Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>On Friday, <a href="https://www.smartkarma.com/entities/sbi-sumishin-net-bank-ltd" target="_blank" data-smartkarma-citation="entities:34572:1" rel="noopener">SBI Sumishin Net Bank (7163 JP)</a> fell 12.5% in the last 90 minutes of trading. This was not due to their Q3 earnings release (out 30 January).</li>
<li>It seemed due to investor disappointment in the content of the NTT earnings call. As discussed in the forked insight, there had been speculation NTT would buy SBI Sumishin.</li>
<li>Investors had thought NTT would pay more than 28x earnings and a ¥600bn premium to book to buy the business. At 23.7x Mar25e EPS and 4.1x book, it's still expensive.</li>
</ul>


On Friday, SBI Sumishin Net Bank (7163 JP) fell 12.5% in the last 90 minutes of trading. This was not due to their Q3 earnings release (out 30 January).
It seemed due to investor disappointment in the content of the NTT earnings call. As discussed in the forked insight, there had been speculation NTT would buy SBI Sumishin.
Investors had thought NTT would pay more than 28x earnings and a ¥600bn premium to book to buy the business. At 23.7x Mar25e EPS and 4.1x book, it's still expensive.


SBI Sumishin NetBank (7163) - Oops! NTT Docomo May Not Be There As a Buyer

<ul>
<li>An <a href="https://bunshun.jp/denshiban/articles/b10138" target="_blank" rel="noopener">article</a> in Japanese weekly magazine <em>Bunshun </em>this morning sent shares in<a href="https://www.smartkarma.com/entities/sbi-sumishin-net-bank-ltd" target="_blank" data-smartkarma-citation="entities:34572:1" rel="noopener">SBI Sumishin Net Bank (7163 JP)</a> limit up +17% with a headline that NTT Docomo was interested to buy.</li>
<li>Without access to the article, I can't go deep, but the base concept is that NTT Docomo is "worried" about KDDI (which has a bank, as does Softbank Corp)</li>
<li>It is not clear how serious it is, SBI Sumishin is super-expensive, and buying a bank isn't the same as buying a company. Hmmm...</li>
</ul>


An article in Japanese weekly magazine Bunshun this morning sent shares inSBI Sumishin Net Bank (7163 JP) limit up +17% with a headline that NTT Docomo was interested to buy.
Without access to the article, I can't go deep, but the base concept is that NTT Docomo is "worried" about KDDI (which has a bank, as does Softbank Corp)
It is not clear how serious it is, SBI Sumishin is super-expensive, and buying a bank isn't the same as buying a company. Hmmm...


NTT (9432 JP) And SBI Sumishin NetBank (7163 JP)? Maybe. Maybe Not. Seven Bank A Better Idea

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

Equity Bottom-Up

SBI Sumishin Net Bank  / Equity Bottom-Up

<ul>
<li>This is not a typo: SBI Sumishin Net Bank saw loans up 21% YoY in 1Q24, operating in Japan</li>
<li>The bank has achieved cost scale, with acquisition cost per account a fraction of 2 yrs ago</li>
<li>Credit quality remains exceptional, amongst best in Japan, with 0.06% NPL ratio in 1Q24</li>
</ul>


This is not a typo: SBI Sumishin Net Bank saw loans up 21% YoY in 1Q24, operating in Japan
The bank has achieved cost scale, with acquisition cost per account a fraction of 2 yrs ago
Credit quality remains exceptional, amongst best in Japan, with 0.06% NPL ratio in 1Q24


SBI Sumishin Net Bank - Dramatic ROA Expansion, Steady & Strong, Profit & Loan Growth, ROE at 19%

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>JPX has commenced a market consultation on changes to 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 (TPX INDEX)</a> including expansion of the universe and periodic stock selection.</li>
<li>Based on current market cap/ liquidity, there could be 38 adds and 447 deletions for 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>, though the changes only start in October 2026. </li>
<li>The deletions will be phased out of the index in 8 steps that will end in July 2028 and most of the stocks will move to the TOPIX Next-tier. </li>
</ul>


JPX has commenced a market consultation on changes to the TSE Tokyo Price Index TOPIX (TPX INDEX) including expansion of the universe and periodic stock selection.
Based on current market cap/ liquidity, there could be 38 adds and 447 deletions for the TSE Tokyo Price Index TOPIX, though the changes only start in October 2026. 
The deletions will be phased out of the index in 8 steps that will end in July 2028 and most of the stocks will move to the TOPIX Next-tier. 


TOPIX Market Consultation: Wider Next-Gen Universe in a Couple of Years; But Stocks Moving Already

Thematic (Sector/Industry)

<ul>
<li>Comments today from BOJ suggest we are nearing the end of negative interest rates in Japan, which can mean an immediate boost to net interest income for Japan's banks</li>
<li>Many banks have cash and deposits with the BOJ at high levels, where yields are negative, and this can be the first big positive delta to bank's income</li>
<li>Credit metrics in Japan are improving and loan growth is accelerating, this is generally at odds with other major banking systems, US, UK, Singapore</li>
</ul>


Comments today from BOJ suggest we are nearing the end of negative interest rates in Japan, which can mean an immediate boost to net interest income for Japan's banks
Many banks have cash and deposits with the BOJ at high levels, where yields are negative, and this can be the first big positive delta to bank's income
Credit metrics in Japan are improving and loan growth is accelerating, this is generally at odds with other major banking systems, US, UK, Singapore


Japan Banks - Near End of Negative Rates BOJ, Deposits with BOJ to See Big Yield Rise, Not Only JGBs

Japan

SBI Sumishin Net Bank, Ltd. offers general banking services. The Company provides transfer accounts, deposits, currency savings, mortgages, net loans, investment trusts, insurance products, and other banking services. SBI Sumishin Net Bank offers services to individuals and businesses.

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SBI Sumishin Net Bank (7163 JP)

SBI Sumishin NetBank (7163) - Oops! NTT Docomo May Not Be There As a Buyer

SBI Sumishin went limit up in late Nov2024 when a weekly suggested NTT was interested. I thought not, but the stock rose 50% in 10wks. Friday NTT...

Travis Lundy

NTT (9432 JP) And SBI Sumishin NetBank (7163 JP)? Maybe. Maybe Not. Seven Bank A Better Idea

A news weekly magazine Bunshun today had an article suggesting a bank executive thought NTT Docomo was on its way to buying SBI Sumishin Netbank....

Travis Lundy

SBI Sumishin Net Bank - Dramatic ROA Expansion, Steady & Strong, Profit & Loan Growth, ROE at 19%

With Brian Freitas research on new TOPIX changes, SBI Sumishin Net Bank is one of the greatest beneficiaries, a bank in Japan which stands out well...

Daniel Tabbush

TOPIX Market Consultation: Wider Next-Gen Universe in a Couple of Years; But Stocks Moving Already

JPX has commenced a market consultation that could result in 38 adds and 447 deletions for the index in Oct 2026. There are a lot of high impact...

Brian Freitas

Japan Banks - Near End of Negative Rates BOJ, Deposits with BOJ to See Big Yield Rise, Not Only JGBs

The BOJ finally raised short term rates today from 25bps to 50bps. This is an historic rate rise. Japan's banks can see better income from JGBs,...

Daniel Tabbush

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