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>The review period for the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY)</a> September rebalance ended yesterday. There should be three index changes, potential stepwise inclusion, no <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing</a> capping and a big funding trade.</li>
<li>There appears to be decent positioning on the potential adds, while it is the close adds that are spiking along with a big increase in traded volumes.</li>
<li>If the three changes are on expected lines, estimated one-way turnover at the rebalance is 2.01% resulting in a one-way trade of JPY 461bn (US$3.24bn). </li>
</ul>


The review period for the Nikkei 225 (NKY) September rebalance ended yesterday. There should be three index changes, potential stepwise inclusion, no Fast Retailing capping and a big funding trade.
There appears to be decent positioning on the potential adds, while it is the close adds that are spiking along with a big increase in traded volumes.
If the three changes are on expected lines, estimated one-way turnover at the rebalance is 2.01% resulting in a one-way trade of JPY 461bn (US$3.24bn). 


Nikkei 225 Index Rebalance Preview (Sep 2023): Final Look as Review Period Ends

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/terumo-corp" target="_blank" data-smartkarma-citation="entities:6708:1" rel="noopener">Terumo Corp (4543 JP)</a> recorded highest ever revenue and operating profit in FY23, driven by continued strong growth in C&amp;V business globally, particularly the largest U.S. market.</li>
<li>C&amp;V business should continue to be the primary driver of Terumo’s growth in FY24 also. The company has guided for C&amp;V revenue of ¥504B in FY24, up 5% YoY.</li>
<li>Terumo aims to grow profit by double-digit percentage in FY24 and improve profitability through expansion of high-margin products, more assertive pricing policies, and cost reduction measures centered on manufacturing cost.</li>
</ul>



Terumo Corp (4543 JP) recorded highest ever revenue and operating profit in FY23, driven by continued strong growth in C&amp;V business globally, particularly the largest U.S. market.
C&amp;V business should continue to be the primary driver of Terumo’s growth in FY24 also. The company has guided for C&amp;V revenue of ¥504B in FY24, up 5% YoY.
Terumo aims to grow profit by double-digit percentage in FY24 and improve profitability through expansion of high-margin products, more assertive pricing policies, and cost reduction measures centered on manufacturing cost.


Terumo Corp (4543 JP): Strong C&V Business Momentum Continues; Profitability to Improve in FY24

<ul>
<li>
<a href="https://www.smartkarma.com/entities/eisai-co-ltd" target="_blank" data-smartkarma-citation="entities:21001:1" rel="noopener">Eisai Co Ltd (4523 JP)</a> is expected to receive full approval from the FDA for Alzheimer’s disease drug, Leqembi, as FDA advisory committee voted unanimously in support of the drug.  </li>
<li>Leqembi application has been granted Priority Review, with PDUFA action date of July 6. Once the FDA grants traditional approval, broader Medicare coverage for Leqembi would begin the same day.</li>
<li>Leqembi is expected to receive approval in Japan, EU, and China in FY24. With these approvals, Leqembi is expected to become the top selling Alzheimer’s disease drug globally.</li>
</ul>



Eisai Co Ltd (4523 JP) is expected to receive full approval from the FDA for Alzheimer’s disease drug, Leqembi, as FDA advisory committee voted unanimously in support of the drug.  
Leqembi application has been granted Priority Review, with PDUFA action date of July 6. Once the FDA grants traditional approval, broader Medicare coverage for Leqembi would begin the same day.
Leqembi is expected to receive approval in Japan, EU, and China in FY24. With these approvals, Leqembi is expected to become the top selling Alzheimer’s disease drug globally.


