Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Last Week in Event SPACE: Prosus/Naspers, Wilmar, Invesco Office, Boral, Honshu Chem, Crown Resorts

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

The Nikkei today released a market consultation on proposed changes to 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>. Most of the changes are minor and will have little to no impact on the index.The main changes proposed include capping the weight of new constituents in the index at 1% by using a Price Adjustment Factor, limiting the number of index changes at a periodic review to 3, and changing the index universe from stocks listed on TSE's 1st section to stocks that are listed on the Prime Market (post the reorganisation).Limiting the weight of the new constituents in the index at 1% will keep index turnover low and reduce the impact of passive buying on the inclusions.Limiting the Price Adjustment Factor to 1 decimal place will necessitate selling of <a href="https://www.smartkarma.com/entities/sompo-holdings-inc" target="_blank" data-smartkarma-citation="entities:632:1" rel="noopener">Sompo Holdings (8630 JP)</a> by passive funds if the proposals are implemented.The consultation closes on 13 June and comments can be submitted <a href="https://indexes.nikkei.co.jp/en/nkave/governance" target="_blank" rel="noopener">here</a>.Finally, the Nikkei thanks everyone's contribution to the consultation but clearly states that it will make a decision at its own discretion... thanks for sharing though!

The Nikkei today released a market consultation on proposed changes to the Nikkei 225 (NKY INDEX). Most of the changes are minor and will have little to no impact on the index.The main changes proposed include capping the weight of new constituents in the index at 1% by using a Price Adjustment Factor, limiting the number of index changes at a periodic review to 3, and changing the index universe from stocks listed on TSE's 1st section to stocks that are listed on the Prime Market (post the reorganisation).Limiting the weight of the new constituents in the index at 1% will keep index turnover low and reduce the impact of passive buying on the inclusions.Limiting the Price Adjustment Factor to 1 decimal place will necessitate selling of Sompo Holdings (8630 JP) by passive funds if the proposals are implemented.The consultation closes on 13 June and comments can be submitted here.Finally, the Nikkei thanks everyone's contribution to the consultation but clearly states that it will make a decision at its own discretion... thanks for sharing though!

Nikkei225 Market Consultation: Tweaks and Changes Proposed; Nikkei Will Use Its Own Discretion

Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Thematic (Sector/Industry)

*Texas Storms = Japan Risk:Insurers could suffer record 1Q20 catastrophic (CAT) losses after the historic State of Texas (and beyond) winter storm Uri, which crippled Texas’ electrical grid and caused extensive property damage. Most directly exposed would appear to be Sompo (~2%), and Tokio Marine (1%); and*Watch Your Reinsurance: The risk of this Uri event hitting reinsurance layers is quickly rising given the fluid events and the creep in losses. The situation looks to be quite dicey given the economic impact estimate of between USD 45-50 bn. Add this to Texas’ poor handling of COVID-19, and no doubt this CAT event will result higher bankruptcies across retail energy power companies, energy drillers, etc. which should be additive to reinsurance losses.

*Texas Storms = Japan Risk:Insurers could suffer record 1Q20 catastrophic (CAT) losses after the historic State of Texas (and beyond) winter storm Uri, which crippled Texas’ electrical grid and caused extensive property damage. Most directly exposed would appear to be Sompo (~2%), and Tokio Marine (1%); and*Watch Your Reinsurance: The risk of this Uri event hitting reinsurance layers is quickly rising given the fluid events and the creep in losses. The situation looks to be quite dicey given the economic impact estimate of between USD 45-50 bn. Add this to Texas’ poor handling of COVID-19, and no doubt this CAT event will result higher bankruptcies across retail energy power companies, energy drillers, etc. which should be additive to reinsurance losses.

