Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The Nikkei 225 rebalance will likely be announced this week. I continue to be slightly off-kilter, expecting Nidec, SMC, and Oriental Land to replace Unitika, Oki Electric, and Toho Zinc.</li>
<li>Others would expect Hoya to replace Maruha Nichiro instead of Oriental Land replacing Toho Zinc, but I think it Nikkei Sector balance may matter. It could go either way.</li>
<li>Tactically speaking, cumulative volumes and Real World Float tell you how you might trade this. </li>
</ul>


The Nikkei 225 rebalance will likely be announced this week. I continue to be slightly off-kilter, expecting Nidec, SMC, and Oriental Land to replace Unitika, Oki Electric, and Toho Zinc.
Others would expect Hoya to replace Maruha Nichiro instead of Oriental Land replacing Toho Zinc, but I think it Nikkei Sector balance may matter. It could go either way.
Tactically speaking, cumulative volumes and Real World Float tell you how you might trade this. 


<ul>
<li>The data is largely unchanged since the <a href="https://www.smartkarma.com/insights/nikkei-225-sep-annual-review-predictions-3-in-3-out" target="_blank" data-smartkarma-citation="insights:73209" rel="noopener">Nikkei 225 Sep Annual Review Predictions - 3 In, 3 Out</a> set of predictions published 15 days ago.</li>
<li>The consultation results are out. They are as expected too. This has the hallmarks of a VERY well-signalled trade. But it's a biggie. The funding trade alone is ¥600bn.</li>
<li>Because of the data, market conditions, and the variability of choice at the edges, I believe that warrants particular strategy.</li>
</ul>


The data is largely unchanged since the Nikkei 225 Sep Annual Review Predictions - 3 In, 3 Out set of predictions published 15 days ago.
The consultation results are out. They are as expected too. This has the hallmarks of a VERY well-signalled trade. But it's a biggie. The funding trade alone is ¥600bn.
Because of the data, market conditions, and the variability of choice at the edges, I believe that warrants particular strategy.


Nikkei 225 Sep22 Annual Review; Data Final, Predictions Unch'd; Strategy Involved

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

<ul>
<li>With the review period for the September rebalance of the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> complete, we take a look at the potential inclusions and exclusions for the index.</li>
<li>The conclusions of the market consultation have been announced and that will mean we switch to a semi-annual rebalance. So we take a look at potential changes in March 2023.</li>
<li>The announcement of the changes for the next rebalance should be made in the first week of September and will be implemented at the close on 30 September.</li>
</ul>


With the review period for the September rebalance of the Nikkei 225 (NKY INDEX) complete, we take a look at the potential inclusions and exclusions for the index.
The conclusions of the market consultation have been announced and that will mean we switch to a semi-annual rebalance. So we take a look at potential changes in March 2023.
The announcement of the changes for the next rebalance should be made in the first week of September and will be implemented at the close on 30 September.


Nikkei 225 Index Rebalance Preview: Consultation Conclusions & Potential Changes in Sep & March

<ul>
<li>Yesterday I published <a href="https://www.smartkarma.com/insights/nikkei-225-sep-annual-review-predictions-3-in-3-out" target="_blank" data-smartkarma-citation="insights:73209" rel="noopener">Nikkei 225 Sep Annual Review Predictions - 3 In, 3 Out</a>. Assuming correct, and we move the last 6mos of data 6mos forward, March23 Rebal is below.</li>
<li>This too is 3 in, 3 out. But it is complicated. "Required" changes would move the sector balance further out of whack. </li>
<li>And while some of the trades are "interesting", the rebal is smaller and the bigger question is <em><strong>"What comes after that?"</strong></em>
</li>
</ul>


Yesterday I published Nikkei 225 Sep Annual Review Predictions - 3 In, 3 Out. Assuming correct, and we move the last 6mos of data 6mos forward, March23 Rebal is below.
This too is 3 in, 3 out. But it is complicated. "Required" changes would move the sector balance further out of whack. 
And while some of the trades are "interesting", the rebal is smaller and the bigger question is "What comes after that?"



Nikkei 225 March 2023 Rebal On The Follow - Predictions (3 In, 3 Out) & Problems

<ul>
<li>The Nikkei 225 Annual Review is in September based on end-July data. Jumping the gun, I propose 3 additions and 3 deletions with granular data and details offered per sector.</li>
<li>I see ¥600bn to buy and a funding trade of 99% of that. There are 15+ names with more than 1 day of ADV to sell (funding only).</li>
<li>The impact on Real World Float is non-negligible. One name in particular is deserving of attention. </li>
</ul>


The Nikkei 225 Annual Review is in September based on end-July data. Jumping the gun, I propose 3 additions and 3 deletions with granular data and details offered per sector.
I see ¥600bn to buy and a funding trade of 99% of that. There are 15+ names with more than 1 day of ADV to sell (funding only).
The impact on Real World Float is non-negligible. One name in particular is deserving of attention. 


Nikkei 225 Sep Annual Review Predictions - 3 In, 3 Out

Japan

ARIAKE JAPAN Co., Ltd. produces natural seasonings and flavorings from meat products.  The Company sells the products to major food makers such as Ajinomoto Co., Ltd. and Myojo Foods Co., Ltd.  Ariake also has a plant in the United States.

