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

<ul>
<li>Profit continues to expand at Mitsui E&amp;S after its transition to a holding company, now reporting over 400% profit growth for 9 months YTD. </li>
<li>The company is doing well to keep its operating costs down, with an improving funding structure and balance, as its revenue grows more than COGs.</li>
<li>We wonder if there will be more revisions upward to profit, with new initiatives and with a more proven recent track record.</li>
</ul>


Profit continues to expand at Mitsui E&amp;S after its transition to a holding company, now reporting over 400% profit growth for 9 months YTD. 
The company is doing well to keep its operating costs down, with an improving funding structure and balance, as its revenue grows more than COGs.
We wonder if there will be more revisions upward to profit, with new initiatives and with a more proven recent track record.


Mitsui E&S - Near Record ROE as Profit Continues to Expand From Multiple Drivers

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>
<a href="https://www.smartkarma.com/entities/disco-corp" target="_blank" data-smartkarma-citation="entities:15817:1" rel="noopener">DISCO (6146 JP)</a>, <a href="https://www.smartkarma.com/entities/socionext-inc" target="_blank" data-smartkarma-citation="entities:36351:1" rel="noopener">Socionext (6526 JP)</a> and <a href="https://www.smartkarma.com/entities/zozo-inc" target="_blank" data-smartkarma-citation="entities:18379:1" rel="noopener">ZOZO (3092 JP)</a> will replace <a href="https://www.smartkarma.com/entities/takara-holdings-inc" target="_blank" data-smartkarma-citation="entities:11074:1" rel="noopener">Takara Holdings (2531 JP)</a>, <a href="https://www.smartkarma.com/entities/sumitomo-osaka-cement-co-ltd" target="_blank" data-smartkarma-citation="entities:20460:1" rel="noopener">Sumitomo Osaka Cement (5232 JP)</a> and <a href="https://www.smartkarma.com/entities/pacific-metals-co-ltd" target="_blank" data-smartkarma-citation="entities:3439:1" rel="noopener">Pacific Metals (5541 JP)</a> in the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225</a>.</li>
<li>
<a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori Holdings (9843 JP)</a>'s PAF will increase from 0.3 to 0.5, and surprisingly there is no PAF adjustment for <a href="https://www.smartkarma.com/entities/zozo-inc" target="_blank" data-smartkarma-citation="entities:18379:1" rel="noopener">ZOZO Inc (3092 JP)</a>. </li>
<li>Passive trackers need to buy between 1-18 days of ADV on the adds while selling between 2.7-28 days of ADV on the deletes. There is a big funding trade too.</li>
</ul>



DISCO (6146 JP), Socionext (6526 JP) and ZOZO (3092 JP) will replace Takara Holdings (2531 JP), Sumitomo Osaka Cement (5232 JP) and Pacific Metals (5541 JP) in the Nikkei 225.

Nitori Holdings (9843 JP)'s PAF will increase from 0.3 to 0.5, and surprisingly there is no PAF adjustment for ZOZO Inc (3092 JP). 
Passive trackers need to buy between 1-18 days of ADV on the adds while selling between 2.7-28 days of ADV on the deletes. There is a big funding trade too.


Nikkei 225 Index Rebalance: DISCO, Socionext, ZOZO In; PacMetals, Sumitomo Osaka, Takara Holding Out

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>
<a href="https://www.smartkarma.com/entities/zozo-inc" target="_blank" data-smartkarma-citation="entities:18379:1" rel="noopener">ZOZO Inc (3092 JP)</a> is +10% since the close <em>after</em> the Nikkei 225 inclusion announcement vs Nikkei225 +2%. Fellow upweight Nitori is up too. Disco and Socionext are up less.</li>
<li>All three inclusions and one upweight see considerable inclusion demand when compared to active holdings. Some more than others. </li>
<li>Some trades here are more interesting than others, still. Cumulative excess volumes are one guide. Fundamentals, and flow dynamics are another.</li>
</ul>



ZOZO Inc (3092 JP) is +10% since the close after the Nikkei 225 inclusion announcement vs Nikkei225 +2%. Fellow upweight Nitori is up too. Disco and Socionext are up less.
All three inclusions and one upweight see considerable inclusion demand when compared to active holdings. Some more than others. 
Some trades here are more interesting than others, still. Cumulative excess volumes are one guide. Fundamentals, and flow dynamics are another.