Japan Insurers – Texas, Don’t Hold ‘Em

*High Court Ruling: The United Kingdom High Court ruled on a test case brought forth by the Financial Conduct Authority (FCA) indicates that the "COVID-19 pandemic and the government and public response were a single cause of the covered loss, which is a key requirement for claims to be paid even if the policy provides cover". The decision on th Business Interruption (BI) case against the insurance industry is mostly in favorable to policyholders; and *Asia-Pac To Follow: As many countries in Asia-Pacific are Common Law nations, High Court rulings such as this have a tendency to set precedent. It also wouldn’t be a surprise to see significant capital raises given the challenges to solvency.

*High Court Ruling: The United Kingdom High Court ruled on a test case brought forth by the Financial Conduct Authority (FCA) indicates that the "COVID-19 pandemic and the government and public response were a single cause of the covered loss, which is a key requirement for claims to be paid even if the policy provides cover". The decision on th Business Interruption (BI) case against the insurance industry is mostly in favorable to policyholders; and *Asia-Pac To Follow: As many countries in Asia-Pacific are Common Law nations, High Court rulings such as this have a tendency to set precedent. It also wouldn’t be a surprise to see significant capital raises given the challenges to solvency.  

Asian Insurers – High Court Ruling A Harbinger For Region

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

Palantir Technologies  / Equity Capital Markets

Palantir Technologies is one of the most anticipated IPOs globally in 2020. Established in 2003, headquartered in Palo Alto, and backed by the highly influential Peter Thiel and the CIA, Palantir is ready to complete its IPO in the next few weeks (most likely in September or October, prior to the U.S. Presidential election in early November).On July 6th, Palantir filed a confidential registration with the U.S. SEC. Palantir's core business is developing software to analyze information. Its main customer is various branches of the U.S. government, including the Department of Defense. <div class="content-highlight">
The main purpose of this insight is as follows:
<ul>
<li>
Discuss the potential inflection point of the global IPO market with the completion of the Palantir IPO</li>
<li>
Provide an initial overview of Palantir</li>
<li>
Highlight potential investment opportunities prior to the Palantir listing</li>
</ul>
</div>

Palantir Technologies is one of the most anticipated IPOs globally in 2020. Established in 2003, headquartered in Palo Alto, and backed by the highly influential Peter Thiel and the CIA, Palantir is ready to complete its IPO in the next few weeks (most likely in September or October, prior to the U.S. Presidential election in early November).On July 6th, Palantir filed a confidential registration with the U.S. SEC. Palantir's core business is developing software to analyze information. Its main customer is various branches of the U.S. government, including the Department of Defense. 
The main purpose of this insight is as follows:


Discuss the potential inflection point of the global IPO market with the completion of the Palantir IPO

Provide an initial overview of Palantir

Highlight potential investment opportunities prior to the Palantir listing



Palantir - The Most Anticipated IPO in 2020

Japan

The Dai-ichi Life Insurance Company Ltd. underwrites and sells life, health and annuity insurance to groups and individuals. The Company offers a wide variety of insurance products to suit different needs, ranging from children's school tuition to emergency funds for the elderly.

Japan Post Insurance Co. Ltd. operates life insurance business. The Company offers whole life insurance, education endowment, ordinary endowment, medical insurance, and special endowment insurance. Japan Post Insurance provides services for individuals and businesses throughout Japan.

T&D Holdings, Inc. is a holding company established through the merger of Taiyo Life Insurance, Daido Life Insurance, and T&D Financial Life Insurance. The Company manages life insurance operations for its subsidiaries.

MS&AD Insurance Group Holdings, Inc. is a holding company established through reorganization of Mitsui Sumitomo Insurance Company, Limited.  The Group writes marine, fire, casualty, automobile, life, and allied insurance policies. MS&AD Insurance Group also operates financial services and agencies.

LIFENET INSURANCE COMPANY provides a wide range of life insurance products and services. The company mainly provides the products and services through the internet. The company also provides asset management services.

Anicom Holdings, Inc. is a holding company which was established through the merger of Anicom Insurance, Inc., Anicom Frontier, Inc., Anicom Pafe, Inc. The Company provides health insurance policies for pets and operates insurance agency through internet, personal visiting. Anicom Holdings also researches and provides pet business information.

Dream Incubator Inc. nurtures venture companies.  The Company supports companies by providing strategic insights and other consulting services.

