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>At the October rebalance, there are 970 stocks that will have a lower FFW while 114 stocks will have a higher FFW. 493 stocks will undergo a Phased Weight Reduction.</li>
<li>Estimated one-way turnover is 2.54% resulting in a one-way trade of ¥1.815tn. 500 stocks have over 4 days ADV to trade, 100 stocks have over 9 days ADV to trade.</li>
<li>Setting the threshold at +/-US$50m to trade, the stocks with inflows have outperformed the stocks with outflows by 6.5% over the last four months.</li>
</ul>


At the October rebalance, there are 970 stocks that will have a lower FFW while 114 stocks will have a higher FFW. 493 stocks will undergo a Phased Weight Reduction.
Estimated one-way turnover is 2.54% resulting in a one-way trade of ¥1.815tn. 500 stocks have over 4 days ADV to trade, 100 stocks have over 9 days ADV to trade.
Setting the threshold at +/-US$50m to trade, the stocks with inflows have outperformed the stocks with outflows by 6.5% over the last four months.


TOPIX October Rebalance: BIG One With ¥1.8tn a Side to Trade

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>The founder and former chairman and CEO of <a href="https://www.smartkarma.com/entities/nexon-co-ltd" target="_blank" data-smartkarma-citation="entities:16032:1" rel="noopener">Nexon (3659 JP)</a> passed away according to both Nexon and his holding company NXC. Both announced it late afternoon 1 March.</li>
<li>NXC - the near-parent  (47+% stake) of Nexon tried to sell Nexon/NXC in H1 2019 to no avail. Since then, profits have rebounded somewhat, and investments have multiplied. </li>
<li>The estate may wish to sell Nexon shares, or its entire stake, at some point near-term.</li>
</ul>


The founder and former chairman and CEO of Nexon (3659 JP) passed away according to both Nexon and his holding company NXC. Both announced it late afternoon 1 March.
NXC - the near-parent  (47+% stake) of Nexon tried to sell Nexon/NXC in H1 2019 to no avail. Since then, profits have rebounded somewhat, and investments have multiplied. 
The estate may wish to sell Nexon shares, or its entire stake, at some point near-term.


Nexon - Founder Kim Jung-Ju Passes, Raises Question if Nexon Deal Is Back In Play

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kadokawa-dwango-corp" target="_blank" data-smartkarma-citation="entities:4152:1" rel="noopener">Kadokawa Dwango (9468 JP)</a> shares rose 16% after <a href="https://www.reuters.com/markets/deals/sony-talks-buy-media-powerhouse-behind-elden-ring-sources-say-2024-11-19/" target="_blank" rel="noopener">Reuters reported</a> that <a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony Corp (6758 JP)</a> is in talks to acquire it. Kadokawa confirmed an initial letter of intent. </li>
<li>The privatisation interest is unsurprising as Kadokawa’s publishing arm, acclaimed intellectual properties, and positioning in the anime industry would be attractive to Sony.</li>
<li>The upside is limited as the last close reflects a significant takeover premium. There is a risk if a binding proposal emerges, it could be takeunder like Bain/T-Gaia.</li>
</ul>



Kadokawa Dwango (9468 JP) shares rose 16% after Reuters reported that Sony Corp (6758 JP) is in talks to acquire it. Kadokawa confirmed an initial letter of intent. 
The privatisation interest is unsurprising as Kadokawa’s publishing arm, acclaimed intellectual properties, and positioning in the anime industry would be attractive to Sony.
The upside is limited as the last close reflects a significant takeover premium. There is a risk if a binding proposal emerges, it could be takeunder like Bain/T-Gaia.


Kadokawa (9468 JP): Take Profits as a Sony Privatisation Rumours Surface

Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>SMCI +32% as it staves off delisting continues to set a positive tone for Nidec</li>
<li>Sony reportedly looking to fully acquire Kadokawa points to more downside for Bandai Namco</li>
<li>Highlights relative cheapness for Japanese game stocks as take-over targets</li>
</ul>


SMCI +32% as it staves off delisting continues to set a positive tone for Nidec
Sony reportedly looking to fully acquire Kadokawa points to more downside for Bandai Namco
Highlights relative cheapness for Japanese game stocks as take-over targets


Japan Morning Connection: Sony Eyeing Elden Ring as a PS Exclusive to Counter CoD on Xbox?

