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.

Equity Capital Markets

<ul>
<li>Since the US$535 million secondary placement announcement, <a href="https://www.smartkarma.com/entities/modec-inc" target="_blank" data-smartkarma-citation="entities:2840:1" rel="noopener">Modec Inc (6269 JP)</a>’s shares are down 15% from the undisturbed price of JPY3,320 per share (14 May).</li>
<li>Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Modec’s shares have followed the pattern of previous large placements.</li>
<li>The offering will likely be priced on 22 May. Investors who have participated in previous large Japanese placements tend to secure positive returns.</li>
</ul>


Since the US$535 million secondary placement announcement, Modec Inc (6269 JP)’s shares are down 15% from the undisturbed price of JPY3,320 per share (14 May).
Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Modec’s shares have followed the pattern of previous large placements.
The offering will likely be priced on 22 May. Investors who have participated in previous large Japanese placements tend to secure positive returns.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/modec-inc" target="_blank" data-smartkarma-citation="entities:2840:1" rel="noopener">Modec Inc (6269 JP)</a> has announced a secondary offering of up to 25.2 million shares (including overallotment). The largest shareholder, <a href="https://www.smartkarma.com/entities/mitsui-e-s-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:2402:1" rel="noopener">Mitsui E&amp;S Holdings (7003 JP)</a>, is the seller.</li>
<li>MODEC's goal with the secondary offering is to reconfigure its shareholder mix to have a diverse base of shareholders who support its long-term strategies and a better tradable share ratio.</li>
<li>Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will likely fall between 22 and 28 May (likely 22 May).</li>
</ul>



Modec Inc (6269 JP) has announced a secondary offering of up to 25.2 million shares (including overallotment). The largest shareholder, Mitsui E&amp;S Holdings (7003 JP), is the seller.
MODEC's goal with the secondary offering is to reconfigure its shareholder mix to have a diverse base of shareholders who support its long-term strategies and a better tradable share ratio.
Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will likely fall between 22 and 28 May (likely 22 May).


MODEC (6296 JP): A US$535 Million Secondary Offering

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>The review period for 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 ends in July. There could be three changes at the rebalance with sector balance in focus for the additions.</li>
<li>Depending on the changes, passive trackers will need to buy between 5-16x ADV (10.1%-24% of real float) on the inclusions and sell between 4-42x ADV on the deletions.</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> will be capped to 10% of the index weight while <a href="https://www.smartkarma.com/entities/tokyo-electron-ltd" target="_blank" data-smartkarma-citation="entities:280:1" rel="noopener">Tokyo Electron (8035 JP)</a> is also close to the 10% cap.</li>
</ul>


The review period for the Nikkei 225 (NKY INDEX) September rebalance ends in July. There could be three changes at the rebalance with sector balance in focus for the additions.
Depending on the changes, passive trackers will need to buy between 5-16x ADV (10.1%-24% of real float) on the inclusions and sell between 4-42x ADV on the deletions.

Fast Retailing (9983 JP) will be capped to 10% of the index weight while Tokyo Electron (8035 JP) is also close to the 10% cap.


Nikkei 225 Index Rebalance Preview (Sep 2024): Ranking, Capping, Funding & Other Changes

Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Equity Bottom-Up

<ul>
<li>The company's management fees now cover the operating costs after many years of losses</li>
<li>Recent fund raising has surpassed expectations for its latest VC fund</li>
<li>The company's steps towards better capital allocation are trending in the right direction</li>
</ul>


The company's management fees now cover the operating costs after many years of losses
Recent fund raising has surpassed expectations for its latest VC fund
The company's steps towards better capital allocation are trending in the right direction


Revisiting Jafco (8595.T) - Company Reaches An Important Milestone

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>The March 2024 rebal is done and dusted. When announced, there were 2 prospective DELETEs for Sep 2024. Now there is only one expected DELETE, <a href="https://www.smartkarma.com/entities/nippon-paper-industries-co-l" target="_blank" data-smartkarma-citation="entities:557:1" rel="noopener">Nippon Paper Industries (3863 JP)</a>. </li>
<li>The one likely inclusion is therefore <a href="https://www.smartkarma.com/entities/ryohin-keikaku-co-ltd" target="_blank" data-smartkarma-citation="entities:2765:1" rel="noopener">Ryohin Keikaku (7453 JP)</a>. But there is more fun afoot with <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> and <a href="https://www.smartkarma.com/entities/tokyo-electron-ltd" target="_blank" data-smartkarma-citation="entities:280:1" rel="noopener">Tokyo Electron (8035 JP)</a>. </li>
<li>The two stocks - of totally different sectors - interact somewhat, both in determining Nikkei 225 direction, and their relative potential selldowns. </li>
</ul>


The March 2024 rebal is done and dusted. When announced, there were 2 prospective DELETEs for Sep 2024. Now there is only one expected DELETE, Nippon Paper Industries (3863 JP). 
The one likely inclusion is therefore Ryohin Keikaku (7453 JP). But there is more fun afoot with Fast Retailing (9983 JP) and Tokyo Electron (8035 JP). 
The two stocks - of totally different sectors - interact somewhat, both in determining Nikkei 225 direction, and their relative potential selldowns. 


Sep24 Nikkei 225 Rebal - Now 1 ADD, 1 DELETE; Fastie+TEL Still Where the Fun Is

Japan

Nomura Research Institute, Ltd. provides information technology, research, consulting, and analyzing for business strategy decision-making.  The Company also provides application software for system operation services.

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Nomura Research Institute (4307 JP)

MODEC (6296 JP): The Current Playbook

The offering will likely be priced on 22 May. Investors who have participated in previous large Japanese placements tend to secure positive returns.

Arun George

MODEC (6296 JP): A US$535 Million Secondary Offering

Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will likely fall between...

Arun George

Nikkei 225 Index Rebalance Preview (Sep 2024): Ranking, Capping, Funding & Other Changes

There could be 3 changes for the NKY in September with sector balance determining the inclusions. Fast Retailing will be capped while Tokyo...

Brian Freitas

Revisiting Jafco (8595.T) - Company Reaches An Important Milestone

Jafco reaches the holy grail of asset management , while its new fund raising is exceeding expectations. Exit multiples for Japan will likely...

Rikki Malik

Sep24 Nikkei 225 Rebal - Now 1 ADD, 1 DELETE; Fastie+TEL Still Where the Fun Is

The Sep 2024 Nikkei 225 review now threatens to be 1 small ADD and 1 small DELETE but two-way flow of US$9bn+. The fun is on Fast Retailing and...

Travis Lundy

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