Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kawasaki-kisen-kaisha-ltd" target="_blank" data-smartkarma-citation="entities:3548:1" rel="noopener">Kawasaki Kisen Kaisha (9107 JP)</a> had a shareholder return program in place in May. Earnings forecasts on 3 Nov were slightly disappointing so the stock sold off but...</li>
<li>The large buyback allowed investors to try to game the situation. Some may have, but this morning on the execution, VERY few Real World Float holders sold. </li>
<li>That leaves the stock squeezy going into a buyback to repurchase 20% of the Max Real World Float (including short-created longs). </li>
</ul>



Kawasaki Kisen Kaisha (9107 JP) had a shareholder return program in place in May. Earnings forecasts on 3 Nov were slightly disappointing so the stock sold off but...
The large buyback allowed investors to try to game the situation. Some may have, but this morning on the execution, VERY few Real World Float holders sold. 
That leaves the stock squeezy going into a buyback to repurchase 20% of the Max Real World Float (including short-created longs). 


KLine (9107) Buyback Redux-Squared - Post-Buyback Could Get Squeezy

<ul>
<li>On Thursday, <a href="https://www.smartkarma.com/entities/kawasaki-kisen-kaisha-ltd" target="_blank" data-smartkarma-citation="entities:3548:1" rel="noopener">Kawasaki Kisen Kaisha (9107 JP)</a> announced earnings, lower-than-consensus guidance and a ¥100bn buyback via ToSTNeT-3 this week, and on market if not filled via ToSTNeT-3.</li>
<li>The stock fell 5+%. I wrote I thought it was a buy and that the buyback was "game-able." It rose 10+% from then til now. </li>
<li>That was the fun. Now we get the games. Positioning strategy matters. </li>
</ul>


On Thursday, Kawasaki Kisen Kaisha (9107 JP) announced earnings, lower-than-consensus guidance and a ¥100bn buyback via ToSTNeT-3 this week, and on market if not filled via ToSTNeT-3.
The stock fell 5+%. I wrote I thought it was a buy and that the buyback was "game-able." It rose 10+% from then til now. 
That was the fun. Now we get the games. Positioning strategy matters. 


KLine (Kawasaki Kisen (9107)) - ToSTNeT-3 For All The Marbles

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>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> September rebalance will be done in three parts due to the delisting of <a href="https://www.smartkarma.com/entities/shizuoka-bank-ltd" target="_blank" data-smartkarma-citation="entities:4437:1" rel="noopener">Shizuoka Bank (8355 JP)</a> and the relisting of Shizuoka Financial Group (5831).</li>
<li>
<a href="https://www.smartkarma.com/entities/nidec-corp" target="_blank" data-smartkarma-citation="entities:7245:1" rel="noopener">Nidec Corp (6594 JP)</a>, <a href="https://www.smartkarma.com/entities/smc-corp" target="_blank" data-smartkarma-citation="entities:20866:1" rel="noopener">SMC Corp (6273 JP)</a> and <a href="https://www.smartkarma.com/entities/hoya-corp" target="_blank" data-smartkarma-citation="entities:8990:1" rel="noopener">Hoya Corp (7741 JP)</a> replace <a href="https://www.smartkarma.com/entities/unitika-ltd" target="_blank" data-smartkarma-citation="entities:7669:1" rel="noopener">Unitika Ltd (3103 JP)</a>, <a href="https://www.smartkarma.com/entities/oki-electric-industry-co-ltd" target="_blank" data-smartkarma-citation="entities:2181:1" rel="noopener">Oki Electric Industry (6703 JP)</a> and <a href="https://www.smartkarma.com/entities/maruha-nichiro-corp" target="_blank" data-smartkarma-citation="entities:20640:1" rel="noopener">Maruha Nichiro (1333 JP)</a>. </li>
<li>Passive trackers need to buy over 10 days ADV on the adds and there is a large impact of the funding trade given the add/delete size difference.</li>
</ul>


The Nikkei 225 (NKY INDEX) September rebalance will be done in three parts due to the delisting of Shizuoka Bank (8355 JP) and the relisting of Shizuoka Financial Group (5831).

Nidec Corp (6594 JP), SMC Corp (6273 JP) and Hoya Corp (7741 JP) replace Unitika Ltd (3103 JP), Oki Electric Industry (6703 JP) and Maruha Nichiro (1333 JP). 
Passive trackers need to buy over 10 days ADV on the adds and there is a large impact of the funding trade given the add/delete size difference.


