'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

ja research

ja research is an independent research platform focused exclusively on Japanese equities. Leveraging data and graphic analysis provided by Japan Analytics, we provide insights on small and medium-sized companies that have been ignored by the sell-side as well as challenging conventional wisdom on larger companies. We also offer analyst and corporate access, the latter with translation if required. 

Thematic (Sector/Industry)

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/061/034/original/2018-08-16_19-07-34.png?1534672507" class="editor-image img-responsive" data-smartkarma-image-id="61034"></figure><div class="content-caption">Source: Japan Analytics</div>A GOOD QUARTER - The Composite Results Score has now declined for seven months in a row and is implying a slowing of the upward momentum in earnings.  However, the score has only declined by 31 basis points since last quarter showing a degree of 'stability' seen only in 2011 in recent years.  The aggregate Forecast/Revision score has also continued to decline and is now lower for the fourth straight month. As would be expected, this score is a reliable leading indicator for the Results Score and suggests further weakening in the rate of earnings growth in the months ahead.  Neither score is, as yet, suggesting a decline in earnings before the end of the fiscal year.YEN CORRELATION WEAKENING - This quarter's earnings' stability was surprising given the relative strength of the Yen compared to a year ago. In the past and even as recently as 2016, a 5 per cent year-on-year decline has resulted in negative Results Scores. The year-on-year change in now positive so any negative impact will dissipate over the next two quarters.MARKET FOLLOWS MOMENTUM LOWER - The All Market Composite peaked on 23rd January and has since fallen by 11% despite a continuation of the Bank of Japan's ETF purchasing programme. Weakening earnings momentum and the overvaluation of many of the leading stocks, as in our '<a href="https://www.smartkarma.com/insights/japan-most-overbought-most-oversold-the-relative-price-score" target="_blank" data-smartkarma-citation="insights:21149">Nifty 50</a>' portfolio, have been contributing factors. With prospects for a much weaker Yen limited by the current trade negotiations between Japan and the United States, and with global growth slowing, we expect both Results and Revision Scores to trend lower, but to end the fiscal year in positive territory. Historically, the market has not risen during periods when both the Results and Forecast/Revision Scores have been trending down.<div class="content-highlight">MARKET RECOMMENDATION - Within a global portfolio, we would market-weight Japanese equities with a bias towards domestic sectors and not hedge the currency exposure.</div>SECTOR RESULTS SCORES -The good news is that only one sector, (Multi-Industry - 75% of which is <a href="https://www.smartkarma.com/entities/359" target="_blank" data-smartkarma-citation="entities:359:1">Japan Post [6178 JP</a>]) has a negative score - and its score is less negative than last quarter. Both the Media and Consumer Services sectors' scores turned positive and each increased by more than two points.  On the other hand, over half of our 29 sectors saw declining scores, although the number was lower than last quarter.  The top sectors in terms of quarter-on-quarter change were Energy, Consumer Services, Media, Information Technology and Other Commercial Products while the laggards were Non-Bank Finance, Chemicals, Construction, Machinery and Utilities. SECTOR REVISION SCORES - Five sectors have negative Forecast/Revision Scores with Utilities now joining Media, Multi-Industry, Autos and Banks from last quarter. The highest scores are in the Energy, Technology Hardware, Electrical Equipment, Retail and Information Technology sectors. Improvements of greater than one point were seen in Energy, Media and Machinery while Food, Beverages &amp; Tobacco, Chemicals, Utilities, Other Materials and Technology Hardware all lost more than one point. Overall eighteen sectors saw declines.REVISION V. RESULTS SCORES - The difference between the Results and Revision Scores is a good indicator of corporate expectations compared with the trailing-twelve-month reality. In some cases (e.g. Restaurants) the 'optimism' is due to a failure to revise forecasts in the light of weaker results. In others, such as Telecommunications, there is scope for upward revisions in the coming quarters.<div class="content-highlight">
THE OPTIMISTS
Restaurants • Other Materials • Electrical Equipment • Technology Hardware • Retail
THE PESSIMISTS
Banks • Autos • Telecommunications • Utilities • Media • Chemicals
</div>SECTOR PERFORMANCE - Over the last three months, our Japan Market Composite declined by 5.8%. Only four sectors saw an increase in value led by Telecommunications, Energy, Commercial Services and Information Technology. The largest declines were in the Building Materials, Metals, Real Estate Construction and Machinery sectors. Nine sectors are now negative over one year led by Building Materials, Metals and Food, Beverages &amp; Tobacco and only eight are up in double-digits led by Services and Information Technology. For the time being, Domestic Non-Manufacturing sectors 'rules the roost' and Domestic Cyclical sectors have taken over from Global Cyclicals in the 'doghouse'.'.<div class="content-highlight">
SECTOR RECOMMENDATIONS
Our most-preferred sectors are currently Energy, Healthcare, Telecommunications, Other Commercial Products and Information Technology.
Least-preferred sectors are Metals, Chemicals, Machinery, Autos, Construction, Real Estate, Building Materials, Food Beverages &amp; Tobacco and Utilities.
</div>TOP 5 LARGER PEER GROUPS - The top five Peer Groups capitalised at over ¥1 trillion are Machine Tools &amp; Presses, PC &amp; Computer Peripherals, Oil &amp; Gas Refining &amp; Marketing, Telecom Distribution Services and Sporting &amp; Outdoor Goods. The top twenty larger Peer Groups have gained 16% over one year but have declined by 4% on average the last three months.BOTTOM 5 LARGER PEER GROUPS - The bottom five Peer Groups capitalised at over ¥1 trillion are Audio/Visual Content, LCD/LED Materials &amp; Equipment, Electrical Engineering, General Contractors and Real Estate - Leasing. The bottom twenty larger Peer Groups have lost 2% over one year and 9% over the last three months. Only Security Services and Tobacco have risen since May.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/061/038/original/2018-08-19_19-33-03.png?1534674804" class="editor-image img-responsive" data-smartkarma-image-id="61038"></figure>

