Daily Brief Japan: Lasertec Corp, Toshiba Corp, Tokyo Stock Exchange Tokyo Price Index Topix and more

In today’s briefing:

Sep 2023 Nikkei 225 Review – Not An Easy Rebal 🤨
Last Week in Event SPACE: Toshiba, Hongkong Land, Inpex, L’Occitane
Amid Slow ROE Improvement, Calls for Stronger Shareholder Returns Will Become Even Stronger

Sep 2023 Nikkei 225 Review – Not An Easy Rebal 🤨

The data for the Nikkei 225 Rebalance is cemented as of 31 July 2023. Lasertec Corp (6920 JP) looks like a shoo-in. The DELETEs are obvious too.
Fast Retailing (9983 JP) doesn’t get a cap (yet). But the other ADDs are a real question. It is a matter of interpreting the methodology and qualitative aspects. And FLOAT.
One way, Socionext (6526) and Mercari (4385) are ADDs. Another way, it looks like Nitori Holdings (9843) and ZOZO Inc (3092) or Ryohin Keikaku (7453). FLOAT IS A PROBLEM ANYWAY.

The JIP TOB for Toshiba (6502 JP) is here. Finally. It’s still too low. Since the announcement, when it was too low, peers are up a lot, and memory looks healthier.
Hongkong Land (HKL SP) selling Three Exchange Square sounds purely speculative. At best. But it would have a bigly impact on Hong Kong Office sentiment if true.
Inpex (1605 JP) reported 1H results, a change in forecasts, and a bigly buyback. The mechanics are the same. The impact is a bit different, but it’s worth looking at.

Modest profit growth and slow ROE growth are expected this year, and sustained TOPIX appreciation in the future will depend on increases in ROE and ROE+DOE.
Lower OP Margin is the reason for the lack of ROE growth in FY3/2023. OP Margin and ROE are expected to have difficulty rebounding from this year’s profit forecast.
Looking at the results of DOE, Total Dividends Paid and Dividend Payout for FY3/2023, which have not improved, there is still a lot of room for shareholder returns.

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