Nikkei 225 Index Rebalance: Mostly on Expected Lines

<ul>
<li>In mid-January, I wrote about <a href="https://www.smartkarma.com/insights/mercari-4385-applying-for-tse-prime-means-topix-inclusion-in-4-5-months" target="_blank" rel="noopener">Mercari's likely TOPIX inclusion 4-5 months later</a>. 4.5mos later, it had been included (<a href="https://www.smartkarma.com/insights/mercari-4385-topix-inclusion-finally-and-it-s-bigger-than-it-looks" target="_blank" data-smartkarma-citation="insights:70912" rel="noopener">Mercari (4385) TOPIX Inclusion, Finally... And It's Bigger Than It Looks</a>) .</li>
<li>The publicly-visible announcement data often does not show TOPIX inclusion parameters. A little sleuthing gets you there. </li>
<li>It's <em>still</em> bigger than it looks, but some large holders have recently been selling.</li>
</ul>


In mid-January, I wrote about Mercari's likely TOPIX inclusion 4-5 months later. 4.5mos later, it had been included (Mercari (4385) TOPIX Inclusion, Finally... And It's Bigger Than It Looks) .
The publicly-visible announcement data often does not show TOPIX inclusion parameters. A little sleuthing gets you there. 
It's still bigger than it looks, but some large holders have recently been selling.


Mercari (4385) - End-July TOPIX Inclusion Update

Quantitative Analysis

<ul>
<li>We look at short interest across Hong Kong, Japan, Korea and Taiwan in April to identify stocks/sectors that have seen the largest changes in each market.</li>
<li>Korea and Taiwan are showing a clear divergence with short notional increasing as the market moves lower, indicative of new shorts being initiated.</li>
<li>
<a href="https://www.smartkarma.com/entities/china-merchants-bank-co-ltd-3388a037-4214-4997-b45d-520518cfdb57" target="_blank" data-smartkarma-citation="entities:10987:1" rel="noopener">China Merchants Bank H (3968 HK)</a> has seen the largest short covering as the stock has tumbled in the last couple of weeks.</li>
</ul>


We look at short interest across Hong Kong, Japan, Korea and Taiwan in April to identify stocks/sectors that have seen the largest changes in each market.
Korea and Taiwan are showing a clear divergence with short notional increasing as the market moves lower, indicative of new shorts being initiated.

China Merchants Bank H (3968 HK) has seen the largest short covering as the stock has tumbled in the last couple of weeks.


Asia Short Interest: Large Moves in April

Japan

Kawasaki Kisen Kaisha, Ltd. operates marine cargo and passenger transportation around the world.  The Company provides ocean liner, bulk carrier, car carrier, unscheduled specialized carrier, and energy transportation services. The Company also offers insurance, warehousing, and land transportation services.  Items transported include automobile, grain, petroleum, coal, iron ore, and wood chip.

Mitsui O.S.K. Lines, Ltd. provides marine transportation, warehousing, and cargo handling services.  The Company operates container ship, specialized carrier, oil tankers, and ferry.  Items transported include coal, iron ore, grain, logs, aluminum, cement, industrial salt, copper ore, wood chips, paper products, chemical products, gasoline and other petroleum products, LPG, and other cargoes.

IINO KAIUN KAISHA, LTD. owns and operates specialized tankers such as oil, chemical, and LPG carriers.  The Company transports crude oil, petroleum gasoline, and various dry consumer and agricultural goods.  Iino Kaiun Kaisha also leases and sells real estate.

NS United Kaiun Kaisha, Ltd. operates specialized carriers and tramps to ship iron ore, steel, coal, crude oil, and gas. The Company is affiliated with Nippon Yusen. The Company also has close ties with Nippon Steel.

Japan Transcity Corporation provides warehousing and transportation services. The Company handles marine cargo mainly around port of Yokkaichi City, and transports a variety of products such as automobiles, coal, and chemicals. Japan Transcity specializes in international intermodal transportation.

NAIGAI TRANS LINE LTD is a marine transportation company. The Company mainly offers international and domestic container marine transportation services. NAIGAI TRANS LINE LTD also operates warehousing and cargo handling services.

Nippon Concept Corporation is mainly engaged in providing ISO tank container transportation service.  The Company also offers container cleaning services, logistic solutions, and maintenance services.

Meiji Shipping Co., Ltd. provides marine transportation services. The Company also provides technical management, marine staffing, supplies Italian kitchen fixtures, and supplies nautical equipment. Meiji, also in involved in real estate and operates hotels and restaurants.