Source: Japan AnalyticsA GOOD QUARTER - The Composite Results Score has now declined for seven months in a row and is implying a slowing of the upward momentum in earnings.  However, the score has only declined by 31 basis points since last quarter showing a degree of 'stability' seen only in 2011 in recent years.  The aggregate Forecast/Revision score has also continued to decline and is now lower for the fourth straight month. As would be expected, this score is a reliable leading indicator for the Results Score and suggests further weakening in the rate of earnings growth in the months ahead.  Neither score is, as yet, suggesting a decline in earnings before the end of the fiscal year.YEN CORRELATION WEAKENING - This quarter's earnings' stability was surprising given the relative strength of the Yen compared to a year ago. In the past and even as recently as 2016, a 5 per cent year-on-year decline has resulted in negative Results Scores. The year-on-year change in now positive so any negative impact will dissipate over the next two quarters.MARKET FOLLOWS MOMENTUM LOWER - The All Market Composite peaked on 23rd January and has since fallen by 11% despite a continuation of the Bank of Japan's ETF purchasing programme. Weakening earnings momentum and the overvaluation of many of the leading stocks, as in our 'Nifty 50' portfolio, have been contributing factors. With prospects for a much weaker Yen limited by the current trade negotiations between Japan and the United States, and with global growth slowing, we expect both Results and Revision Scores to trend lower, but to end the fiscal year in positive territory. Historically, the market has not risen during periods when both the Results and Forecast/Revision Scores have been trending down.MARKET RECOMMENDATION - Within a global portfolio, we would market-weight Japanese equities with a bias towards domestic sectors and not hedge the currency exposure.SECTOR RESULTS SCORES -The good news is that only one sector, (Multi-Industry - 75% of which is Japan Post [6178 JP]) has a negative score - and its score is less negative than last quarter. Both the Media and Consumer Services sectors' scores turned positive and each increased by more than two points.  On the other hand, over half of our 29 sectors saw declining scores, although the number was lower than last quarter.  The top sectors in terms of quarter-on-quarter change were Energy, Consumer Services, Media, Information Technology and Other Commercial Products while the laggards were Non-Bank Finance, Chemicals, Construction, Machinery and Utilities. SECTOR REVISION SCORES - Five sectors have negative Forecast/Revision Scores with Utilities now joining Media, Multi-Industry, Autos and Banks from last quarter. The highest scores are in the Energy, Technology Hardware, Electrical Equipment, Retail and Information Technology sectors. Improvements of greater than one point were seen in Energy, Media and Machinery while Food, Beverages &amp; Tobacco, Chemicals, Utilities, Other Materials and Technology Hardware all lost more than one point. Overall eighteen sectors saw declines.REVISION V. RESULTS SCORES - The difference between the Results and Revision Scores is a good indicator of corporate expectations compared with the trailing-twelve-month reality. In some cases (e.g. Restaurants) the 'optimism' is due to a failure to revise forecasts in the light of weaker results. In others, such as Telecommunications, there is scope for upward revisions in the coming quarters.
THE OPTIMISTS
Restaurants • Other Materials • Electrical Equipment • Technology Hardware • Retail
THE PESSIMISTS
Banks • Autos • Telecommunications • Utilities • Media • Chemicals
SECTOR PERFORMANCE - Over the last three months, our Japan Market Composite declined by 5.8%. Only four sectors saw an increase in value led by Telecommunications, Energy, Commercial Services and Information Technology. The largest declines were in the Building Materials, Metals, Real Estate Construction and Machinery sectors. Nine sectors are now negative over one year led by Building Materials, Metals and Food, Beverages &amp; Tobacco and only eight are up in double-digits led by Services and Information Technology. For the time being, Domestic Non-Manufacturing sectors 'rules the roost' and Domestic Cyclical sectors have taken over from Global Cyclicals in the 'doghouse'.'.
SECTOR RECOMMENDATIONS
Our most-preferred sectors are currently Energy, Healthcare, Telecommunications, Other Commercial Products and Information Technology.
Least-preferred sectors are Metals, Chemicals, Machinery, Autos, Construction, Real Estate, Building Materials, Food Beverages &amp; Tobacco and Utilities.
TOP 5 LARGER PEER GROUPS - The top five Peer Groups capitalised at over ¥1 trillion are Machine Tools &amp; Presses, PC &amp; Computer Peripherals, Oil &amp; Gas Refining &amp; Marketing, Telecom Distribution Services and Sporting &amp; Outdoor Goods. The top twenty larger Peer Groups have gained 16% over one year but have declined by 4% on average the last three months.BOTTOM 5 LARGER PEER GROUPS - The bottom five Peer Groups capitalised at over ¥1 trillion are Audio/Visual Content, LCD/LED Materials &amp; Equipment, Electrical Engineering, General Contractors and Real Estate - Leasing. The bottom twenty larger Peer Groups have lost 2% over one year and 9% over the last three months. Only Security Services and Tobacco have risen since May.

