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

Event-Driven

<ul>
<li>There are 14 Japanese stocks at risk of being deleted from global passive portfolios in February. The number will be smaller depending on the day of the review period chosen.</li>
<li>Selling from passive trackers will range from US$176m-354m and the impact ranges from 3.1-18.4 days of ADV. Short interest has increased in nearly all stocks over the last 4 weeks.</li>
<li>The forecast deletes have underperformed the <a href="https://www.smartkarma.com/entities/tokyo-stock-exchange-tokyo-price-index-topix" target="_blank" data-smartkarma-citation="entities:22910:1" rel="noopener">TSE Tokyo Price Index TOPIX</a> on average over the last 1-3 months, while there has been marginal outperformance over the last week or two.</li>
</ul>


There are 14 Japanese stocks at risk of being deleted from global passive portfolios in February. The number will be smaller depending on the day of the review period chosen.
Selling from passive trackers will range from US$176m-354m and the impact ranges from 3.1-18.4 days of ADV. Short interest has increased in nearly all stocks over the last 4 weeks.
The forecast deletes have underperformed the TSE Tokyo Price Index TOPIX on average over the last 1-3 months, while there has been marginal outperformance over the last week or two.


Japan: Last Look at Potential Passive Selling in February

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Shinko Electric Industries / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shinko-electric-industries" target="_blank" data-smartkarma-citation="entities:15066:1" rel="noopener">Shinko Electric Industries (6967 JP)</a>’s tender offer from a JIC alliance is at JPY5,920. Today’s update notes that JIC has satisfied the regulatory precondition. </li>
<li>The tender offer is expected to commence in mid-February. The Board will continue to recommend it because it remains attractive. </li>
<li>Deal fatigue (announced in December 2023) and Ibiden's derating will nudge shareholders to accept. At the last close and for an end-of-March payment, the gross/annualised spread was 0.7%/3.9%.</li>
</ul>



Shinko Electric Industries (6967 JP)’s tender offer from a JIC alliance is at JPY5,920. Today’s update notes that JIC has satisfied the regulatory precondition. 
The tender offer is expected to commence in mid-February. The Board will continue to recommend it because it remains attractive. 
Deal fatigue (announced in December 2023) and Ibiden's derating will nudge shareholders to accept. At the last close and for an end-of-March payment, the gross/annualised spread was 0.7%/3.9%.


Shinko Electric (6967 JP): JIC’s Tender Offer on the Home Stretch

<ul>
<li>Currently, 9 stocks could be deleted from global passive portfolios in February. The deletion will lead to liquidity events where trackers will need to sell multiple days of ADV.</li>
<li>There has been a buildup on shorts on few stocks with minimal positioning in the other stocks. That could change once the calendar ticks over to 2025.</li>
<li>
<a href="https://www.smartkarma.com/entities/kokusai-electric-corp" target="_blank" data-smartkarma-citation="entities:40152:1" rel="noopener">Kokusai Electric (6525 JP)</a> is a potential inclusion to 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> in March and this deletion could provide liquidity to enter a position ahead of that announcement.</li>
</ul>


Currently, 9 stocks could be deleted from global passive portfolios in February. The deletion will lead to liquidity events where trackers will need to sell multiple days of ADV.
There has been a buildup on shorts on few stocks with minimal positioning in the other stocks. That could change once the calendar ticks over to 2025.

Kokusai Electric (6525 JP) is a potential inclusion to the Nikkei 225 (NKY INDEX) in March and this deletion could provide liquidity to enter a position ahead of that announcement.


