Japan Specialist

Mark Chadwick

Equity Bottom-Up

Kawasaki Heavy Industries / Equity Bottom-Up

<ul>
<li>The recent pull-back in the share price of KHI provides a cheap entry point into the defense spending thematic</li>
<li>KHI’s defense revenues are projected to soar by 40% to ¥406 billion in FY24, outpacing industry leader MHI's 20% growth</li>
<li>KHI and MJI to benefit from Japan’s defense spending doubling to 2% of GDP by 2027 and ¥43 trillion ($320 billion) earmarked over five years. </li>
</ul>


The recent pull-back in the share price of KHI provides a cheap entry point into the defense spending thematic
KHI’s defense revenues are projected to soar by 40% to ¥406 billion in FY24, outpacing industry leader MHI's 20% growth
KHI and MJI to benefit from Japan’s defense spending doubling to 2% of GDP by 2027 and ¥43 trillion ($320 billion) earmarked over five years. 


Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

<ul>
<li>Expect continued buying in defense related, as well as banks and life insurance, renewable energy, rails, and medical IT plays with Shigeru Ishiba at the helm. </li>
<li>The Market will be quick to rotate out of names which spiked into Friday's close on expectation for a Sanae Takaichi win in the LDP election.  </li>
<li>Ishiba has been a vocal critic of Abenomics, and his potential policies aimed at higher taxes for investment incomes and capital gains are set to weigh on the Japanese market. </li>
</ul>


Expect continued buying in defense related, as well as banks and life insurance, renewable energy, rails, and medical IT plays with Shigeru Ishiba at the helm. 
The Market will be quick to rotate out of names which spiked into Friday's close on expectation for a Sanae Takaichi win in the LDP election.  
Ishiba has been a vocal critic of Abenomics, and his potential policies aimed at higher taxes for investment incomes and capital gains are set to weigh on the Japanese market. 


Best Outright and Pair Trades for an Ishiba-Led LDP

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted capped index composed of 400 constituents.</li>
<li>The annual index review takes place in August every year. We look at the latest rankings of potential ADDs/DELs every month.</li>
<li>Below is a look at the rankings of potential ADDs/DELs for the JPX-Nikkei 400 August 2025 rebalance based on trading data as of end-<em>December</em> 2024.</li>
</ul>


JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted capped index composed of 400 constituents.
The annual index review takes place in August every year. We look at the latest rankings of potential ADDs/DELs every month.
Below is a look at the rankings of potential ADDs/DELs for the JPX-Nikkei 400 August 2025 rebalance based on trading data as of end-December 2024.


Quiddity JPX-Nikkei 400 Rebal 2025: End-Dec 2024 Ranks

Thematic (Sector/Industry)

<ul>
<li>Tech sell off led my semi-cap names after D/G to sell for AMAT</li>
<li>Ulta beat paints a brighter picture for US consumer spending than expected</li>
<li>Is the relentless buy momo/sell everything else in Japan ready for a reversal?</li>
</ul>


Tech sell off led my semi-cap names after D/G to sell for AMAT
Ulta beat paints a brighter picture for US consumer spending than expected
Is the relentless buy momo/sell everything else in Japan ready for a reversal?


Japan Morning Connection: Markets Clearly Starting to Show EoY Wind Down

<ul>
<li>Mixed signals for JP semi's with the positive read from ASML set to be tempered by the AMAT numbers.</li>
<li>Trump cutting the $7.5k EV tax credit hitting Tesla, Rivian and power semi's.</li>
<li>Govt. names down on concerns over what Musk's DOGE means for Govt spending.</li>
</ul>


Mixed signals for JP semi's with the positive read from ASML set to be tempered by the AMAT numbers.
Trump cutting the $7.5k EV tax credit hitting Tesla, Rivian and power semi's.
Govt. names down on concerns over what Musk's DOGE means for Govt spending.


Japan Morning Connection: SPE Continues to Be Under Pressure

Japan

Kawasaki Heavy Industries, Ltd. designs, develops, and manufactures transport equipment and industrial heavy machinery for military and commercial use.  The Company produces ships, railroad cars, aircraft engines and parts, hydraulic and gas turbines, submarine engines, boilers, and industrial robots.  Kawasaki Heavy Industries offers engineering and construction services to industrial plants.

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Kawasaki Heavy Industries (7012 JP)

Japan Alpha | Bullish KHI (And MHI)

Investors can capitalize on KHI's discounted stock price for potential gains as defense revenues are expected to surge, outpacing industry leader...

Mark Chadwick

Best Outright and Pair Trades for an Ishiba-Led LDP

How to position in Japanese equities after the surprise win by Shigeru Ishiba over Sanae Takaichi in Friday's LDP election.

Andrew Jackson

Quiddity JPX-Nikkei 400 Rebal 2025: End-Dec 2024 Ranks

The LONGs have outperformed the SHORTs by 3.1% in December 2024. The HIGH and MED potential ADDs could continue to outperform the HIGH and MED...

Janaghan Jeyakumar, CFA

Japan Morning Connection: Markets Clearly Starting to Show EoY Wind Down

Tech sell off led semi-cap names after D/G to sell for AMAT, Ulta beat signals stronger US consumer spending than expected, has buy momo/sell...

Andrew Jackson

Japan Morning Connection: SPE Continues to Be Under Pressure

Mixed signals for semi's with positive news from ASML while AMAT numbers dissapoint. EV tax credit cuts impact Tesla, Rivian, and power semi's....

Andrew Jackson

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52-week Range

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P/E

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Japan Alpha | Bullish KHI (And MHI)

​Investors can capitalize on KHI's discounted stock price for potential gains as defense revenues are expected to surge, outpacing industry leader...

Mark Chadwick

Best Outright and Pair Trades for an Ishiba-Led LDP

How to position in Japanese equities after the surprise win by Shigeru Ishiba over Sanae Takaichi in Friday's LDP election.

Andrew Jackson

Quiddity JPX-Nikkei 400 Rebal 2025: End-Dec 2024 Ranks

The LONGs have outperformed the SHORTs by 3.1% in December 2024. The HIGH and MED potential ADDs could continue to outperform the HIGH and MED...

Janaghan Jeyakumar, CFA

Japan Morning Connection: Markets Clearly Starting to Show EoY Wind Down

Tech sell off led semi-cap names after D/G to sell for AMAT, Ulta beat signals stronger US consumer spending than expected, has buy momo/sell...

Andrew Jackson

Japan Morning Connection: SPE Continues to Be Under Pressure

​Mixed signals for semi's with positive news from ASML while AMAT numbers dissapoint. EV tax credit cuts impact Tesla, Rivian, and power semi's....

Andrew Jackson

Investors can capitalize on KHI's discounted stock price for potential gains as defense revenues are expected to surge, outpacing industry leader...

Mixed signals for semi's with positive news from ASML while AMAT numbers dissapoint. EV tax credit cuts impact Tesla, Rivian, and power semi's....