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

Rakuten Securities / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rakuten-securities-inc" target="_blank" data-smartkarma-citation="entities:39933:1" rel="noopener">Rakuten Securities (RAKUSEC JP)</a>, a leading Japanese online brokerage, seeks to raise US$500 million. <a href="https://www.smartkarma.com/entities/rakuten-group-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Group (4755 JP)</a> (80.01%) and <a href="https://www.smartkarma.com/entities/mizuho-financial-group-inc" target="_blank" data-smartkarma-citation="entities:219:1" rel="noopener">Mizuho Financial Group (8411 JP)</a> (19.99%) are its shareholders.  </li>
<li>In <strong><em><a href="https://www.smartkarma.com/insights/rakuten-securities-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:108460" rel="noopener">Rakuten Securities IPO: The Bull Case</a></em></strong>, we highlighted the key elements of the bull case. In this note, we outline the bear case.</li>
<li>The key elements of the bear case rest on rapidly slowing operating revenue and commissions growth, lowest per-account monetisation rates vs peers and mid-tier profitability. </li>
</ul>



Rakuten Securities (RAKUSEC JP), a leading Japanese online brokerage, seeks to raise US$500 million. Rakuten Group (4755 JP) (80.01%) and Mizuho Financial Group (8411 JP) (19.99%) are its shareholders.  
In Rakuten Securities IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The key elements of the bear case rest on rapidly slowing operating revenue and commissions growth, lowest per-account monetisation rates vs peers and mid-tier profitability. 


<ul>
<li>
<a href="https://www.smartkarma.com/entities/rakuten-securities-inc" target="_blank" data-smartkarma-citation="entities:39933:1" rel="noopener">Rakuten Securities (RAKUSEC JP)</a>, a leading Japanese online brokerage, seeks to raise US$500 million. <a href="https://www.smartkarma.com/entities/rakuten-bank-ltd" target="_blank" data-smartkarma-citation="entities:35638:1" rel="noopener">Rakuten Bank (5838 JP)</a> (80.01%) and <a href="https://www.smartkarma.com/entities/mizuho-financial-group-inc" target="_blank" data-smartkarma-citation="entities:219:1" rel="noopener">Mizuho Financial Group (8411 JP)</a> (19.99%) are its shareholders.   </li>
<li>Rakuten Securities has grown its business by pursuing a low-cost, high-volume strategy. It has the largest number of non-consolidated securities accounts among Japanese securities companies.</li>
<li>The key elements of the bull case rest on rapid customer growth, low-cost fees, market share gains, synergies with the Rakuten ecosystem and improving profitability trends.</li>
</ul>



Rakuten Securities (RAKUSEC JP), a leading Japanese online brokerage, seeks to raise US$500 million. Rakuten Bank (5838 JP) (80.01%) and Mizuho Financial Group (8411 JP) (19.99%) are its shareholders.   
Rakuten Securities has grown its business by pursuing a low-cost, high-volume strategy. It has the largest number of non-consolidated securities accounts among Japanese securities companies.
The key elements of the bull case rest on rapid customer growth, low-cost fees, market share gains, synergies with the Rakuten ecosystem and improving profitability trends.


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

EURO STOXX 50 Price EUR / Technical Analysis

<ul>
<li>It appears the recent pullback is over, and we could see the MSCI ACWI (ACWI-US) test YTD highs at $93. We still expect $93 to cap upside in 2023.</li>
<li>Overweight Europe/UK and non-U.S., we are buyers on pullbacks as long as FTSE 100 is above 7700, STOXX Europe 50 is above 3800, and EURO STOXX 50 is above 4000.</li>
<li>As long as these support levels are holding, we are constructive from a price perspective</li>
</ul>


It appears the recent pullback is over, and we could see the MSCI ACWI (ACWI-US) test YTD highs at $93. We still expect $93 to cap upside in 2023.
Overweight Europe/UK and non-U.S., we are buyers on pullbacks as long as FTSE 100 is above 7700, STOXX Europe 50 is above 3800, and EURO STOXX 50 is above 4000.
As long as these support levels are holding, we are constructive from a price perspective


