Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Yesterday, a Kyodo News article suggested SBI was "planning to take Shinsei private."</li>
<li>This morning, near-identically-worded replies were proffered, belatedly, and SBI appears to have moved its earnings release date to match Shinsei's.</li>
<li>It helps to remember Communications mandated by Exchange Rules are worded so that they are not technically or legally incorrect. Shareholder transparency and good governance is not the goal.</li>
</ul>


Yesterday, a Kyodo News article suggested SBI was "planning to take Shinsei private."
This morning, near-identically-worded replies were proffered, belatedly, and SBI appears to have moved its earnings release date to match Shinsei's.
It helps to remember Communications mandated by Exchange Rules are worded so that they are not technically or legally incorrect. Shareholder transparency and good governance is not the goal.


Shinsei Bank (8303 JP) - Reading Between The Lines

<ul>
<li>The TSE announced its first large FFW rebalance under new rules and Market Segmentation. ~1,000 names see FFW drop 5% or more. 100+ rise 5+%. Reverse funding trades are significant.</li>
<li>Top BUY flow: Toyota, Olympus, Daiichi Sankyo, Tokio Marine, JP Holdings with an average of 4.0 days' ADV to buy. Softbank/9984, MitCorp, Hitachi, Suzuki, Marubeni average 4.8 days to SELL.</li>
<li>493 names start their phased weight reduction out of TOPIX because they do not meet the hurdle for minimum trading value. And... Shinsei is the most impressive SELL name.
</li>
</ul>


The TSE announced its first large FFW rebalance under new rules and Market Segmentation. ~1,000 names see FFW drop 5% or more. 100+ rise 5+%. Reverse funding trades are significant.
Top BUY flow: Toyota, Olympus, Daiichi Sankyo, Tokio Marine, JP Holdings with an average of 4.0 days' ADV to buy. Softbank/9984, MitCorp, Hitachi, Suzuki, Marubeni average 4.8 days to SELL.
493 names start their phased weight reduction out of TOPIX because they do not meet the hurdle for minimum trading value. And... Shinsei is the most impressive SELL name.



TOPIX October 2022 Rebal - BIG Names with BIG Flows

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sbi-holdings-inc" target="_blank" data-smartkarma-citation="entities:10928:1" rel="noopener">SBI Holdings (8473 JP)</a>'s subsidiary has <a href="https://www3.nhk.or.jp/news/html/20220930/k10013843881000.html" target="_blank" rel="noopener">reportedly</a> filed its application to become a Bank Holding Company, the definition being a company holding a 50% or greater stake in a bank.</li>
<li>The day after I last wrote, Shinsei <a href="https://www.shinseibank.com/corporate/en/news/pdf/pdf2022/221003_corporatenameLP_e.pdf" target="_blank" rel="noopener">announced</a> it had received approval to change its name to SBI Shinsei Bank as of 4 January 2023.</li>
<li>My expectation is the move above 50% happens sooner rather than later. And in that case, investors should think about their approach. Get your cowbells ready.</li>
</ul>



SBI Holdings (8473 JP)'s subsidiary has reportedly filed its application to become a Bank Holding Company, the definition being a company holding a 50% or greater stake in a bank.
The day after I last wrote, Shinsei announced it had received approval to change its name to SBI Shinsei Bank as of 4 January 2023.
My expectation is the move above 50% happens sooner rather than later. And in that case, investors should think about their approach. Get your cowbells ready.


Thinking Strategically About a Shinsei Position - Things To Do NOW

<ul>
<li>Last Friday most of the way through the afternoon session, media reports ran a story saying <a href="https://www.smartkarma.com/entities/sbi-holdings-inc" target="_blank" data-smartkarma-citation="entities:10928:1" rel="noopener">SBI Holdings (8473 JP)</a> had applied for a Bank Holding Company authorisation. </li>
<li>That is a filing with the FSA one makes when one wants to acquire &gt;50% of voting rights in an entity with a Banking license. Shares popped, and fell back. </li>
<li>They probably didn't pop enough. There is a BIG sell flow coming, but the timing is giri-giri on eventiness, and confident traders could take the whole trade.</li>
</ul>


Last Friday most of the way through the afternoon session, media reports ran a story saying SBI Holdings (8473 JP) had applied for a Bank Holding Company authorisation. 
That is a filing with the FSA one makes when one wants to acquire &gt;50% of voting rights in an entity with a Banking license. Shares popped, and fell back. 
They probably didn't pop enough. There is a BIG sell flow coming, but the timing is giri-giri on eventiness, and confident traders could take the whole trade.


SBI Applies for Bank Holdco License for Shinsei Stake. Aims to Go Above 50%. It's Coming.

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

<ul>
<li>JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.</li>
<li>A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.</li>
<li>Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2023 based on trading data as of end-September 2022.</li>
</ul>


JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.
Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2023 based on trading data as of end-September 2022.


Japan

SBI Holdings, Inc. manages venture capital fund which mainly invest in Internet related venture companies.  The Company also provides brokerage, investment banking, and financial services.

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SBI Holdings (8473 JP)

Shinsei Bank (8303 JP) - Reading Between The Lines

Shinsei was yesterday reported to be "planning to privatise Shinsei Bank" and today "no concrete steps are being considered to delist the Bank"....

Travis Lundy

TOPIX October 2022 Rebal - BIG Names with BIG Flows

The annual TOPIX FFW rebalance is larger this year than normal, with the twist that 493 names will now start to be phased out completely.

Travis Lundy

Thinking Strategically About a Shinsei Position - Things To Do NOW

Shinsei Bank may be in its last throes of independence. Shareholders usually do not get the chance to pester the Board before a price is...

Travis Lundy

SBI Applies for Bank Holdco License for Shinsei Stake. Aims to Go Above 50%. It's Coming.

SBI has applied for the ability go above 50% in Shinsei. They should get approval in a month, around the time of the huge TOPIX selldown. This...

Travis Lundy

JPX-Nikkei 400 Rebal 2023: End-Sep 2022

The HIGH AND MED conviction groups of Potential ADDs could outperform the HIGH AND MED conviction groups of Potential DELs in the next few weeks.

Janaghan Jeyakumar, CFA

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