In today’s briefing:
- Nikkei 225 March 2023 Review Quiddity Leaderboard
- Initial Thoughts on the Porsche IPO
- Selected European Holdcos and DLCs: August ‘22 Report
- DAX, MDAX, SDAX, TecDAX Sep 2022 Rebal: Large Impacts Only for Hella & Stabilius
- Director Compensation Should Be Changed from Stable Compensation to More Variable Compensation
Nikkei 225 March 2023 Review Quiddity Leaderboard
- The Sep 2022 Nikkei 225 Annual Review has been announced. This was discussed in Nikkei 225 Review Results: Nidec, SMC, Hoya IN.
- That means we can make early predictions for the March 2023 rebalance to be announced in six months. One way turnover would be about 1.4%.
- The top three adds are Oriental Land, Renesas, and JAL. The top 3 sells would be Toyobo, Toho Zinc, and Nippon Sheet Glass. There are some dark horses here too.
Initial Thoughts on the Porsche IPO
- Porsche is getting ready for an IPO to be completed by the end of this year. However, the final decision on the IPO is still subject to market conditions.
- The expected valuation of the Porsche IPO is 60 billion to 85 billion euros ($60 billion to $85 billion).
- Qatar Investment Authority has already committed to a 4.99% stake in the Porsche IPO.
Selected European Holdcos and DLCs: August ‘22 Report
- Discounts to NAV of covered holdcos have mainly widened or stayed at the same level during August/beginning of September, in line with the loses in the main indexes.
- Discounts to NAV (5 September): Alba, 46.1%; GBL, 34.1%; Heineken Holdings 21.3%; Industrivärden C, 10.1%; Investor B, 18.9%; Porsche Automobile Holding 29.4%. The spread of Rio Tinto DLC tightened to 14.5%.
- Spreads tend to widen in bear markets but short-term recoveries provide opportunities on tightening discounts. Recommended trades are: Industrivärden C vs. listed assets, Porsche, Rio Tinto (DLC).
DAX, MDAX, SDAX, TecDAX Sep 2022 Rebal: Large Impacts Only for Hella & Stabilius
- The September 2022 index changes for DAX, MDAX, SDAX, and TecDAX were announced late last night.
- There is one change for the DAX Index, four changes for the MDAX Index, seven changes for the SDAX Index, and two changes for the TecDAX Index.
- In this insight, we take a closer look at our expectations for index flows and potential trading ideas.
Director Compensation Should Be Changed from Stable Compensation to More Variable Compensation
- The reason for high remuneration of foreign directors isn’t only that remuneration is determined based on overseas compensation levels, but also that fixed remuneration for directors in Japan is high.
- It is hoped that more companies will increase the proportion of variable compensation, and that for shareholders, performance will increase enough to significantly increase variable compensation.
- In order for directors to fulfill their responsibilities in determining important strategies, the system must be designed to be high-risk and high-return as well as individually disclosed.
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