Remain Overweight Europe/UK & Non-US Equities; Pullback Over?; Buys in Industrials and Financials

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

NTT (Nippon Telegraph & Telephone) / Event-Driven

<ul>
<li>The last of the three-leg rebalance for TOPIX and JPNK400 index weights takes place Wednesday 29 June at the close. This one is a bit larger than expected in April.</li>
<li>There were a large number of cancellations of shares by TSE Prime members in May which ups the predicted value to be traded. </li>
<li>Interestingly, because lots of names have seen share cancellations and FFW drops, the average passive ownership of TSE Float (not other providers' float) has gone up significantly through this process. </li>
</ul>


The last of the three-leg rebalance for TOPIX and JPNK400 index weights takes place Wednesday 29 June at the close. This one is a bit larger than expected in April.
There were a large number of cancellations of shares by TSE Prime members in May which ups the predicted value to be traded. 
Interestingly, because lots of names have seen share cancellations and FFW drops, the average passive ownership of TSE Float (not other providers' float) has gone up significantly through this process. 


Last Leg of TOPIX and JPNK400 FFW Rebal - ¥780bn One-Way Flow Wednesday

<ul>
<li>Commodities (ex. precious metals) and global yields are on the rise as the US dollar (DXY) deteriorates. Additionally, EM equities (EEM-US) display a bullish RS reversal relative to MSCI ACWI. </li>
<li>These are all important risk-on signals for global equities that continue to support our neutral yet constructive outlook. We expect more consolidation and mixed markets ahead.</li>
<li>Two Sectors that stand to benefit most from rising rates include Energy and Financials. We recommend adding exposure to these Sectors as we see a shift in favor of value.</li>
</ul>


Commodities (ex. precious metals) and global yields are on the rise as the US dollar (DXY) deteriorates. Additionally, EM equities (EEM-US) display a bullish RS reversal relative to MSCI ACWI. 
These are all important risk-on signals for global equities that continue to support our neutral yet constructive outlook. We expect more consolidation and mixed markets ahead.
Two Sectors that stand to benefit most from rising rates include Energy and Financials. We recommend adding exposure to these Sectors as we see a shift in favor of value.


Value Sectors Take The Lead On Rising Global Yields; Buying Energy and Financials

Japan

Daiwa Securities Group Inc. is a holding company. The Group provides a comprehensive financial services including dealing, brokerage, underwriting, and distribution of securities.  Other services are research & systems development, custody service, and asset management. Daiwa has subsidiaries in US, Europe, Asia, and Middle East.

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Daiwa Securities Group (8601 JP)

Rakuten Securities IPO: The Bear Case

The key elements of the bear case rest on rapidly slowing operating revenue and commissions growth, lowest per-account monetisation rates vs peers...

Arun George

Rakuten Securities IPO: The Bull Case

The key elements of the bull case rest on rapid customer growth, low-cost fees, market share gains, synergies with the Rakuten ecosystem and...

Arun George

Remain Overweight Europe/UK & Non-US Equities; Pullback Over?; Buys in Industrials and Financials

Remain overweight Europe/UK and non-US equities; we are buyers on pullbacks as long as the FTSE 100 is above 7700, the STOXX Europe 50 is above...

Vermilion Research

Last Leg of TOPIX and JPNK400 FFW Rebal - ¥780bn One-Way Flow Wednesday

There are 2+ days until the last stage of the TSE FFW Rebalance is done. This time sees more changes because of increased share cancellation in...

Travis Lundy

Value Sectors Take The Lead On Rising Global Yields; Buying Energy and Financials

Two Sectors that stand to benefit most from rising rates include Energy and Financials. We recommend adding exposure to these Sectors as we see a...

Vermilion Research

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