Japan: Results & Revision Scores Summer 2018 Update - Market Composite, Sectors & Peer Groups

Global Cross-Asset Energy Analyst, VAC Investments

Aaditya Chintalapati, CFA

Global Cross-Asset Energy Analyst

VAC Investments

<h2>Oil Price</h2>
Crude oil prices fell for the sixth straight week, with WTI ending the week at USD 68.5/bbl and Brent at USD 73/bbl. Expectations of rising global demand for crude in the medium-term and potential supply disruptions from Iranian sanctions were overshadowed by market concerns around the risks of global trade disruptions from the US and China's ongoing dispute, likely downside risks to European crude demand from Turkey's crude imports given ongoing currency weakness and increased supply…

Oil Price
Crude oil prices fell for the sixth straight week, with WTI ending the week at USD 68.5/bbl and Brent at USD 73/bbl. Expectations of rising global demand for crude in the medium-term and potential supply disruptions from Iranian sanctions were overshadowed by market concerns around the risks of global trade disruptions from the US and China's ongoing dispute, likely downside risks to European crude demand from Turkey's crude imports given ongoing currency weakness and increased supply…

Founder and Strategist, Entext Economics & Strategy

Sean Maher

Founder and Strategist

Entext Economics & Strategy

Entext provides institutional investors with distinctive, actionable asset allocation and thematic research, which typically challenges the market consensus. Our clients range from credit, equity and multi-asset hedge and pension funds to family offices and sovereign funds. 
 
We focus on identifying key inflection points in macro data and relative asset performance amid the 'groupthink'  and confirmation bias that characterizes most investment bank analysis.

Macro Driven Investment Insight

We’ve been bullish on crude oil this year and the surprise has been weak US gasoline demand, creating a growing product surplus rippling through the global downstream sector.US gasoline demand is now forecast to fall marginally for the first time since 2012 to 9.3m bpd, according to the latest <a href="https://www.eia.gov/outlooks/steo/" target="_blank">EIA Short-Term Energy Outlook</a> report. That has depressed Asian downstream spreads, although refining margins in Singapore have rebounded on surging demand for gasoline and jet fuel as crude oil prices…

We’ve been bullish on crude oil this year and the surprise has been weak US gasoline demand, creating a growing product surplus rippling through the global downstream sector.US gasoline demand is now forecast to fall marginally for the first time since 2012 to 9.3m bpd, according to the latest EIA Short-Term Energy Outlook report. That has depressed Asian downstream spreads, although refining margins in Singapore have rebounded on surging demand for gasoline and jet fuel as crude oil prices…

Equity Analyst, LightStream Research

Nuzran Sahib

Equity Analyst

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.

