Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS.  SPX +1.2% but all Action in Tech as SOX +5.5%; Barclay Sector upgrade spurs Semis; Fed Hikes in the rear view for now; Watch Copper - supply risks+China demand</li>
<li>JAPAN. NKY Futs +0.9% vs Cash; USDJPY 130.65; Where US goes, Japan will follow: All about Tech; Kishida speech: Nuclear Power, Defense, Child support in focus; Wage hikes gather steam. </li>
<li>DAILY NUGGET. Davos  on board with the coming of the Metaverse. We highlight this and think there are near term challenges. </li>
</ul>


OVERSEAS.  SPX +1.2% but all Action in Tech as SOX +5.5%; Barclay Sector upgrade spurs Semis; Fed Hikes in the rear view for now; Watch Copper - supply risks+China demand
JAPAN. NKY Futs +0.9% vs Cash; USDJPY 130.65; Where US goes, Japan will follow: All about Tech; Kishida speech: Nuclear Power, Defense, Child support in focus; Wage hikes gather steam. 
DAILY NUGGET. Davos  on board with the coming of the Metaverse. We highlight this and think there are near term challenges. 


Good Morning Japan |THE SQUEEZE - Just Buy Tech; US Broker U/G to Semi Spurs Rally; Watch Copper

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Quantitative Analysis

<div><p>JPX-Nikkei 400 is composed of common stocks listed in the First Section, Second Section, MOTHERS Market, and the JASDAQ Market of the Tokyo Stock Exchange (and JPX). This is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents selected based on several factors including market capitalization, trading value, operating profits, and ROE.</p></div><div><p>A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. This review will be conducted using the final business day of June as the base date. </p></div><div><p>Quiddity provides quantitative research on pre-event basket strategies surrounding this Index Rebalance event and others. Below is a discussion on the latest adjustments required for the basket portfolio for the 2021 Rebalance based on June-end data. </p></div>

JPX-Nikkei 400 is composed of common stocks listed in the First Section, Second Section, MOTHERS Market, and the JASDAQ Market of the Tokyo Stock Exchange (and JPX). This is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents selected based on several factors including market capitalization, trading value, operating profits, and ROE.A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. This review will be conducted using the final business day of June as the base date. Quiddity provides quantitative research on pre-event basket strategies surrounding this Index Rebalance event and others. Below is a discussion on the latest adjustments required for the basket portfolio for the 2021 Rebalance based on June-end data. 

JPX-Nikkei 400 Rebalance 2021: Pre-Event Basket Adjustments for June-End

Event-Driven

<div><p>JPX-Nikkei 400 is composed of common stocks listed in the First Section, Second Section, MOTHERS Market, and the JASDAQ Market of the Tokyo Stock Exchange. This is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents that are selected based on several factors including market capitalization, trading value, operating profits, and ROE.</p></div><div><p>A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. This review will be conducted using the final business day of June as the base date. </p></div><div><p>Quiddity provides quantitative research on pre-event basket strategies surrounding this Index Rebalance event and others. Below is a discussion on the latest adjustments required for the basket portfolio for the 2021 Rebalance based on May-end data. </p></div>

JPX-Nikkei 400 is composed of common stocks listed in the First Section, Second Section, MOTHERS Market, and the JASDAQ Market of the Tokyo Stock Exchange. This is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents that are selected based on several factors including market capitalization, trading value, operating profits, and ROE.A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. This review will be conducted using the final business day of June as the base date. Quiddity provides quantitative research on pre-event basket strategies surrounding this Index Rebalance event and others. Below is a discussion on the latest adjustments required for the basket portfolio for the 2021 Rebalance based on May-end data. 