ANA Holdings Inc provides a variety of air transportation-related services. The Company offers scheduled & unscheduled air passenger services and air courier services. ANA sells aircraft parts and provides travel arrangement & reservation services as well.

West Japan Railway Company provides rail transportation services including the shinkansen network (bullet train) in North Kyushu, Kinki, Chugoku, and Hokuriku including Kyoto and Osaka.  The Company also operates ferries in Miyajima, manages real estate, shopping centers, and hotels, and offers leisure-related services such as travel packaging products.

Orient Overseas International Ltd, through its subsidiaries, owns and leases ships, operates terminals, and provides freight forwarding and container transportation services.  The Company also develops and invests in properties, leases equipment, and invests in securities.

MISC Berhad owns ships and operates shipping and related services. Through its subsidiaries, the Company provides trucking, warehousing and forwarding service, containers and prime movers repair, and container haulage. MISC Berhad also has operation in trucking and launch operator.

HMM Co., Ltd. provides marine transportation services.  The Company commands different types of vessels including full container vessels, oil tankers, car carriers, LNG carriers, bulk carriers, and tramps.

Evergreen Marine Corp. (Taiwan) Ltd. transports freight by ships. The Company operates container ships to move freight throughout the world. Evergreen Marine has interests in terminals, airline operations and motor freight transportation, as well as container manufacturing.

COSCO SHIPPING Holdings Co., Ltd offers marine freight transportation services.  The Company offers container shipping, dry bulk shipping, logistics services, freight forwarding, and terminal and container leasing services internationally.  COSCO SHIPPING Holdings Co., Ltd operates container ships and terminals, and manufactures shipping containers.

COSCO SHIPPING Energy Transportation Co., Ltd. offers marine shipping services. The Company provides refined oil transportation, crude oil transportation, and other services. COSCO SHIPPING Energy Transportation also ships iron ores, dry bulks, coal, and other products.

Cosco Shipping Energy Transportation Co. Ltd. (H) (1138 HK)

Cosco Shipping Energy Transportation Co. Ltd. (H)

Kirby Corporation operates a fleet of inland tank barges.  The Company transports industrial chemicals, refined petroleum products, black oil products, and agricultural chemicals.  Kirby also overhauls and services diesel engines employed in marine, power generation, and rail applications.

Matson Inc., is involved in transportation and logistics.  The Company offers provides  multimodal transportation services to the North American market, including domestic and international rail intermodal service, long haul and regional highway brokerage, supply chain services and LTL transportation services, as well as third-party logistics services.

Yang Ming Marine Transport provides transportation services and handles domestic and foreign maritime services on cargos.  The Company also operates warehouse, wharf, tug, barge, and container freight station services as well as repairs, leases, and sells containers and chassis.

Wan Hai Lines Ltd. provides marine transportation and shipping agent services. The Company also purchases, sells, and leases vessels and containers as well as operates container freight stations.

Nippon Yusen Kabushiki Kaisha mainly provides marine transportation services and transportation management solution from international hub ports to both domestic and international ports. The Company operates container transportation, tramp and specialized carriers, and logistics and cruise lines. Nippon Yusen offers scheduled and unscheduled transportation services around the world.

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Nippon Yusen Kk (9101 JP)

KLine (9107) Buyback Redux-Squared - Post-Buyback Could Get Squeezy

The buyback was large, but only Effissimo, and Mizuho, and 2mm shares more sold into it. That leaves ~19mm shares to buy in 16wks. That is 20-35%...

Travis Lundy

KLine (Kawasaki Kisen (9107)) - ToSTNeT-3 For All The Marbles

The KLine (9107) buyback is here. We've seen +11% in a day and a half since the knee-jerk response to results. Now we have a buyback of up to 35...

Travis Lundy

Nikkei 225 Index Rebalance: Mostly on Expected Lines

There are 4 changes to the index that will be executed in three parts - changes were mostly expected. One-way turnover is expected at 2.68% and...

Brian Freitas

Mercari (4385) - End-July TOPIX Inclusion Update

Mercari (4385) will join TOPIX at 28 July close. The data suggests 16/5mm shares to buy, which is only 2x 3mo ADV but would be 18-20% of Real World...

Travis Lundy

Asia Short Interest: Large Moves in April

Short notional in Korea and Taiwan has been increasing as the market has been moving lower. Shorts on China Merchant Bank have been covered in...

Brian Freitas

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