Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Early predictions for the March 2023 Nikkei rebalance (TBA early Feb) are little changed. One way turnover would still be about 1.4%. I see 3 ADDs and 3 DELETEs.</li>
<li>The 3 ADDs should be <a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661)</a>, <a href="https://www.smartkarma.com/entities/renesas-electronics-corp" target="_blank" data-smartkarma-citation="entities:15933:1" rel="noopener">Renesas Electronics (6723)</a>, and <a href="https://www.smartkarma.com/entities/japan-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1184:1" rel="noopener">Japan Airlines (9201)</a>.  The 3 DELETES <a href="https://www.smartkarma.com/entities/toho-zinc-co-ltd" target="_blank" data-smartkarma-citation="entities:2796:1" rel="noopener">Toho Zinc (5707)</a>, <a href="https://www.smartkarma.com/entities/toyobo-co-ltd" target="_blank" data-smartkarma-citation="entities:6187:1" rel="noopener">Toyobo (3101)</a>, and <a href="https://www.smartkarma.com/entities/nippon-light-metal-holdings" target="_blank" data-smartkarma-citation="entities:1485:1" rel="noopener">Nippon Light Metal (5703)</a>. </li>
<li>Oriental Land is the one to watch in March. The Sep 2023 rebalance and subsequent ones are smaller in size but more interesting in impact.</li>
</ul>


Early predictions for the March 2023 Nikkei rebalance (TBA early Feb) are little changed. One way turnover would still be about 1.4%. I see 3 ADDs and 3 DELETEs.
The 3 ADDs should be Oriental Land (4661), Renesas Electronics (6723), and Japan Airlines (9201).  The 3 DELETES Toho Zinc (5707), Toyobo (3101), and Nippon Light Metal (5703). 
Oriental Land is the one to watch in March. The Sep 2023 rebalance and subsequent ones are smaller in size but more interesting in impact.


Nikkei 225 March 2023 Review Quiddity Leaderboard (Nov 2022)

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>In 2020 and 2021 we had nine conviction calls, four of which returned over 50% within just over a year.</li>
<li>Three more returned close to 40%, one returned 15% and just one was an abject failure returning -39%. </li>
<li>On average, alpha generation was 24.3% and our 2022 names are off to a good start putting up 14.7% in alpha in just over a month and a half.</li>
</ul>


In 2020 and 2021 we had nine conviction calls, four of which returned over 50% within just over a year.
Three more returned close to 40%, one returned 15% and just one was an abject failure returning -39%. 
On average, alpha generation was 24.3% and our 2022 names are off to a good start putting up 14.7% in alpha in just over a month and a half.


A Belated Look Back at Our 2020 and 2021 Conviction Calls and a Look Ahead to 2022

Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>Nidec may be back in focus on a lifeline for SMCI and heating issues for NVDA.</li>
<li>Tesla and power-semis are both up on the self-driving U-turn.</li>
<li>No bid for JP SPE's recently, although Lasertec may still have further to fall.</li>
</ul>


Nidec may be back in focus on a lifeline for SMCI and heating issues for NVDA.
Tesla and power-semis are both up on the self-driving U-turn.
No bid for JP SPE's recently, although Lasertec may still have further to fall.


Japan Morning Connection: JP Set for a More Upbeat Start After Tech Rebound

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 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 Index</a> March rebalance ends in January. There could be one outright change and one or two others driven by sector balance.</li>
<li>Depending on the changes, passive trackers will need to buy between 8.2-20.5x ADV (8.75%-24.5% of real float) and sell between 9-38x 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</a>'s PAF could see a double reduction to keep the stock weight capped at 10%. There will be huge passive selling leading to funding inflows for other index constituents.</li>
</ul>


The review period for the Nikkei 225 Index March rebalance ends in January. There could be one outright change and one or two others driven by sector balance.
Depending on the changes, passive trackers will need to buy between 8.2-20.5x ADV (8.75%-24.5% of real float) and sell between 9-38x ADV on the deletions.