JPX-Nikkei 400 Rebalance 2021: Pre-Event Basket Adjustments for May-End

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-health-international-inc" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a> and <a href="https://www.smartkarma.com/entities/sun-hung-kai-properties-ltd" target="_blank" data-smartkarma-citation="entities:111:1" rel="noopener">Sun Hung Kai Properties (16 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technology-company-limited" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technology Company Limited (1833 HK)</a>, <a href="https://www.smartkarma.com/entities/sunny-optical-tech" target="_blank" data-smartkarma-citation="entities:13363:1" rel="noopener">Sunny Optical (2382 HK)</a> and <a href="https://www.smartkarma.com/entities/anta-sports-products-ltd" target="_blank" data-smartkarma-citation="entities:10261:1" rel="noopener">Anta Sports Products (2020 HK)</a>. Shorts increased on Energy, while decreasing on Utilities, Health Care, Materials and Communication Services.</p></div><div><p>In Japan, stocks that saw the most shorts were <a href="https://www.smartkarma.com/entities/nexon-co-ltd" target="_blank" data-smartkarma-citation="entities:16032:1" rel="noopener">Nexon (3659 JP)</a>, <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a>, <a href="https://www.smartkarma.com/entities/brother-industries-ltd" target="_blank" data-smartkarma-citation="entities:6114:1" rel="noopener">Brother Industries (6448 JP)</a> and <a href="https://www.smartkarma.com/entities/shiseido-company-limited" target="_blank" data-smartkarma-citation="entities:5718:1" rel="noopener">Shiseido Company (4911 JP)</a> while shorts decreased on <a href="https://www.smartkarma.com/entities/toyo-tire-corporation" target="_blank" data-smartkarma-citation="entities:15064:1" rel="noopener">Toyo Tire Corporation (5105 JP)</a>, <a href="https://www.smartkarma.com/entities/h-i-s-co-ltd" target="_blank" data-smartkarma-citation="entities:19311:1" rel="noopener">H I S Co Ltd (9603 JP)</a>, <a href="https://www.smartkarma.com/entities/east-japan-railway-co" target="_blank" data-smartkarma-citation="entities:14271:1" rel="noopener">East Japan Railway Co (9020 JP)</a> and <a href="https://www.smartkarma.com/entities/gs-yuasa-corp" target="_blank" data-smartkarma-citation="entities:8298:1" rel="noopener">Gs Yuasa Corp (6674 JP)</a>. Shorts increased in all sectors led by Industrials, Information Technology, Communication Services, Consumer Discretionary and Consumer Staples.</p></div><div><p>In Korea, short increased on <a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a> and <a href="https://www.smartkarma.com/entities/lg-uplus-corp" target="_blank" data-smartkarma-citation="entities:1113:1" rel="noopener">LG Uplus Corp (032640 KS)</a> while shorts decreased on <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a>, <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>, <a href="https://www.smartkarma.com/entities/naver-corp" target="_blank" data-smartkarma-citation="entities:16029:1" rel="noopener">Naver Corp (035420 KS)</a> and <a href="https://www.smartkarma.com/entities/lg-display-co-ltd" target="_blank" data-smartkarma-citation="entities:7145:1" rel="noopener">LG Display (034220 KS)</a>. </p></div><div><p>Stocks in Taiwan that saw the highest increase in shorts were <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>, <a href="https://www.smartkarma.com/entities/united-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:6450:1" rel="noopener">United Microelectronics Corp (2303 TT)</a>, <a href="https://www.smartkarma.com/entities/pegatron-corp" target="_blank" data-smartkarma-citation="entities:12852:1" rel="noopener">Pegatron Corp (4938 TT)</a> and <a href="https://www.smartkarma.com/entities/au-optronics-corp" target="_blank" data-smartkarma-citation="entities:6704:1" rel="noopener">Au Optronics (2409 TT)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/fitipower-integrated-tech" target="_blank" data-smartkarma-citation="entities:8712:1" rel="noopener">Fitipower Integrated Tech (4961 TT)</a>, <a href="https://www.smartkarma.com/entities/standard-foods-corp" target="_blank" data-smartkarma-citation="entities:19848:1" rel="noopener">Standard Foods (1227 TT)</a>, <a href="https://www.smartkarma.com/entities/nan-ya-printed-circuit-board-corporation" target="_blank" data-smartkarma-citation="entities:2699:1" rel="noopener">Nan Ya Printed Circuit Board (8046 TT)</a> and <a href="https://www.smartkarma.com/entities/largan-precision-co-ltd" target="_blank" data-smartkarma-citation="entities:9126:1" rel="noopener">Largan Precision (3008 TT)</a>. </p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on Kuaishou Technology (1024 HK), Alibaba Group (9988 HK), HKEX (388 HK), JD Health (6618 HK) and Sun Hung Kai Properties (16 HK) while there was short covering on Tencent Holdings (700 HK), Meituan (3690 HK), Ping An Healthcare and Technology Company Limited (1833 HK), Sunny Optical (2382 HK) and Anta Sports Products (2020 HK). Shorts increased on Energy, while decreasing on Utilities, Health Care, Materials and Communication Services.In Japan, stocks that saw the most shorts were Nexon (3659 JP), Toshiba Corp (6502 JP), Brother Industries (6448 JP) and Shiseido Company (4911 JP) while shorts decreased on Toyo Tire Corporation (5105 JP), H I S Co Ltd (9603 JP), East Japan Railway Co (9020 JP) and Gs Yuasa Corp (6674 JP). Shorts increased in all sectors led by Industrials, Information Technology, Communication Services, Consumer Discretionary and Consumer Staples.In Korea, short increased on SK Hynix (000660 KS) and LG Uplus Corp (032640 KS) while shorts decreased on Celltrion Inc (068270 KS), Samsung Electronics (005930 KS), Naver Corp (035420 KS) and LG Display (034220 KS). Stocks in Taiwan that saw the highest increase in shorts were TSMC (2330 TT), United Microelectronics Corp (2303 TT), Pegatron Corp (4938 TT) and Au Optronics (2409 TT) while shorts were covered on Fitipower Integrated Tech (4961 TT), Standard Foods (1227 TT), Nan Ya Printed Circuit Board (8046 TT) and Largan Precision (3008 TT). 