The Nisshin Oillio Group, Ltd. produces cooking oil products such as vegetable oil, salad dressing oil, tempura oil, margarine, and soybean oil.  The Company also has its own purchasing system and manufacturing technology in fine chemicals for pharmaceuticals and cosmetics.

SAKATA SEED CORPORATION is a wholesaler of seeds, seedlings, bulbs for flowers, vegetables, and fruits.  The Company also wholesales gardening and landscaping supply and equipment.  Sakata Seed conducts research and development to improve seeds and seedlings.

MEGMILK SNOW BRAND Co., Ltd.  was formed through the merger of Snow Brand Milk Products and Nippon Milk Community Co.  The Company will manage the operations of group companies involved in the manufacture and sales of milk and dairy products.

Nippon Flour Mills Co., Ltd. produces and sells flour.  The Company also produces a wide variety of food products in the health, processed, and frozen foods product categories.  Nippon Flour Mills is a member of the Mitsui group.

Prima Meat Packers, Ltd. processes meat products.  The Company, affiliated with Itochu Corp, produces vacuum-packed food products including hamburgers and meat balls.

Morinaga & Co., Ltd. produces confectionery products, canned soft drinks, and ice cream.  The Company also produces health foods and pharmaceutical products, and manages restaurant and real estate businesses.

Mitsui Sugar Co., Ltd. produces and sells sugar and related processed products including sweetener and syrup.  The Company produces its products for commercial use and home use.

S FOODS INC. manufactures and retails processed meat products, sauce, and seasonings for household consumption.  The Company also sells its products for retail stores and restaurants.

Showa Sangyo Co., Ltd. produces and sells flour for breads, noodles, and processed foods.  The Company also makes cooking oils from soy beans, sesames, and other vegetables, confectionery products such as pancake mixes, spaghetti sauces, macaronis, and other prepared foods.

Visionox Technology Inc. manufactures electronic components. The Company researches, develops, produces, and sells organic light emitting displays. Visionox Technology markets its products domestically and overseas.

FGV Holdings Bhd is an agricultural and agri-commodities company. The Company owns and operates an oil palm plantation producing oil palm and rubber plantation products, soybean and canola products, oleochemial products and sugar products.

Hunan New Wellful Co., Ltd. operates pig farms and trades pigs. The Company exports pigs to Hong Kong and Macau as well as sells them domestically.

Shree Renuka Sugars Limited is an integrated manufacturing company with a focus on sugar, distillery products and ethanol. The Company also generates power which is used for captive consumption besides being sold externally.

Del Monte Pacific Limited produces and markets packaged vegetable and fruit, beverage and culinary products. The Group has the exclusive right to use the Del Monte brand for packaged products in the USA, South America, Philippines, the Indian subcontinent and Myanmar, and the S&W brand for both packaged and fresh products globally except Australia and New Zealand.

Triveni Engineering & Industries Limited conducts operations in sugar manufacturing and engineered-to-order mechanical equipment.

Triveni Engineering & Industries (TRE IN)

China Foods Limited, through its subsidiaries, operates food processing businesses.  The Company processes and refines edible oil and fats, produces confectionery products, wine and beverage as well as flour including wheat and other grain products.  In addition, China Foods Limited trades food products.

Ottogi Corporation manufactures food seasonings and instant food, such as mayonnaise, ketchup, salad dressing, sesame and cooking oils, and instant curry. The Company also produces frozen salads, fruit preservatives, instant noodles, and canned tuna.

Shandong Denghai Seeds Co., Ltd. produces and sells crop seeds such as corn seeds and vegetable seeds. The Company also produces flowers and plants.

Jiangsu Hengshun Vinegar Industry Co., Ltd. manufactures and markets vinegar, preserved vegetables, soy sauce, and other seasoning products. The Company also produces optical electronic products.

Jiangsu Hengshun Vinegar Ind Co, Ltd. (600305 CH)

Maruha Nichiro Corporation operates as a fisheries company. The Company specializes in marine products aquaculture, import and export, processing, and sales businesses.

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Maruha Nichiro (1333 JP)

Nikkei 225 Sep 2022 Review Update

The Sep 2022 Nikkei 225 review should be announced later this week. It will result in 9-14 days of ADV to buy of large caps, to be done in 13-15...

Travis Lundy

Nikkei 225 Sep22 Annual Review; Data Final, Predictions Unch'd; Strategy Involved

The Nikkei 225 Consultation Results were published last Wednesday. The data cutoff was last Friday. It's all pretty well-signalled but there are...

Travis Lundy

Nikkei 225 Index Rebalance Preview: Consultation Conclusions & Potential Changes in Sep & March

The market consultation conclusion were confirmed last week. We expect 3 changes to the index in September and another 3 in March. The adds/deletes...

Brian Freitas

Nikkei 225 March 2023 Rebal On The Follow - Predictions (3 In, 3 Out) & Problems

If we assume the Sep-22 Nikkei 225 Rebal predictions, then we look to Mar-23. 3 more in and out. Then it starts getting weird as Auto Inclusions...

Travis Lundy

Nikkei 225 Sep Annual Review Predictions - 3 In, 3 Out

The September Nikkei 225 Rebal announcement is ~ 6 weeks away. Assuming the current plans go through, I see three adds, three deletes. The adds are...

Travis Lundy

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