Equity Bottom-Up

In this report, we look at the performances of view on the stocks we covered for the first half of 2018. We covered the Japanese Airlines – <a href="https://www.smartkarma.com/entities/1184" target="_blank" data-smartkarma-citation="entities:1184:1">Japan Airlines Co Ltd (9201 JP)</a> and <a href="https://www.smartkarma.com/entities/5308" target="_blank" data-smartkarma-citation="entities:5308:1">ANA Holdings Inc (9202 JP)</a> , the three shipping majors in Japan( <a href="https://www.smartkarma.com/entities/12285" target="_blank" data-smartkarma-citation="entities:12285:1">Nippon Yusen Kk (9101 JP)</a>, <a href="https://www.smartkarma.com/entities/20717" target="_blank" data-smartkarma-citation="entities:20717:1">Mitsui Osk Lines Ltd (9104 JP)</a> and <a href="https://www.smartkarma.com/entities/3548" target="_blank" data-smartkarma-citation="entities:3548:1">Kawasaki Kisen Kaisha Ltd (9107 JP)</a> ), <a href="https://www.smartkarma.com/entities/6232" target="_blank" data-smartkarma-citation="entities:6232:1">Chiyoda Corp (6366 JP)</a> and <a href="https://www.smartkarma.com/entities/20665" target="_blank" data-smartkarma-citation="entities:20665:1">Inpex Corp (1605 JP)</a>.<h2>Our Bearish view on Shipping Majors of Japan Standout Amongst Our Stock-Calls</h2>We covered NYK and MOL where we…

In this report, we look at the performances of view on the stocks we covered for the first half of 2018. We covered the Japanese Airlines – Japan Airlines Co Ltd (9201 JP) and ANA Holdings Inc (9202 JP) , the three shipping majors in Japan( Nippon Yusen Kk (9101 JP), Mitsui Osk Lines Ltd (9104 JP) and Kawasaki Kisen Kaisha Ltd (9107 JP) ), Chiyoda Corp (6366 JP) and Inpex Corp (1605 JP).Our Bearish view on Shipping Majors of Japan Standout Amongst Our Stock-CallsWe covered NYK and MOL where we…