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>Global equities (MSCI ACWI -- ACWI-US) and the U.S. (S&amp;P 500) remain topside their respective bases at $117 and 5650-5670.</li>
<li>As discussed last week (October 17, 2024 Int'l Compass), we upgraded our outlook on global equities (MSCI ACWI) to bullish, saying to use any pre-election pullback as opportunity to buy.</li>
<li>The pullback appears to be underway, and we are buyers as long as ACWI-US and S&amp;P 500 remain above their aforementioned bases</li>
</ul>


Global equities (MSCI ACWI -- ACWI-US) and the U.S. (S&amp;P 500) remain topside their respective bases at $117 and 5650-5670.
As discussed last week (October 17, 2024 Int'l Compass), we upgraded our outlook on global equities (MSCI ACWI) to bullish, saying to use any pre-election pullback as opportunity to buy.
The pullback appears to be underway, and we are buyers as long as ACWI-US and S&amp;P 500 remain above their aforementioned bases


Buying Global Technology; SPX and MSCI ACWI Above Base Supports; Sea, TSMC, SAP, Luxshare, & More

Japan

SEGA SAMMY HOLDINGS INC. is a holding company established through the merger of Sega and Sammy.  The Group mainly develops and manufactures commercial-use video game machine, home-use video game software, and pachinko pinball machine. Sega Sammy Holdings also operates amusement parks.

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Sega Sammy Holdings (6460 JP)

TOPIX October Rebalance: BIG One With ¥1.8tn a Side to Trade

Lower FFWs on 970 stocks and higher FFWs on 114 stocks will result in one-way turnover of 2.52% leading to a one-way trade of ¥1.8tn at the close...

Brian Freitas

Nexon - Founder Kim Jung-Ju Passes, Raises Question if Nexon Deal Is Back In Play

Nexon's founder Kim Jung-ju has passed away. This raises the question of the disposition of the 47+% stake belonging to his holding company NXC. If...

Travis Lundy

Kadokawa (9468 JP): Take Profits as a Sony Privatisation Rumours Surface

While an acquisition has a strong strategic rationale, the upside is limited as the last close reflects a significant takeover premium. There is a...

Arun George

Japan Morning Connection: Sony Eyeing Elden Ring as a PS Exclusive to Counter CoD on Xbox?

SMCI's strong performance and efforts to avoid delisting set positive tone for Nidec. Sony's potential acquisition of Kadokawa point to downside...

Andrew Jackson

Buying Global Technology; SPX and MSCI ACWI Above Base Supports; Sea, TSMC, SAP, Luxshare, & More

Buying Global Technology; $SPX and MSCI $ACWI Remain Above Base Supports at 5650-5670 and $117; Buying Taiwan Semiconductor $TSM $SE $SAP $GRAB...

Vermilion Research

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TOPIX October Rebalance: BIG One With ¥1.8tn a Side to Trade

Lower FFWs on 970 stocks and higher FFWs on 114 stocks will result in one-way turnover of 2.52% leading to a one-way trade of ¥1.8tn at the close...

Brian Freitas

Nexon - Founder Kim Jung-Ju Passes, Raises Question if Nexon Deal Is Back In Play

Nexon's founder Kim Jung-ju has passed away. This raises the question of the disposition of the 47+% stake belonging to his holding company NXC. If...

Travis Lundy

Kadokawa (9468 JP): Take Profits as a Sony Privatisation Rumours Surface

While an acquisition has a strong strategic rationale, the upside is limited as the last close reflects a significant takeover premium. There is a...

Arun George

Japan Morning Connection: Sony Eyeing Elden Ring as a PS Exclusive to Counter CoD on Xbox?

​SMCI's strong performance and efforts to avoid delisting set positive tone for Nidec. Sony's potential acquisition of Kadokawa point to downside...

Andrew Jackson

Buying Global Technology; SPX and MSCI ACWI Above Base Supports; Sea, TSMC, SAP, Luxshare, & More

Buying Global Technology; $SPX and MSCI $ACWI Remain Above Base Supports at 5650-5670 and $117; Buying Taiwan Semiconductor $TSM $SE $SAP $GRAB...

Vermilion Research

SMCI's strong performance and efforts to avoid delisting set positive tone for Nidec. Sony's potential acquisition of Kadokawa point to downside...