Asia Short Interest: Kuaishou, HKEX, SHK, Anta, Nexon, Toshiba, Toyo Tire, HIS, Hynix, TSMC, UMC

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<p>With <a href="https://www.smartkarma.com/entities/hitachi-ltd" target="_blank" data-smartkarma-citation="entities:7797:1" rel="noopener">Hitachi Ltd (6501 JP)</a> exploring bids for its <a href="https://www.smartkarma.com/entities/hitachi-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:14457:1" rel="noopener">Hitachi Chemical (4217 JP)</a> unit we examine the subsidiary's array of businesses to try and assess how realistic the reported ¥800bn valuation that has been reported is.</p>

With Hitachi Ltd (6501 JP) exploring bids for its Hitachi Chemical (4217 JP) unit we examine the subsidiary's array of businesses to try and assess how realistic the reported ¥800bn valuation that has been reported is.

Hitachi Chemical: How Can You Justify an ¥800bn Valuation?

Japan

Furukawa Electric Co., Ltd. manufactures wires, cables, and metal products. The Company holds patents in optical fiber coating technology and produces optical fiber cables in the United States.  Furukawa Electric's metal products include aluminum cans, air conditioner parts, and shape memory alloys.

MABUCHI MOTOR CO., LTD. manufactures and markets small digital camera motors. The Company markets its products to a wide range of users, from audio-visual makers, automobile parts makers, consumer electronics makers, office automation equipment makers, precision machine makers to radio controlled-model cars and video game makers.  Mabuchi's products are produced primarily in China.

USHIO INC. manufactures lamps and optical equipment including projectors for movie theaters.  The Company produces halogen and Houdentou lamps for semiconductor and office automation equipment.  Ushio has subsidiaries in the US, Canada, Germany, Hong Kong, Netherlands, Singapore, South Korea, and Taiwan.

DAIHEN Corporation manufactures and repairs a diverse line of transformers, power distribution equipment, welding machines, industrial robots, and semiconductor manufacturing equipment.  The Company also produces other energyrelated equipment such as generators and power monitoring and control systems.

TOYO TANSO CO., LTD. mainly manufactures carbon and graphite products for industrial use.  The Company's main products include isotropic graphite, carbon products for mechanical and electrical applications.

NITTO KOGYO CORPORATION manufactures and sells a variety of power switchboards. The Company also manufactures metal/resin parts for power switchboards, and circuit breakers.

SWCC SHOWA HOLDINGS CO., LTD. produces wires and cables.  The Company's products include electric cables, fiber optic cables, and electronic devices such as routing switches, hub switches, and delay lines.  SWCC  also develops and produces anti-vibration system for building.

SANYO DENKI CO., LTD. manufactures and markets small precision motors used for telecommunications, office automation, and factory automation equipment.  The Company's products include fan motors, UPS, stepping systems, and servo-mechanisms.

IDEC CORPORATION manufactures and markets controlling devices such as switches, display lights, relays, and timers.  The Company has manufacturing bases in Japan, Taiwan and US, and markets its products worldwide through its sales subsidiaries in Canada, Australia, Germany, UK, Singapore, Taiwan, and US.

