Driven

After the close today, the Nikkei newspaper revealed the results of the annual review of the various 'traditional' Nikkei indices/averages, including for the Nikkei 225 Average.The results are published&nbsp;<a href="http://indexes.nikkei.co.jp/en/nkave/archives/news/20150904E_1.pdf" target="_blank">here</a>&nbsp;on the Nikkei website.In the Nikkei 225, the additions are DeNA (2432 JP) and Haseko Corporation (1808 JP). The deletions are Heiwa Real Estate (8803 JP) and Nitto Boseki (3110 JP).How much impact Nikkei inclusions and exclusions have is often difficult to know because the&nbsp;Nikkei 225 Average is a price-weighted index, not market-cap or float-cap-weighted.Here I make a quick stab at the numbers. The short and sweet is that based on outstanding ETFs and open-ended mutual funds in Japan (there is almost no pension money in Nikkei 225 so little money in non-listed funds), these funds should hold 17,651 Nikkei baskets worth of stock (or 17.651mm shares of each 50-yen par value stock). I expect the cash&amp;carry position is north of 4 trillion yen.&nbsp;&nbsp;The impact on the EXclusions should be bigger than for the INclusions in this situation but in the grand scheme of things, it is not a huge trade. Probably something like US$180mm to buy on the two inclusion names and it likely will end up being &lt;US$150mm to sell on the close for the two deletion names.More for subscribers&nbsp;below the fold...

After the close today, the Nikkei newspaper revealed the results of the annual review of the various 'traditional' Nikkei indices/averages, including for the Nikkei 225 Average.The results are published&nbsp;here&nbsp;on the Nikkei website.In the Nikkei 225, the additions are DeNA (2432 JP) and Haseko Corporation (1808 JP). The deletions are Heiwa Real Estate (8803 JP) and Nitto Boseki (3110 JP).How much impact Nikkei inclusions and exclusions have is often difficult to know because the&nbsp;Nikkei 225 Average is a price-weighted index, not market-cap or float-cap-weighted.Here I make a quick stab at the numbers. The short and sweet is that based on outstanding ETFs and open-ended mutual funds in Japan (there is almost no pension money in Nikkei 225 so little money in non-listed funds), these funds should hold 17,651 Nikkei baskets worth of stock (or 17.651mm shares of each 50-yen par value stock). I expect the cash&amp;carry position is north of 4 trillion yen.&nbsp;&nbsp;The impact on the EXclusions should be bigger than for the INclusions in this situation but in the grand scheme of things, it is not a huge trade. Probably something like US$180mm to buy on the two inclusion names and it likely will end up being &lt;US$150mm to sell on the close for the two deletion names.More for subscribers&nbsp;below the fold...

Japan

HEIWA REAL ESTATE CO., LTD. develops, constructs, sells, and leases real estate properties.  The Company also provides brokerage services on residential and commercial buildings as well as maintenance services.  Heiwa Real Estate provides consulting services on real estate and develops and operates resort places and facilities.

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Heiwa Real Estate (8803 JP)

2015 Annual Nikkei 225 Rebalance

After the close today, the Nikkei newspaper revealed the results of the annual review of the various 'traditional' Nikkei indices/averages,...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)