A Performance Review on Our Recommended Positions for the Last Six Months

JAPAN AGGREGATE CASH FLOW UPDATE - This insight updates <a href="https://www.smartkarma.com/insights/japan-declining-operating-cash-flow-to-curtail-investments" target="_blank" data-smartkarma-citation="insights:19403">Declining Operating Cash Flow to Curtail Investments</a> with the most recent quarterly reports issued earlier in the month.  This report will also cover the cash flow trends in some key sectors and larger capitalisation companies. OPERATING CASH FLOW YEN SENSITIVITY -  Operating Cash Flow (OCF) has now declined for two quarters in a row and remains very sensitive to changes in the US$/¥ exchange. To sustain aggregate OCF of more than ¥10t appears to requires a ¥/US$ rate of over ¥110. A continued fall in OCF in the coming quarters will result in much lower investment spending this fiscal year.CAPEX CONTRACTION - The last quarter has seen the most significant positive swing in Investing Cash Flow in the last two years. Positive amounts equate to reductions in fixed assets and/or inventories. This quarter’s investment cash flow correction is small and another bout of Yen weakness may make it short-lived, however, further Yen strength would result in a more prolonged pause in fixed asset investment similar to the ¥5.5t contraction in spending from 2015-Q3 to 2016-Q2.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/053/752/original/2018-05-30_10-12-57.png?1527642809" class="editor-image img-responsive" data-smartkarma-image-id="53752"></figure><div class="content-caption">Source: Japan Analytics</div>PEAK FREE CASH FLOW - It is highly unusual for Investing Cash Flow to contract when Operating Cash Flow exceeds ¥5t. The last quarter was the first time this has occurred since 2010. As a result, the 2018-Q1 Free Cash Flow of ¥13.2t was the highest in any quarter in the last thirty years. This bodes well for future investment spending, should the corporate outlook improve, but suggests an alarming degree of pessimism in Japanese boardrooms. SHAREHOLDER’S SHARE - 60% of the cumulative ¥95t of Free Cash Flow has been allocated to shareholders in either dividends or share buybacks, with the latter comprising only 4% of the total. After another recent spate of debt reduction, the cash pile has grown to ¥35t, although this is still less than 10% of current Net Assets.    FURTHER DEBT REDUCTION - Japanese corporates have maintained an aggregate amount of gross debt of between ¥78t and ¥92t for the last seven years despite liquid assets having risen by over ¥50t over that period. With cash &amp; marketable securities now one-third of total net assets and with, it seems, a smaller investment appetite, more debt-reduction can be expected.RETURN TO SHARE BUYBACKS - Q1 is a quiet quarter for dividends which peak in Q2 and Q4 in each year. However, Japanese companies completed net stock buybacks of ¥0.8t last quarter after two-quarters of net fundraising, helped, no doubt, by the weaker market conditions during the period.SECTOR &amp; COMPANY CASH FLOW TRENDS - 60% of this quarter's Operating Cash Flow (OCF) occurred in just five sectors - Utilities, Construction, Autos, Real Estate and Telecoms.  The top 26 companies accounted for 99.5% of the total with the remaining effectively netting off to zero.  In the case of <a href="https://www.smartkarma.com/entities/15457" target="_blank" data-smartkarma-citation="entities:15457:1">Tokyo Electric Power (9501 JP)</a>, the Operating Cash Flow for the quarter exceed 50% of current market capitalisation. We also look at cash flow trends for <a href="https://www.smartkarma.com/entities/8914" target="_blank" data-smartkarma-citation="entities:8914:1">Bridgestone (5108 JP)</a>, <a href="https://www.smartkarma.com/entities/154" target="_blank" data-smartkarma-citation="entities:154:1">Honda (7267 JP)</a>, <a href="https://www.smartkarma.com/entities/7896" target="_blank" data-smartkarma-citation="entities:7896:1">Taisei Corp (1801 JP)</a>, and <a href="https://www.smartkarma.com/entities/753" target="_blank" data-smartkarma-citation="entities:753:1">Kyocera (6971 JP)</a>.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/053/751/original/2018-05-30_08-52-23.png?1527640472" class="editor-image img-responsive" data-smartkarma-image-id="53751"></figure><div class="content-caption">Source: Japan Analytics</div><div class="content-highlight">EXPORT VOLUME GROWTH FALLS TO ZERO - Japan's export volumes have recently fallen from the double-digit year-on-year growth levels at the start of the year to close to zero. This sharp contraction in exports, when combined with the recent sustained upward move in domestic labour costs, explains the muted initial forecasts offered by March year-end companies for the current fiscal year. Slowing export volumes are also responsible for the third largest quarterly inventory correction in seven years and the most significant such correction in a quarter when aggregate Operating Cash Flows exceeded ¥5 trillion. JAPAN INC. SIGNALS A CYCLE PEAK -  Quarterly Free Cash Flow in the quarter ended March 2018 exceeded ¥13 trillion - the highest level for quarterly Free Cash Flow in seven years. High levels of Free Cash Flow are ordinarily consistent with peaks in the business cycle as cash is reaped from previous investments while management is reluctant to make new commitments. Japan Inc.'s abrupt application of the investment 'brakes' suggests a significant degree of pessimism regarding the business outlook. Absent a further significant decline in the Yen, this outlook appears to be justified. </div>

