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>The Tokyo Stock Exchange (TSE) calculates Free-Float Weight (FFW) for each listed company and uses this value as a key component of TOPIX Index Calculation.</li>
<li>For companies with "low liquidity" the FFW will be multiplied by a fixed liquidity factor of 0.75 to derive the final FFW used for index calculation.</li>
<li>Every April, the application of this liquidity factor is reviewed by the TSE. In this insight, we take an early look at what could happen in April 2024.</li>
</ul>


The Tokyo Stock Exchange (TSE) calculates Free-Float Weight (FFW) for each listed company and uses this value as a key component of TOPIX Index Calculation.
For companies with "low liquidity" the FFW will be multiplied by a fixed liquidity factor of 0.75 to derive the final FFW used for index calculation.
Every April, the application of this liquidity factor is reviewed by the TSE. In this insight, we take an early look at what could happen in April 2024.


TOPIX "Big April Basket" 2024 Expectations: More High-Conviction Names; Better Trade Ideas

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

<ul>
<li>The TOPIX October Free Float Weight Review details are out. This is the biggest FFW review of the year. This year, it's $11.3bn a side. </li>
<li>As discussed in <a href="https://www.smartkarma.com/insights/japan-post-bank-7182-the-october-topix-ffw-adjustment" target="_blank" data-smartkarma-citation="insights:110290" rel="noopener">Japan Post Bank (7182) - The October TOPIX FFW Adjustment</a>, JPB is the big buy. $2bn/23d of ADV. There is $2bn to buy of trading cos too.</li>
<li>There are lots of large names to trade in both directions. If you have interests to sell the buys and vice versa, it is good to know the flows.</li>
</ul>


The TOPIX October Free Float Weight Review details are out. This is the biggest FFW review of the year. This year, it's $11.3bn a side. 
As discussed in Japan Post Bank (7182) - The October TOPIX FFW Adjustment, JPB is the big buy. $2bn/23d of ADV. There is $2bn to buy of trading cos too.
There are lots of large names to trade in both directions. If you have interests to sell the buys and vice versa, it is good to know the flows.


October 2023 TOPIX Free Float Review - $22.6bn to Trade and JPB (7182) The Biggie

David Blennerhassett

<ul>
<li>Should the nominated directors, to be voted on by <a href="https://www.smartkarma.com/entities/eoflow-co-ltd" target="_blank" data-smartkarma-citation="entities:36100:1" rel="noopener">EOFlow (294090 KS)</a>'s shareholders at the November EGM, include <a href="https://www.smartkarma.com/entities/medtronic-plc" target="_blank" data-smartkarma-citation="entities:14982:1" rel="noopener">Medtronic Plc (MDT US)</a> executives, then game on.</li>
<li>
<a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a> STILL has a Nikkei 225 problem, which means it probably has to underperform Nikkei 225 slightly between now and the Base Date (31 July 2024).</li>
<li>
<a href="https://www.smartkarma.com/entities/jmdc-inc" target="_blank" data-smartkarma-citation="entities:28673:1" rel="noopener">JMDC (4483 JP)</a> has been one of the more annoying partial tenders out there. Even post-facto, it is tough to know what the disposition was. This is extraordinarily vexing.</li>
</ul>


Should the nominated directors, to be voted on by EOFlow (294090 KS)'s shareholders at the November EGM, include Medtronic Plc (MDT US) executives, then game on.

Fast Retailing (9983 JP) STILL has a Nikkei 225 problem, which means it probably has to underperform Nikkei 225 slightly between now and the Base Date (31 July 2024).

JMDC (4483 JP) has been one of the more annoying partial tenders out there. Even post-facto, it is tough to know what the disposition was. This is extraordinarily vexing.


