Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

HK Type 4 license through Ballingal Investment Advisors Ltd. ("BIA" or "BIAL")

BACKGROUND
I have 20+yrs experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies with most of that time spent managing money. 

4 years in fixed income macro, 8 years running internal hedge fund and 4yrs investment banking at Citi in Japan, 3 years running an Asia multi-strat portfolio at a hedge fund, 4+yrs as an independent special situations analyst.

Pan-Asia Catalysts/Events

Resona (8308 JP) BUYBACK - Respectably Large But Looks Like A One-Off

Quiddity Advisors

Equity Bottom-Up

Mebuki Financial Group / Equity Bottom-Up

Yesterday, <a href="https://www.smartkarma.com/entities/resona-holdings-inc" target="_blank" data-smartkarma-citation="entities:6841:1" rel="noopener">Resona Holdings (8308 JP)</a> announced a buyback of 2+% of shares out, in what looked like a buyback from existing cross-holders who wished to sell a large block without friction. Having offered to buy 70mm shares as discussed in <a href="https://www.smartkarma.com/insights/resona-8308-jp-buyback-respectably-large-but-looks-like-a-one-off" target="_blank" data-smartkarma-citation="insights:51331" rel="noopener">Resona (8308 JP) BUYBACK - Respectably Large But Looks Like A One-Off</a>, they bought back 62.5mm shares this AM, and they have another 25.5mm shares to buy back - roughly 2.5 days of ADV - in the next 4.5 months. That was a one-off by Resona which was "known" since last November as a mitigant against EPS dilution which would come as a result of share issuance to absorb Kansai Mirai Financial. The NEW News today is that <a href="https://www.smartkarma.com/entities/mebuki-financial-group-inc" target="_blank" data-smartkarma-citation="entities:10048:1" rel="noopener">Mebuki Financial Group (7167 JP)</a> which was formed after Joyo Bank absorbed Ashikaga Bank today announced <a href="https://www.mebuki-fg.co.jp/eng/pdf/release/20210512.pdf" target="_blank" rel="noopener">earnings</a> which were about 3% better than consensus, and forecasts for 2022 which appear about 2% lower than consensus expects for March 2022, but they also <a href="https://www.mebuki-fg.co.jp/eng/pdf/release/20210512_02.pdf" target="_blank" rel="noopener">announced a buyback</a> of up to 60 million shares spending up to ¥16bn. That is 5.17% of shares out. That is non-negligible and will bring the EPS forecast back above consensus even if pre-tax is just below. They get that started by launching a ToSTNeT-3 buyback tomorrow morning pre-open for the same 60 million shares. THAT is "implied news." It is something investors should understand, and use as a signal. There will be more of this and as a trend it is unmitigated good news for investors in Japan Inc.

Yesterday, Resona Holdings (8308 JP) announced a buyback of 2+% of shares out, in what looked like a buyback from existing cross-holders who wished to sell a large block without friction. Having offered to buy 70mm shares as discussed in Resona (8308 JP) BUYBACK - Respectably Large But Looks Like A One-Off, they bought back 62.5mm shares this AM, and they have another 25.5mm shares to buy back - roughly 2.5 days of ADV - in the next 4.5 months. That was a one-off by Resona which was "known" since last November as a mitigant against EPS dilution which would come as a result of share issuance to absorb Kansai Mirai Financial. The NEW News today is that Mebuki Financial Group (7167 JP) which was formed after Joyo Bank absorbed Ashikaga Bank today announced earnings which were about 3% better than consensus, and forecasts for 2022 which appear about 2% lower than consensus expects for March 2022, but they also announced a buyback of up to 60 million shares spending up to ¥16bn. That is 5.17% of shares out. That is non-negligible and will bring the EPS forecast back above consensus even if pre-tax is just below. They get that started by launching a ToSTNeT-3 buyback tomorrow morning pre-open for the same 60 million shares. THAT is "implied news." It is something investors should understand, and use as a signal. There will be more of this and as a trend it is unmitigated good news for investors in Japan Inc.

Mebuki Follows Resona - Bank Buyback Season Starts Strong And This Is A Good Sign