Eisai Co (4523 JP): Alzheimer’s Drug Approaching Full FDA Approval; Other Countries to Follow Soon

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Back on the 25 May, healthcare company <strong><a href="https://www.smartkarma.com/entities/medtronic-plc" target="_blank" data-smartkarma-citation="entities:14982:1" rel="noopener">Medtronic Plc (MDT US)</a></strong> <a href="https://news.medtronic.com/2023-05-25-Medtronic-to-acquire-wearable-insulin-patch-maker-EOFlow" target="_blank" rel="noopener">announced</a> it had entered into a set of definitive agreements to acquire <strong><a href="https://www.smartkarma.com/entities/eoflow-co-ltd" target="_blank" data-smartkarma-citation="entities:36100:1" rel="noopener">EOFlow (294090 KS)</a></strong>.</li>
<li>Via a three-step process - SPAs, issuance of new shares, and a Tender Offer - Medtronic will seek majority control, together with a view to delisting EOFlow.</li>
<li>Completion is expected in 4Q23. Regulatory approvals -  domestic and foreign - form part of the conditions. Trading wide to terms. </li>
</ul>


Back on the 25 May, healthcare company Medtronic Plc (MDT US) announced it had entered into a set of definitive agreements to acquire EOFlow (294090 KS).
Via a three-step process - SPAs, issuance of new shares, and a Tender Offer - Medtronic will seek majority control, together with a view to delisting EOFlow.
Completion is expected in 4Q23. Regulatory approvals -  domestic and foreign - form part of the conditions. Trading wide to terms. 


Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/fujifilm-holdings-corp" target="_blank" data-smartkarma-citation="entities:16353:1" rel="noopener"></a>Fujifilm delivered its 4Q and full-year FY03/2023 results today. Revenue and OP increased 15.0% and 63.2% YoY to ¥764.7bn (vs consensus ¥715.7bn) and ¥70.4bn (vs consensus ¥62.5bn) respectively.</li>
<li>The company’s full-year revenue and OP were above its own guidance as well as consensus, and we think <a href="https://www.smartkarma.com/entities/fujifilm-holdings-corp" target="_blank" data-smartkarma-citation="entities:16353:1" rel="noopener">FUJIFILM Holdings (4901 JP)</a> ’s guidance for FY03/2024E is too conservative.</li>
<li>The market continues to value Fujifilm as an imaging company and not in line with healthcare peers suggesting there is significant upside to the current valuation multiples.</li>
</ul>



Fujifilm delivered its 4Q and full-year FY03/2023 results today. Revenue and OP increased 15.0% and 63.2% YoY to ¥764.7bn (vs consensus ¥715.7bn) and ¥70.4bn (vs consensus ¥62.5bn) respectively.
The company’s full-year revenue and OP were above its own guidance as well as consensus, and we think FUJIFILM Holdings (4901 JP) ’s guidance for FY03/2024E is too conservative.
The market continues to value Fujifilm as an imaging company and not in line with healthcare peers suggesting there is significant upside to the current valuation multiples.


Fujifilm FQ4: Strong Earnings Beat and There's Further Upside

Japan

Terumo Corporation is a manufacturer and supplier of pharmaceuticals and medical tools and equipment. The Company's products include health foods, transfusion and infusion equipment, disposable medical supply, clinical testing systems, artificial organs, and electronic thermometers. Terumo markets the products through its subsidiaries and sales offices in the US, Europe, and Asia.

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Terumo (4543 JT)

Nikkei 225 Index Rebalance Preview (Sep 2023): Final Look as Review Period Ends

The review period for the NKY Sep rebal ended yesterday. There should be 3 index changes, potential stepwise inclusion, no Fast Retailing capping...

Brian Freitas

Terumo Corp (4543 JP): Strong C&V Business Momentum Continues; Profitability to Improve in FY24

After reporting 20%+ revenue growth in two consecutive years, Terumo’s C&V business targets 5% revenue growth in FY24. Terumo’s operating profit...

Tina Banerjee

Eisai Co (4523 JP): Alzheimer’s Drug Approaching Full FDA Approval; Other Countries to Follow Soon

The PDUFA action date for traditional approval of Leqembi for the treatment of Alzheimer’s disease has been set for July 6. Leqembi is expected to...

Tina Banerjee

Medtronic's Delisting Offer For EOFlow

EOFlow looks attractive at a gross/annualised spread of 6.2%/17.6%, assuming payment mid-October. To note, the tender offer price may still be...

David Blennerhassett

Fujifilm FQ4: Strong Earnings Beat and There's Further Upside

Fujifilm's FQ4 earnings beat consensus by a huge margin. Market continues to value Fujifilm as an imaging services stock and not as a healthcare...

Shifara Samsudeen, ACMA, CGMA

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