Last Week In Event SPACE: EOFlow, Fast Retailing, JMDC, Origin Energy

<ul>
<li>Quiddity's "Who is Ready" series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.</li>
<li>Since my last insight, <a href="https://www.smartkarma.com/entities/cellsource-co-ltd" target="_blank" data-smartkarma-citation="entities:40144:1" rel="noopener">CellSource (4880 JP)</a> and <a href="https://www.smartkarma.com/entities/kasumigaseki-capital-co-ltd" target="_blank" data-smartkarma-citation="entities:40162:1" rel="noopener">Kasumigaseki Capital (3498 JP)</a> have confirmed they will move to TSE Prime which means they will be included in TOPIX at end-November.</li>
<li>
<a href="https://www.smartkarma.com/entities/fp-partner-inc" target="_blank" data-smartkarma-citation="entities:40040:1" rel="noopener">FP Partner (7388 JP)</a> and <a href="https://www.smartkarma.com/entities/i-ne-co-ltd" target="_blank" data-smartkarma-citation="entities:40117:1" rel="noopener">I-NE (4933 JP)</a> will get included in TOPIX at the end of October.</li>
</ul>


Quiddity's "Who is Ready" series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
Since my last insight, CellSource (4880 JP) and Kasumigaseki Capital (3498 JP) have confirmed they will move to TSE Prime which means they will be included in TOPIX at end-November.

FP Partner (7388 JP) and I-NE (4933 JP) will get included in TOPIX at the end of October.


TOPIX Inclusions: Who Is Ready (Oct 2023)

<ul>
<li>Skincare/Cosmetics company <a href="https://www.smartkarma.com/entities/i-ne-co-ltd" target="_blank" data-smartkarma-citation="entities:40117:1" rel="noopener">I-NE (4933 JP)</a> on 31 August (¥2947) announced it would move to TSE Prime on 19 September, and announced a Secondary Offering by CEO Onishi-san to get there.</li>
<li>There was no greenshoe provided. The stock popped. Then drifted back to ¥3025 and the Offering priced today at ¥2,934/share. </li>
<li>75% went to Asian/European (non-US) offshore investors, and the rest to onshore institutions, which is unusual. But now we look to the TOPIX inclusion.</li>
</ul>


Skincare/Cosmetics company I-NE (4933 JP) on 31 August (¥2947) announced it would move to TSE Prime on 19 September, and announced a Secondary Offering by CEO Onishi-san to get there.
There was no greenshoe provided. The stock popped. Then drifted back to ¥3025 and the Offering priced today at ¥2,934/share. 
75% went to Asian/European (non-US) offshore investors, and the rest to onshore institutions, which is unusual. But now we look to the TOPIX inclusion.


I-Ne (4933) Offering Priced, Now to a TOPIX Inclusion

Japan

I-ne CO.,LTD. operates as a cosmetics company. The Company produces and sells cosmetics, beauty appliances, beauty products, and other products. I-ne provides electronic commerce services.

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I-NE (4933 JP)

TOPIX "Big April Basket" 2024 Expectations: More High-Conviction Names; Better Trade Ideas

The TOPIX 0.75x LF removal results were announced after the close on Friday. There will be 22 LF removals. All 18 names in the High Conviction...

Janaghan Jeyakumar, CFA

October 2023 TOPIX Free Float Review - $22.6bn to Trade and JPB (7182) The Biggie

The TOPIX FFW trade approaches. 4+ trading days left. So far the Top 40 Buys vs Sells are +1+% since I wrote two weeks ago. Shin-Etsu/Ibiden is...

Travis Lundy

Last Week In Event SPACE: EOFlow, Fast Retailing, JMDC, Origin Energy

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

TOPIX Inclusions: Who Is Ready (Oct 2023)

There are currently 67 names that satisfy all 6 key Segment Transfer requirements based on current data. Celsys (3663 JP) continues to be the top...

Janaghan Jeyakumar, CFA

I-Ne (4933) Offering Priced, Now to a TOPIX Inclusion

I-ne is a growth-y skincare CPG co listed since late 2020. An offering solved the tradable share problem. Now the TOPIX inclusion. If the offering...

Travis Lundy

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