SINFONIA TECHNOLOGY CO., LTD. manufactures aerospace parts, electronic equipment, factory automation system, and motion control equipment.  The Company's productsinclude prepaid card machines, printers, actuators, unmanned conveyance systems,forklifts, and electromagnetic clutches and brakes.

Shenzhen Kstar Science and Technology Company Limited is an uninterruptible power supply (UPS) provider. The Company engages in uninterruptible power supply and its support services of valve-regulated lead-acid battery battery research and development, production, sales and support.

Shenzhen Kstar Science And Technology (002518 CH)

CS Wind Corporation operates as a wind tower company. The Company manufactures and exports steel wind towers, while also offering aluminum platforms for wind towers. CS Wind extends its products and services globally.

Xi'an Shaangu Power Co., Ltd. provides solutions and services to turbomachinery systems.  The Company's products include turbine compressers, industrial process energy recovery systems, and turbo blower units.

Nantong Jianghai Capacitor Co., Ltd. develops, produces and sells electronic components.  The Company's products include aluminum electrolytic capacitors, surface mounted components and polymer.

Nantong Jianghai Capacitor Co,Ltd. (002484 CH)

Zhongshan Broad Ocean Motor Co Ltd manufactures AC and DC electric motors.

Zhongshan Broad Ocean Motor Co., (002249 CH)

Array Technologies, Inc. designs and manufactures solar tracking systems. The Company offers solar tracking equipment to utilities, corporations, small businesses, and homeowners. Array Technologies serves customers worldwide.

Bizlink Holding Inc., manufactures connectors, cable assemblies, as well as wire harnesses. Their main products include HDMI connectors, display port connectors, solar cables, as well as halogen-free power cords.

HBL Power Systems Ltd. manufactures power systems consisting of batteries and related power electronic products.  The Company makes nickel cadmium pocket plate batteries and thyristor control power convertors.  HBL's products are used in defense, railways, petrochemical, steel, power generation and telecommunication industries.

Titan Wind Energy (Suzhou) Company Limited produces and sells wind towers and wind tower parts.

Xiangtan Electric Manufacturing Company Ltd. manufactures electrical machinery. The Company produces wind turbines, pumps, electrical wheel trucks, electric mining locomotives, industrial locomotives, light rail cars, elevators, hydraulic presses, and ball mills.

Xiangtan Electric Manufacturing Co,Ltd. (600416 CH)

GS Yuasa Corporation is a holding company established through the merger of Yuasa Corp. and Japan Storage Battery Co., Ltd.  The Company manages financial operations for its subsidiaries, which manufactures storage batteries used for automobiles, motorcycles, computers, and lighting equipment.

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Gs Yuasa Corp (6674 JP)

Good Morning Japan |THE SQUEEZE - Just Buy Tech; US Broker U/G to Semi Spurs Rally; Watch Copper

JAPAN. NKY Futs +0.9% vs Cash; USDJPY 130.65; Where US goes, Japan will follow: All about Tech; Kishida speech: Nuclear Power, Defense, Child...

Mark Chadwick

JPX-Nikkei 400 Rebalance 2021: Pre-Event Basket Adjustments for June-End

The JPX Nikkei 400 Rebalance of August 2021 will be based on an end-June 2021 base date (for fundamental, volume, and market cap data). Our...

Janaghan Jeyakumar, CFA

JPX-Nikkei 400 Rebalance 2021: Pre-Event Basket Adjustments for May-End

We look at the JPX Nikkei 400 Pre-event Rebalance Trade on a monthly basis, checking what is the most likely portfolio as we approach the base date...

Janaghan Jeyakumar, CFA

Asia Short Interest: Kuaishou, HKEX, SHK, Anta, Nexon, Toshiba, Toyo Tire, HIS, Hynix, TSMC, UMC

The Insight looks at large short interest movements across HK, Japan, Korea and Taiwan stocks and highlights large increases/decreases in shorts to...

Brian Freitas

Hitachi Chemical: How Can You Justify an ¥800bn Valuation?

With Hitachi Ltd (6501 JP) exploring bids for its Hitachi Chemical (4217 JP) unit we examine the subsidiary's array of businesses to try and assess...

Mio Kato

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