Japan: Potential Passive Selling in February

<ul>
<li>At first glance, the <a href="https://www.smartkarma.com/entities/shinko-electric-industries" target="_blank" rel="noopener">Shinko Electric Industries (6967 JP)</a> and China TCM merger arb has little or no similarities regarding the region, precondition, sector, type of offeror, or offer structure.</li>
<li>The aftermath of <a href="https://www.smartkarma.com/entities/china-traditional-chinese-medicine" target="_blank" data-smartkarma-citation="entities:351:1" rel="noopener">China Traditional Chinese Medicine (570 HK)</a> has resulted in funds resizing well-held merger arb positions, mainly long-dated names with tail event risks. This has increased the Shinko spread. </li>
<li>Shinko’s tail event risk (no SAMR approval) remains low. Timing remains the primary risk, as a delay is possible. At the last close, the gross/annualised spread was 8.9%/29.2%.</li>
</ul>


At first glance, the Shinko Electric Industries (6967 JP) and China TCM merger arb has little or no similarities regarding the region, precondition, sector, type of offeror, or offer structure.
The aftermath of China Traditional Chinese Medicine (570 HK) has resulted in funds resizing well-held merger arb positions, mainly long-dated names with tail event risks. This has increased the Shinko spread. 
Shinko’s tail event risk (no SAMR approval) remains low. Timing remains the primary risk, as a delay is possible. At the last close, the gross/annualised spread was 8.9%/29.2%.


Shinko Electric (6967 JP): A Casualty of the China TCM Deal Break

Equity Long-Short Analyst

Pyari Menon

Thematic (Sector/Industry)

<ul>
<li>This report is almost entirely based on datamined from technical publications related to patents and innovations in the area of Odontology.</li>
<li>The industry will see significant consolidation as mid-sized and smaller players with inspired innovations are be bought out as the industry seeks more cost-efficient distribution channels</li>
<li>Among the listed companies <a href="https://www.smartkarma.com/entities/3-m-co" target="_blank" data-smartkarma-citation="entities:14866:1" rel="noopener">3M Co (MMM US)</a> , <a href="https://www.smartkarma.com/entities/dentsply-international-inc" target="_blank" data-smartkarma-citation="entities:10926:1" rel="noopener">Dentsply International (XRAY US)</a> , <a href="https://www.smartkarma.com/entities/align-technology-inc" target="_blank" data-smartkarma-citation="entities:2817:1" rel="noopener">Align Technology (ALGN US)</a> , <a href="https://www.smartkarma.com/entities/envista-holdings-corp" target="_blank" data-smartkarma-citation="entities:35866:1" rel="noopener">Envista Holdings (NVST US)</a>  &amp; <a href="https://www.smartkarma.com/entities/straumann-holding-ag" target="_blank" data-smartkarma-citation="entities:22493:1" rel="noopener">Straumann Holding (STMN SW)</a> stand out. </li>
</ul>


This report is almost entirely based on datamined from technical publications related to patents and innovations in the area of Odontology.
The industry will see significant consolidation as mid-sized and smaller players with inspired innovations are be bought out as the industry seeks more cost-efficient distribution channels
Among the listed companies 3M Co (MMM US) , Dentsply International (XRAY US) , Align Technology (ALGN US) , Envista Holdings (NVST US)  &amp; Straumann Holding (STMN SW) stand out. 


A Detailed Look Into Innovations in Dentistry

Japan

Mitsui Chemicals, Inc. manufactures and markets a variety of chemical products. The Company's products include ethylene, propylene and other petrochemicals, basic chemicals, synthetic resins, and fine chemicals.  The Company operates worldwide.

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Mitsui Chemicals (4183 JP)

Japan: Last Look at Potential Passive Selling in February

Tomorrow is going to be a huge volume day in Japan as the global index rebalances. Kokusai Electric has bounced as expected and there could be more...

Brian Freitas

Shinko Electric (6967 JP): JIC’s Tender Offer on the Home Stretch

The precondition is satisfied, and the tender offer is from 18 February to 18 March (20 business days). Deal fatigue and the derating of Ibiden...

Arun George

Japan: Potential Passive Selling in February

These 9 stocks continue to remain potential deletes in February along with 2 more now. There has been an increase in shorts as the stocks have, on...

Brian Freitas

Shinko Electric (6967 JP): A Casualty of the China TCM Deal Break

The aftermath of the China TCM deal break has resulted in funds resizing well-held merger arb positions, mainly long-dated names with tail event...

Arun George

A Detailed Look Into Innovations in Dentistry

The report highlights the most innovative well-known & lesser-known dental companies driving advancements in digital dentistry, materials,...

Pyari Menon

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