JAPAN AGGREGATE CASH FLOW UPDATE - This insight updates Declining Operating Cash Flow to Curtail Investments with the most recent quarterly reports issued earlier in the month.  This report will also cover the cash flow trends in some key sectors and larger capitalisation companies. OPERATING CASH FLOW YEN SENSITIVITY -  Operating Cash Flow (OCF) has now declined for two quarters in a row and remains very sensitive to changes in the US$/¥ exchange. To sustain aggregate OCF of more than ¥10t appears to requires a ¥/US$ rate of over ¥110. A continued fall in OCF in the coming quarters will result in much lower investment spending this fiscal year.CAPEX CONTRACTION - The last quarter has seen the most significant positive swing in Investing Cash Flow in the last two years. Positive amounts equate to reductions in fixed assets and/or inventories. This quarter’s investment cash flow correction is small and another bout of Yen weakness may make it short-lived, however, further Yen strength would result in a more prolonged pause in fixed asset investment similar to the ¥5.5t contraction in spending from 2015-Q3 to 2016-Q2.Source: Japan AnalyticsPEAK FREE CASH FLOW - It is highly unusual for Investing Cash Flow to contract when Operating Cash Flow exceeds ¥5t. The last quarter was the first time this has occurred since 2010. As a result, the 2018-Q1 Free Cash Flow of ¥13.2t was the highest in any quarter in the last thirty years. This bodes well for future investment spending, should the corporate outlook improve, but suggests an alarming degree of pessimism in Japanese boardrooms. SHAREHOLDER’S SHARE - 60% of the cumulative ¥95t of Free Cash Flow has been allocated to shareholders in either dividends or share buybacks, with the latter comprising only 4% of the total. After another recent spate of debt reduction, the cash pile has grown to ¥35t, although this is still less than 10% of current Net Assets.    FURTHER DEBT REDUCTION - Japanese corporates have maintained an aggregate amount of gross debt of between ¥78t and ¥92t for the last seven years despite liquid assets having risen by over ¥50t over that period. With cash &amp; marketable securities now one-third of total net assets and with, it seems, a smaller investment appetite, more debt-reduction can be expected.RETURN TO SHARE BUYBACKS - Q1 is a quiet quarter for dividends which peak in Q2 and Q4 in each year. However, Japanese companies completed net stock buybacks of ¥0.8t last quarter after two-quarters of net fundraising, helped, no doubt, by the weaker market conditions during the period.SECTOR &amp; COMPANY CASH FLOW TRENDS - 60% of this quarter's Operating Cash Flow (OCF) occurred in just five sectors - Utilities, Construction, Autos, Real Estate and Telecoms.  The top 26 companies accounted for 99.5% of the total with the remaining effectively netting off to zero.  In the case of Tokyo Electric Power (9501 JP), the Operating Cash Flow for the quarter exceed 50% of current market capitalisation. We also look at cash flow trends for Bridgestone (5108 JP), Honda (7267 JP), Taisei Corp (1801 JP), and Kyocera (6971 JP).Source: Japan AnalyticsEXPORT VOLUME GROWTH FALLS TO ZERO - Japan's export volumes have recently fallen from the double-digit year-on-year growth levels at the start of the year to close to zero. This sharp contraction in exports, when combined with the recent sustained upward move in domestic labour costs, explains the muted initial forecasts offered by March year-end companies for the current fiscal year. Slowing export volumes are also responsible for the third largest quarterly inventory correction in seven years and the most significant such correction in a quarter when aggregate Operating Cash Flows exceeded ¥5 trillion. JAPAN INC. SIGNALS A CYCLE PEAK -  Quarterly Free Cash Flow in the quarter ended March 2018 exceeded ¥13 trillion - the highest level for quarterly Free Cash Flow in seven years. High levels of Free Cash Flow are ordinarily consistent with peaks in the business cycle as cash is reaped from previous investments while management is reluctant to make new commitments. Japan Inc.'s abrupt application of the investment 'brakes' suggests a significant degree of pessimism regarding the business outlook. Absent a further significant decline in the Yen, this outlook appears to be justified. 

Japan Inc. Applies the Brakes - 1st Quarterly Capex Contraction Since 2016 Signals a Cycle Peak

Japan

INPEX CORPORATION is a holding company established through the reorganization of INPEX Corp and Teikoku Oil.  The Company manages subsidiaries that explores, produces, and sells oil and natural gas.

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Inpex Corp (1605 JP)

Japan: Results & Revision Scores Summer 2018 Update - Market Composite, Sectors & Peer Groups

A GOOD QUARTER - The Composite Results Score has now declined for seven months in a row and is implying a slowing of the upward momentum in...

Campbell Gunn

Global E&Ps: Energy Weekly Vol. 21

Oil Price Crude oil prices fell for the sixth straight week, with WTI ending the week at USD 68.5/bbl and Brent at USD 73/bbl. Expectations of...

Aaditya Chintalapati, CFA

Worst Over for Asian Refining Spreads?

We’ve been bullish on crude oil this year and the surprise has been weak US gasoline demand, creating a growing product surplus rippling through...

Sean Maher

A Performance Review on Our Recommended Positions for the Last Six Months

In this report, we look at the performances of view on the stocks we covered for the first half of 2018. We covered the Japanese Airlines – Japan...

Nuzran Sahib

Japan Inc. Applies the Brakes - 1st Quarterly Capex Contraction Since 2016 Signals a Cycle Peak

JAPAN AGGREGATE CASH FLOW UPDATE - This insight updates Declining Operating Cash Flow to Curtail Investments with the most recent quarterly reports...

Campbell Gunn

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