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

McD's Japan:  Earnings? Check. Parent Selldown OK? Check. Japanese CEO? Check TSE Prime? Unknown

TOPIX Inclusion Pre-Event for Meiko Electronics (6787)

TOPIX Inclusion Pre-Events: Recent "Tachiaigai Bunbai" Round-Up

Gravity Works As WeWork Doesn't; Now Plan B

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

In June 2020, we looked at <a href="https://www.smartkarma.com/insights/historical-topix-inclusions-what-flavor-performs-best" target="_blank" data-smartkarma-citation="insights:39523" rel="noopener">Historical TOPIX Inclusions:  What Flavor Performs Best?</a> which built and described Quiddity's Framework to identify attractive TOPIX Inclusion Trades using their Inclusion Parameters such as size and liquidity characteristics. Since then, we have utilized this framework to differentiate TOPIX Inclusion trades to provide better guidance for our readers.However, with new TSE Section Transfer Requirements being introduced this year, there is a requirement for this framework to be upgraded and as a starting point, this insight will address one of the main shortcomings of our existing framework - accounting for the impact of equity offerings. We have done so on an ad hoc basis, but we had not done quantitative work on the differences.Many Japanese stocks which earn TSE1 promotion end up launching equity offerings to increase their float, liquidity, and/or shareholder counts to satisfy the Section Transfer Requirements. Such offerings often have a significant impact on the stocks' performance in the run up to their TOPIX Inclusion Events and have important implications for investors who want to take part in the trade. In this insight, we take a look at how to deal with the impact of these equity offerings by analysing precedents from the last 12 months.

In June 2020, we looked at Historical TOPIX Inclusions:  What Flavor Performs Best? which built and described Quiddity's Framework to identify attractive TOPIX Inclusion Trades using their Inclusion Parameters such as size and liquidity characteristics. Since then, we have utilized this framework to differentiate TOPIX Inclusion trades to provide better guidance for our readers.However, with new TSE Section Transfer Requirements being introduced this year, there is a requirement for this framework to be upgraded and as a starting point, this insight will address one of the main shortcomings of our existing framework - accounting for the impact of equity offerings. We have done so on an ad hoc basis, but we had not done quantitative work on the differences.Many Japanese stocks which earn TSE1 promotion end up launching equity offerings to increase their float, liquidity, and/or shareholder counts to satisfy the Section Transfer Requirements. Such offerings often have a significant impact on the stocks' performance in the run up to their TOPIX Inclusion Events and have important implications for investors who want to take part in the trade. In this insight, we take a look at how to deal with the impact of these equity offerings by analysing precedents from the last 12 months. 

TOPIX Inclusions: How to Account for The Impact of Equity Offerings

Toshiba Corp

TOPIX Inclusions: How to Account for The Impact of Equity Offerings