IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/japan-post-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:359:1" rel="noopener">Japan Post Holdings (6178 JP)</a>/JPH has announced the offering of up to 1.1 billion shares in <a href="https://www.smartkarma.com/entities/japan-post-bank-co-ltd" target="_blank" data-smartkarma-citation="entities:838:1" rel="noopener">Japan Post Bank (7182 JP)</a>/JPB to reduce its stake from 89.00% to 59.95%.</li>
<li>JPB will carry out a ToSTNeT-3 buyback (maximum of JPY70 billion) and an on-market buyback (maximum of JPY80 billion). JPH can sell additional shares into the ToSTNeT-3 buyback.</li>
<li>For long-term investors, JPB’s forward P/B of 0.47x and yield of 4.41% are attractive to peers. JPB’s current price ratio is undemanding vs TOPIX Banks ETF and JPH.</li>
</ul>



Japan Post Holdings (6178 JP)/JPH has announced the offering of up to 1.1 billion shares in Japan Post Bank (7182 JP)/JPB to reduce its stake from 89.00% to 59.95%.
JPB will carry out a ToSTNeT-3 buyback (maximum of JPY70 billion) and an on-market buyback (maximum of JPY80 billion). JPH can sell additional shares into the ToSTNeT-3 buyback.
For long-term investors, JPB’s forward P/B of 0.47x and yield of 4.41% are attractive to peers. JPB’s current price ratio is undemanding vs TOPIX Banks ETF and JPH.


Japan Post Bank (7182 JP): Japan Post Holdings to Sell Down a Third of Its Stake

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares MSCI EAFE ETF / Technical Analysis

<ul>
<li>We continue to believe that a bearish intermediate-term outlook is appropriate as long as the YTD downtrends remain intact on MSCI ACWI (ACWI-US), MSCI ACWI ex-US (ACWX-US), and EAFE (EFA-US).</li>
<li>We would turn bullish only on reversals of those downtrends. With that said, a bear market rally has officially begun, something that we have discussed since our Sept.29 Int'l Compass</li>
<li>We expect to see rallies to their respective YTD downtrends (ACWX, EFA, etc.). We highlight buys that are likely to outperform on this bear market rally.</li>
</ul>


We continue to believe that a bearish intermediate-term outlook is appropriate as long as the YTD downtrends remain intact on MSCI ACWI (ACWI-US), MSCI ACWI ex-US (ACWX-US), and EAFE (EFA-US).
We would turn bullish only on reversals of those downtrends. With that said, a bear market rally has officially begun, something that we have discussed since our Sept.29 Int'l Compass
We expect to see rallies to their respective YTD downtrends (ACWX, EFA, etc.). We highlight buys that are likely to outperform on this bear market rally.


Bear Market Rally in Progress as DXY, Global Sovereign 10-Yr Yields Fall; Buy Ideas Within Leaders

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>As a follow-on to <a href="https://www.smartkarma.com/insights/topix-october-2022-rebal-big-names-with-big-flows" target="_blank" data-smartkarma-citation="insights:81835" rel="noopener">TOPIX October 2022 Rebal - BIG Names with BIG Flows</a> which discussed ¥2.1trln a side flows overall, this insight analyses and proposes intra-sector baskets.</li>
<li>In general, the sector-neutral BUYs vs SELLs baskets of all names where Index Shares change by 10% or more have seen BUYs sharply outperform SELLs in the past three weeks.</li>
<li>Look for pre-positioning unwinds so trading BUY vs SELL baskets which have bucked the trend, banks and chemicals - might be worthwhile. Otherwise, pick your spots. Use the flow.</li>
</ul>


As a follow-on to TOPIX October 2022 Rebal - BIG Names with BIG Flows which discussed ¥2.1trln a side flows overall, this insight analyses and proposes intra-sector baskets.
In general, the sector-neutral BUYs vs SELLs baskets of all names where Index Shares change by 10% or more have seen BUYs sharply outperform SELLs in the past three weeks.
Look for pre-positioning unwinds so trading BUY vs SELL baskets which have bucked the trend, banks and chemicals - might be worthwhile. Otherwise, pick your spots. Use the flow.


TOPIX October 2022 Rebal - Buy/Sell Baskets (May the Flow Be Ever In Your Favour)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/chukyo-bank-ltd" target="_blank" data-smartkarma-citation="entities:20132:1" rel="noopener">Chukyo Bank (8530 JP)</a> and <a href="https://www.smartkarma.com/entities/aichi-bank-ltd" target="_blank" data-smartkarma-citation="entities:15259:1" rel="noopener">Aichi Bank (8527 JP)</a> have decided to join forces to become the largest regional lender in the Nagoya area. </li>
<li>This is probably driven by MUFJ's efforts to rid itself of non-core assets, but in doing so, it is allowing for an accretive structure for minorities.</li>
<li>This ends up being a cheap bank on a slightly complicated pro-forma basis.</li>
</ul>



Chukyo Bank (8530 JP) and Aichi Bank (8527 JP) have decided to join forces to become the largest regional lender in the Nagoya area. 
This is probably driven by MUFJ's efforts to rid itself of non-core assets, but in doing so, it is allowing for an accretive structure for minorities.
This ends up being a cheap bank on a slightly complicated pro-forma basis.