Mar24 Nikkei 225 Rebal: Zozo (3092) And Other ADDs Update

<ul>
<li>There were a few rebalance announcements in the last week and the <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">SSE STAR50 (STAR50 INDEX)</a> and STAR100 Index rebalances were implemented at the close on Friday.</li>
<li>There are a lot of rebalances that will be implemented at the close on the coming Thursday and Friday.</li>
<li>Another big week of inflows for onshore China ETFs with Central Huijin likely behind the big flows to ETFs tracking the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">Shanghai Shenzhen CSI 300 Inde (SHSZ300 INDEX)</a>. </li>
</ul>


There were a few rebalance announcements in the last week and the SSE STAR50 (STAR50 INDEX) and STAR100 Index rebalances were implemented at the close on Friday.
There are a lot of rebalances that will be implemented at the close on the coming Thursday and Friday.
Another big week of inflows for onshore China ETFs with Central Huijin likely behind the big flows to ETFs tracking the Shanghai Shenzhen CSI 300 Inde (SHSZ300 INDEX). 


Index Rebalance & ETF Flow Recap: NKY, ASX, CSI300, A50, STTF, LowVol30, Value Up

<ul>
<li>The changes to the Nikkei 225 Average for the March 2024 Review were announced today after the close. A little earlier than I expected. </li>
<li>Socionext, Disco, Zozo IN; Takara Hldgs, Sumi Osaka Cement, Pacific Metals OUT. Nitori PAF increase. US$4bn+ to trade one way on 29Mar close. One interesting surprise. </li>
<li>Overall more impactful than it looks. And it changes the front-end arithmetic on <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a>. There may be fun on the DELETEs.</li>
</ul>


The changes to the Nikkei 225 Average for the March 2024 Review were announced today after the close. A little earlier than I expected. 
Socionext, Disco, Zozo IN; Takara Hldgs, Sumi Osaka Cement, Pacific Metals OUT. Nitori PAF increase. US$4bn+ to trade one way on 29Mar close. One interesting surprise. 
Overall more impactful than it looks. And it changes the front-end arithmetic on Fast Retailing (9983 JP). There may be fun on the DELETEs.


Mar24 Nikkei 225 Rebal - Socionext, Disco, Zozo IN; US$4bn One-Way; More Impactful Than It Looks

Japan

Sumitomo Osaka Cement Co., Ltd. produces cement.  The Company also manufactures non-cement products including ultrafine particles used for cosmetics and opto electronics.  Sumitomo Osaka Cement has overseas production facilities.

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Sumitomo Osaka Cement (5232 JP)

Mitsui E&S - Near Record ROE as Profit Continues to Expand From Multiple Drivers

Mitsui E&S is recording strong expansion in profit from multiple drivers which can continue and there is room for the company and the market to...

Daniel Tabbush

Nikkei 225 Index Rebalance: DISCO, Socionext, ZOZO In; PacMetals, Sumitomo Osaka, Takara Holding Out

The adds are all up since announcement, led by Zozo. Nitori is up too even though the upweight was knows. Two of the three deletes are lower....

Brian Freitas

Mar24 Nikkei 225 Rebal: Zozo (3092) And Other ADDs Update

The Mar24 N225 rebal has 5 days to run. So far, 3 of 4 stocks ADDed or UPweighted are up vs N225. DELETEs are down. There is a big funding sell....

Travis Lundy

Index Rebalance & ETF Flow Recap: NKY, ASX, CSI300, A50, STTF, LowVol30, Value Up

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Mar24 Nikkei 225 Rebal - Socionext, Disco, Zozo IN; US$4bn One-Way; More Impactful Than It Looks

The Nikkei 225 Rebalance for March 2024 is out. It is basically as expected. I had thought maybe Ryohin Keikaku would go in rather than Zozo. I'd...

Travis Lundy

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