Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Equity Analyst with experience in fundamental and event-driven research in Frontier and Emerging markets. 

On Smartkarma, I mainly publish insights on index flow events in the Asia-Pacific region. This includes predicting regular and intra-review index changes and estimating upcoming passive flows. I also cover special situations such as mergers & acquisitions, equity offerings, buybacks, and other corporate restructuring events.

Pan-Asia Index Flows & Special Situations

TOPIX Inclusion Pre-Events: Recent “Tachiaigai Bunbai” Round-Up (October 2020) - Two Stocks To Buy

Historical TOPIX Inclusions:  What Flavor Performs Best?

TOPIX Inclusions:  New Regulations! Who Is READY? 2.0

TOPIX Inclusion (4251 JP): KEIWA Incorporated

TOPIX Inclusion (4931 JP): Shinnihonseiyaku

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

TSE2-listed software company <a href="https://www.smartkarma.com/entities/base-co-ltd" target="_blank" data-smartkarma-citation="entities:29159:1" rel="noopener">Base Co Ltd (4481 JP)</a> has been a closely-watched TOPIX Inclusion Candidate in recent months. Having retained this stock in Quiddity's Pre-events watchlist for around 3 months, in October 2020, I took a bullish view on <a href="https://www.smartkarma.com/entities/base-co-ltd" target="_blank" data-smartkarma-citation="entities:29159:1" rel="noopener">Base Co Ltd (4481 JP)</a> as I discussed in <a href="https://www.smartkarma.com/insights/topix-inclusion-pre-events-recent-tachiaigai-bunbai-round-up-october-2020-two-stocks-to-buy" target="_blank" data-smartkarma-citation="insights:43984" rel="noopener">TOPIX Inclusion Pre-Events: Recent “Tachiaigai Bunbai” Round-Up (October 2020) - Two Stocks To Buy</a> despite pointing out some warnings on possible overheating against peers. Disappointingly, the stock declined sharply in the following few weeks. In late-November, after adjusting for the impact of their pre-event equity offerings, I picked  <a href="https://www.smartkarma.com/entities/base-co-ltd" target="_blank" data-smartkarma-citation="entities:29159:1" rel="noopener">Base Co Ltd (4481 JP)</a> to be one of our eight picks in <a href="https://www.smartkarma.com/insights/topix-inclusions-new-regulations-who-is-ready-2-0" target="_blank" data-smartkarma-citation="insights:45783" rel="noopener">TOPIX Inclusions:  New Regulations! Who Is READY? 2.0</a> where I discussed a screening process to identify stocks with high likelihood of TSE1 promotion as shown in the extract below. <blockquote><ul style="list-style-type: circle;"><li>
Other Pick 3: <a href="https://www.smartkarma.com/entities/base-co-ltd" target="_blank" data-smartkarma-citation="entities:29159:1" rel="noopener">Base Co Ltd (4481 JP)</a> : This case was previously covered in <a href="https://www.smartkarma.com/insights/topix-inclusion-pre-events-recent-tachiaigai-bunbai-round-up-october-2020-two-stocks-to-buy" target="_blank" data-smartkarma-citation="insights:43984" rel="noopener">TOPIX Inclusion Pre-Events: Recent “Tachiaigai Bunbai” Round-Up (October 2020) - Two Stocks To Buy</a>. According to this analysis, their shareholder count and free float percentage are not high enough to meet OLD requirements but after adjusting for their recent tachiaigai bunbai offering, I am confident they should be fine. Waiting period ends on 15th December 2020.  
</li></ul></blockquote>Today after market close, <a href="https://www.smartkarma.com/entities/base-co-ltd" target="_blank" data-smartkarma-citation="entities:29159:1" rel="noopener">Base Co Ltd (4481 JP)</a> announced (<a href="https://ssl4.eir-parts.net/doc/4481/tdnet/1911877/00.pdf" target="_blank" rel="noopener">J-only</a>) they had received approval to move from the Second Section to the First Section of the Tokyo Stock Exchange as of 16th December 2020 - the first trading day after the end of the above-mentioned 1-year post-IPO waiting period. TSE1 reassignment triggers inclusion into the TOPIX Index and the Inclusion Event can be expected to be at the close of trading 28th January 2021. <a href="https://www.smartkarma.com/entities/base-co-ltd" target="_blank" data-smartkarma-citation="entities:29159:1" rel="noopener">Base Co Ltd (4481 JP)</a> engages in outsourced software development services in Japan. The company hires recent graduates and mid-career software engineers and deploys them to provide various systems integration services for clients including system development, ERP solutions, ICT solutions, and operation/maintenance services. They mainly focus on system development for the financial industry (i.e. securities companies), manufacturing industry, and logistics industry. In this insight, we take a look at the Index Inclusion Parameters and the Fundamentals of the company to evaluate the upside potential of the TOPIX Inclusion Event.

TSE2-listed software company Base Co Ltd (4481 JP) has been a closely-watched TOPIX Inclusion Candidate in recent months. Having retained this stock in Quiddity's Pre-events watchlist for around 3 months, in October 2020, I took a bullish view on Base Co Ltd (4481 JP) as I discussed in TOPIX Inclusion Pre-Events: Recent “Tachiaigai Bunbai” Round-Up (October 2020) - Two Stocks To Buy despite pointing out some warnings on possible overheating against peers. Disappointingly, the stock declined sharply in the following few weeks. In late-November, after adjusting for the impact of their pre-event equity offerings, I picked  Base Co Ltd (4481 JP) to be one of our eight picks in TOPIX Inclusions:  New Regulations! Who Is READY? 2.0 where I discussed a screening process to identify stocks with high likelihood of TSE1 promotion as shown in the extract below. 
Other Pick 3: Base Co Ltd (4481 JP) : This case was previously covered in TOPIX Inclusion Pre-Events: Recent “Tachiaigai Bunbai” Round-Up (October 2020) - Two Stocks To Buy. According to this analysis, their shareholder count and free float percentage are not high enough to meet OLD requirements but after adjusting for their recent tachiaigai bunbai offering, I am confident they should be fine. Waiting period ends on 15th December 2020.  
Today after market close, Base Co Ltd (4481 JP) announced (J-only) they had received approval to move from the Second Section to the First Section of the Tokyo Stock Exchange as of 16th December 2020 - the first trading day after the end of the above-mentioned 1-year post-IPO waiting period. TSE1 reassignment triggers inclusion into the TOPIX Index and the Inclusion Event can be expected to be at the close of trading 28th January 2021. Base Co Ltd (4481 JP) engages in outsourced software development services in Japan. The company hires recent graduates and mid-career software engineers and deploys them to provide various systems integration services for clients including system development, ERP solutions, ICT solutions, and operation/maintenance services. They mainly focus on system development for the financial industry (i.e. securities companies), manufacturing industry, and logistics industry. In this insight, we take a look at the Index Inclusion Parameters and the Fundamentals of the company to evaluate the upside potential of the TOPIX Inclusion Event. 

Base Co Ltd

TOPIX Inclusion (4481 JP): Base Co Ltd