Chukyo (8530) + Aichi (8527) Bank to Create Aichi Fin'l Group - Interesting Structure Adds Value

Senior Bank Analyst - Japanese Banks, Windamee Research

J. Brian Waterhouse

Senior Bank Analyst - Japanese Banks

Windamee Research

Japanese Banks

Equity Bottom-Up

Most of Japan’s 77 TSE-listed regional banking entities are expected to announce their interim results from 10-12 November this year, but <a href="https://www.smartkarma.com/entities/hachijuni-bank-ltd" target="_blank" data-smartkarma-citation="entities:20244:1" rel="noopener">Hachijuni Bank (8359 JP)</a> has once again announced its interim results well ahead of the rest.  While results comfortably beat initial guidance, there were no surprises thanks to an upward revision to guidance a week ago. Moreover, an examination of those ‘much improved’ numbers shows that the bank was once again heavily reliant on loan-loss reserve write-backs and ‘selling the family silver’ to keep profits up.The stock is currently just +3.0% higher than it was six months ago; most peers are up around +9% over the same period.  Indeed, Hachijuni Bank has been a conspicuous underperformer against the Topix Banks Index for much of CY2021.  Currently trading on a FY3/2022  PER of 8.3x and PBR of 0.21x, the stock is not especially compelling.  The bank’s woefully low RoE and RoA remain serial disincentives for investors, although some 17% of total shares outstanding continue to be held by die-hard foreigners.There are other regional bank stocks (such as <a href="https://www.smartkarma.com/entities/chiba-bank-ltd" target="_blank" data-smartkarma-citation="entities:1048:1" rel="noopener">Chiba Bank (8331 JP)</a>, <a href="https://www.smartkarma.com/entities/shizuoka-bank-ltd" target="_blank" data-smartkarma-citation="entities:4437:1" rel="noopener">Shizuoka Bank (8355 JP)</a> and <a href="https://www.smartkarma.com/entities/fukuoka-financial-group-inc" target="_blank" data-smartkarma-citation="entities:3712:1" rel="noopener">Fukuoka Financial Group (8354 JP)</a> more deserving of investor interest than this one.  For those who are not yet holders of Hachijuni Bank stock, our position is clear: Caveat emptor!  (May the buyer beware!)<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/238/644/original/8359-Hachijuni-2021-1029+8359RelvsTPNBNK.jpg?1635648829" class="editor-image img-responsive" data-smartkarma-image-id="238644"></figure></section>

Most of Japan’s 77 TSE-listed regional banking entities are expected to announce their interim results from 10-12 November this year, but Hachijuni Bank (8359 JP) has once again announced its interim results well ahead of the rest.  While results comfortably beat initial guidance, there were no surprises thanks to an upward revision to guidance a week ago. Moreover, an examination of those ‘much improved’ numbers shows that the bank was once again heavily reliant on loan-loss reserve write-backs and ‘selling the family silver’ to keep profits up.The stock is currently just +3.0% higher than it was six months ago; most peers are up around +9% over the same period.  Indeed, Hachijuni Bank has been a conspicuous underperformer against the Topix Banks Index for much of CY2021.  Currently trading on a FY3/2022  PER of 8.3x and PBR of 0.21x, the stock is not especially compelling.  The bank’s woefully low RoE and RoA remain serial disincentives for investors, although some 17% of total shares outstanding continue to be held by die-hard foreigners.There are other regional bank stocks (such as Chiba Bank (8331 JP), Shizuoka Bank (8355 JP) and Fukuoka Financial Group (8354 JP) more deserving of investor interest than this one.  For those who are not yet holders of Hachijuni Bank stock, our position is clear: Caveat emptor!  (May the buyer beware!)

Hachijuni Bank (8359 JP):  Ahead of the Peloton

Japan

The Chiba Bank, Ltd. is a regional bank based in Chiba Prefecture. The Bank offers general banking services including deposits, loans, and foreign exchange transactions. The Chiba Bank also develops software and provides financial services such as leasing, securities brokerage, letter of credit, and credit cards.

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Chiba Bank (8331 JP)

Japan Post Bank (7182 JP): Japan Post Holdings to Sell Down a Third of Its Stake

JPH aims to lower its stake by up to 59.95% of outstanding shares. JPH will buy back shares to provide partial relief from the selling pressure....

Arun George

Bear Market Rally in Progress as DXY, Global Sovereign 10-Yr Yields Fall; Buy Ideas Within Leaders

Bear Market Rally in Progress as $DXY, Global Sovereign 10-Year Yields Decline. Italy FTSE MIB with a bullish YTD downtrend reversal, Switzerland...

Vermilion Research

TOPIX October 2022 Rebal - Buy/Sell Baskets (May the Flow Be Ever In Your Favour)

This companion piece to the first October 2022 FFW Rebalance piece shows both large (>¥5bn) and small (¥1-5bn) intra-sector flows. Using the flows...

Travis Lundy

Chukyo (8530) + Aichi (8527) Bank to Create Aichi Fin'l Group - Interesting Structure Adds Value

Aichi and Chukyo Banks will merge to become top lender in Nagoya ahead of current #1 and cheap good regional Bk of Nagoya. Transaction structure is...

Travis Lundy

Hachijuni Bank (8359 JP): Ahead of the Peloton

Hachijuni Bank's interim results comfortably beat initial guidance, but there were no surprises thanks to an upward revision to earnings guidance a...

J. Brian Waterhouse

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