Speculation about the identity of Nanoco’s new joint venture partner in Asia is behind its recent share price strength. All that Nanoco (NANO) will say is that it is a “major electronics company in Asia” which plans to use its cadmium-free quantum dots in its electronic display products.

But has anyone given any thought as to why Mitsubishi UFJ Capital (MUCAP), the vc arm of Japan's biggest bank, has recently disposed of its 5.9% stake in NANO? According to recent RNS statements MUCAP’s 11.8m shares appear to have been taken up by Baillie Gifford and the Universities Superannuation fund. which have increased their stakes to 12.3% and 7.2%, respectively.

MUCAP invested in NANO in April 2007, and has probably made a tidy profit. When it came on board it offered its “excellent contacts book” to help NANO strengthen its Asian-based businesses. MUCAP's backing, ahead of NANO's 2009 AIM flotation, was felt to be crucial in helping the Manchester-based company send out a strong message to potential customers, that it was "reliable, trustworthy and in Asia for the long haul".

MUCAP’s departure may just reflect NANO’s changed priorities. Kisco, a leading Asian electronics materials trading company, which bought 6m NANO shares in July 2009, retains a 3.7% stake and is the exclusive Asian distributor for NANO’s quantum dot technology.

Perhaps NANO has grown to a size that it no longer needs two Japanese partners. Perhaps there are growing conflicts of interest. Perhaps MUCAP feels that NANO no longer has a competitive edge.

Given the huge importance of the Asian markets to NANO, would be interested whether anyone has any thoughts on whether MUCAP's departure from NANO's share register is good/bad news or irrelevant.

http://www.iii.co.uk/investment/detail?code=cotn:NANO.L&it=le

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