Fast Retailing's PAF could see a double reduction to keep the stock weight capped at 10%. There will be huge passive selling leading to funding inflows for other index constituents.


Nikkei 225 Index Rebalance Preview (Mar 2025): Ranking, Capping, Funding & Other Changes

<ul>
<li>Big Tesla move up may help sentiment for Panasonic, although gains are largely Trump related.</li>
<li>Lumentum strong numbers and big move up will continue to help sentiment for optical related plays in Japan.</li>
<li>Good numbers from Sony with solid performance from its mainstay games and imaging segments.</li>
</ul>


Big Tesla move up may help sentiment for Panasonic, although gains are largely Trump related.
Lumentum strong numbers and big move up will continue to help sentiment for optical related plays in Japan.
Good numbers from Sony with solid performance from its mainstay games and imaging segments.


Japan Morning Connection: Strong Earnings from Sony's Games and Sensors

Japan

ROHM COMPANY LIMITED manufactures custom linear integrated circuits and semiconductor devices for use primarily in consumer electronics.  The Company has plants and sales offices worldwide.  Rohm's subsidiaries include Wako Electric and Apollo Electronics.

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ROHM Co Ltd (6963 JP)

Nikkei 225 March 2023 Review Quiddity Leaderboard (Nov 2022)

Updated Nikkei 225 Leaderboard for the March 2023 review. 10 weeks of data left til the cutoff. The top 3 ADDs are unch'd since Sep. The 3rd-ranked...

Travis Lundy

A Belated Look Back at Our 2020 and 2021 Conviction Calls and a Look Ahead to 2022

We take a look back at our conviction calls from 2020 and 2021 to assess performance and put the strong start to our 2022 names in context.

Mio Kato

Japan Morning Connection: JP Set for a More Upbeat Start After Tech Rebound

Nidec may be in focus on a lifeline for SMCI and NVDA's heating issues, Tesla and power-semis up on self-driving support, no bid for JP SPE's and...

Andrew Jackson

Nikkei 225 Index Rebalance Preview (Mar 2025): Ranking, Capping, Funding & Other Changes

There should be 1 change, could be 3 due to sector balance. The impact on the potential changes varies from 8-38x ADV. Fast Retailing could see a...

Brian Freitas

Japan Morning Connection: Strong Earnings from Sony's Games and Sensors

Tesla's move may boost Panasonic sentiment, Lumentum's strong numbers will benefit optical plays, Sony reports good numbers driven by games and...

Andrew Jackson

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52-week Range

Market Cap (USDm)

P/E

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Nikkei 225 March 2023 Review Quiddity Leaderboard (Nov 2022)

Updated Nikkei 225 Leaderboard for the March 2023 review. 10 weeks of data left til the cutoff. The top 3 ADDs are unch'd since Sep. The 3rd-ranked...

Travis Lundy

A Belated Look Back at Our 2020 and 2021 Conviction Calls and a Look Ahead to 2022

We take a look back at our conviction calls from 2020 and 2021 to assess performance and put the strong start to our 2022 names in context.

Mio Kato

Japan Morning Connection: JP Set for a More Upbeat Start After Tech Rebound

​Nidec may be in focus on a lifeline for SMCI and NVDA's heating issues, Tesla and power-semis up on self-driving support, no bid for JP SPE's and...

Andrew Jackson

Nikkei 225 Index Rebalance Preview (Mar 2025): Ranking, Capping, Funding & Other Changes

There should be 1 change, could be 3 due to sector balance. The impact on the potential changes varies from 8-38x ADV. Fast Retailing could see a...

Brian Freitas

Japan Morning Connection: Strong Earnings from Sony's Games and Sensors

​Tesla's move may boost Panasonic sentiment, Lumentum's strong numbers will benefit optical plays, Sony reports good numbers driven by games and...

Andrew Jackson

Nidec may be in focus on a lifeline for SMCI and NVDA's heating issues, Tesla and power-semis up on self-driving support, no bid for JP SPE's and...

Tesla's move may boost Panasonic sentiment, Lumentum's strong numbers will benefit optical plays, Sony reports good numbers driven by games and...