Advance Create Co., Ltd operates insurance agency through newspaper advertising, internet, visiting, telemarketing.  The Company operates consulting and advertising services.

SBI Insurance Group Co., Ltd. operates as an insurance company. The Company offers life, non-life, short-term, and other insurance products. SBI Insurance Group provides its services in Japan.

Resona Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, provides financial services, including banking, trust operations, and credit card services. Resona Holdings also offers consulting services related to personal loans, asset management, and asset succession.

PICC Property and Casualty Company Limited provides insurance services. The Company provides property loss insurances, liability insurances, credit insurances, accidental injury insurances, short term health insurances, guarantee insurances, and other insurance products. PICC Property and Casualty also operates investment businesses.

QBE Insurance Group Limited is an insurance company which underwrites most forms of commercial and industrial insurance policies, as well as individual policies. QBE also manages Lloyds syndicates and provides investment management services. The Company provides its services both domestically and internationally.

Erie Indemnity Company is the management company for the Erie Insurance Exchange. The Company is also involved in the property and casualty insurance business through its wholly-owned subsidiaries and through its management of Flagship City Insurance Company. Erie Indemnity sells auto, home, life and business insurance in the United States.

Everest Re Group, Ltd. provides reinsurance to property and casualty insurers in the United States and international markets.  The Company also provides property and casualty insurance to policyholders in the United States and Canada.  In addition, Everest Re offers excess and surplus lines insurance in the United States.

Cincinnati Financial Corporation, through its subsidiaries, offers property and casualty and life insurance.  The Company markets a variety of insurance products and provides leasing and financing services.

China Pacific Insurance (Group) Company, Ltd. is an integrated insurance services provider. The Company offers life and property insurance products through its subsidiaries.

Loews Corporation is a diversified holding company.  The Company, through its subsidiaries, is involved in a variety of businesses including commercial property-casualty insurance, offshore drilling, natural gas exploration and production, operation of natural gas pipeline systems, and the operation of hotels and resorts.

Markel Corporation markets and underwrites specialty insurance products and programs to a variety of niche markets.  The Company also underwrites a diverse property, casualty, marine, and aviation insurance and reinsurance business on a worldwide basis.

W. R. Berkley Corporation, an insurance holding company, conducts operations in various segments of the property casualty insurance business.  Segments include specialty lines of insurance, alternative markets, reinsurance, regional property casualty insurance, and international.

Principal Financial Group, Inc. offers businesses, individuals and institutional clients a range of financial products and services.  The Company offers retirement solutions, life and health insurance, wellness programs, and investment and banking products.

Sompo Holdings, Inc, is a holding company established through the integration of Sompo Japan Insurance Inc. and NIPPONKOA Insurance Company Limited. Through subsidiaries, the Company provides non-life insurance including marine, fire, and automobile, as well as life insurance.

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Sompo Holdings (8630 JP)

Last Week in Event SPACE: Prosus/Naspers, Wilmar, Invesco Office, Boral, Honshu Chem, Crown Resorts

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Nikkei225 Market Consultation: Tweaks and Changes Proposed; Nikkei Will Use Its Own Discretion

There are a few big changes proposed to the Nikkei225 index methodology along with a few minor tweaks. Sompo (8630 JP) will be sold at the 2021...

Brian Freitas

Japan Insurers – Texas, Don’t Hold ‘Em

JAPAN INSURANCE: Insurers could suffer record 1Q20 catastrophic (CAT) losses after the Texas winter storm. Most directly exposed are Sompo (~2%)...

Thomas J. Monaco

Asian Insurers – High Court Ruling A Harbinger For Region

*High Court Ruling: The United Kingdom High Court ruled on a test case brought forth by the Financial Conduct Authority (FCA) indicates that the...

Thomas J. Monaco

Palantir - The Most Anticipated IPO in 2020

Palantir Technologies is one of the most anticipated IPOs globally in 2020. Established in 2003, headquartered in Palo Alto, and backed by the...

Douglas Kim

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