Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In April, a Bloomberg <a href="https://www.bloomberg.com/news/articles/2022-04-22/renault-is-said-to-explore-nissan-stake-sale-to-support-ev-shift" target="_blank" rel="noopener">story</a> said <a href="https://www.smartkarma.com/entities/renault-sa" target="_blank" data-smartkarma-citation="entities:21536:1" rel="noopener">Renault SA (RNO FP)</a> might sell shares in <a href="https://www.smartkarma.com/entities/nissan-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:72:1" rel="noopener">Nissan Motor (7201 JP)</a> to support its investment in EVs. They might sell to Nissan, others.</li>
<li>Renault shares popped hard, this two months after CEO Luca de Meo had said Renault might split, investing in and listing its EV business separately.  But since then? Crickets.</li>
<li>Over the weekend, we have news talks are coming to a head. My feeling? The results won't be pretty - a messy agreement which inspires nobody, but <em>probably still works</em>.</li>
</ul>


In April, a Bloomberg story said Renault SA (RNO FP) might sell shares in Nissan Motor (7201 JP) to support its investment in EVs. They might sell to Nissan, others.
Renault shares popped hard, this two months after CEO Luca de Meo had said Renault might split, investing in and listing its EV business separately.  But since then? Crickets.
Over the weekend, we have news talks are coming to a head. My feeling? The results won't be pretty - a messy agreement which inspires nobody, but probably still works.


Renault & Nissan - Capital Manoeuvres In the Dark

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>Topix down 4.2% on persistent concerns about surging inflation, rising interest rates and a highly uncertain global economic outlook</li>
<li>The Nikkei index shed 7.7% in September, its biggest monthly decline since March 2020.</li>
<li>Disappointing commentary from NIKE, APPLE and automakers not helping sentiment</li>
</ul>


Topix down 4.2% on persistent concerns about surging inflation, rising interest rates and a highly uncertain global economic outlook
The Nikkei index shed 7.7% in September, its biggest monthly decline since March 2020.
Disappointing commentary from NIKE, APPLE and automakers not helping sentiment


Equity Bottom-Up

<ul>
<li>The stock price of Mitsubishi Motors has been driven by exposure to the weak Japanese yen and the sharp recovery in ASEAN auto sales </li>
<li>The valuation at 1x book is now at a premium versus the sector and its historical average</li>
<li>We believe that the 2H could be an uphill battle against rising petrol prices and weakening consumer confidence in the core markets</li>
</ul>


The stock price of Mitsubishi Motors has been driven by exposure to the weak Japanese yen and the sharp recovery in ASEAN auto sales 
The valuation at 1x book is now at a premium versus the sector and its historical average
We believe that the 2H could be an uphill battle against rising petrol prices and weakening consumer confidence in the core markets


Mitsubishi Motors (7211) | Take Your Foot off the Gas

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

<ul>
<li>We are seeing signs that suggest this pullback may have run its course, as several global market indexes and Sectors appear to be making a higher low near logical support.</li>
<li>This includes the S&amp;P 500, Russell 2000, MSCI ACWI (local currency), TOPIX/TOPIX Small/Nikkei 225, MSCI ACWI Technology (IXN-US), Consumer Discretionary (RXI-US), Financials (IXG-US), Industrials and (EXI-US) -- add exposure.</li>
<li>While our overall outlook remains neutral, we continue to see a plethora of attractive buying opportunities in the new leaders.</li>
</ul>


We are seeing signs that suggest this pullback may have run its course, as several global market indexes and Sectors appear to be making a higher low near logical support.
This includes the S&amp;P 500, Russell 2000, MSCI ACWI (local currency), TOPIX/TOPIX Small/Nikkei 225, MSCI ACWI Technology (IXN-US), Consumer Discretionary (RXI-US), Financials (IXG-US), Industrials and (EXI-US) -- add exposure.
While our overall outlook remains neutral, we continue to see a plethora of attractive buying opportunities in the new leaders.


Pullback Complete?; Commodities Heading Lower; Buying Growth/Cyclicals & A Few Utilities

<ul>
<li>The Nikkei was up +2.15% over the past week (-2% YTD): the yen was 1.2% weaker at ¥142/$</li>
<li>The news was focused on the sharp drop in the yen with even the BoJ Governor Kuroda noting some undesirable effects</li>
<li>The proportion of female directors rose to 9%, a slight increase over 7.4% in the previous year</li>
</ul>


The Nikkei was up +2.15% over the past week (-2% YTD): the yen was 1.2% weaker at ¥142/$
The news was focused on the sharp drop in the yen with even the BoJ Governor Kuroda noting some undesirable effects
The proportion of female directors rose to 9%, a slight increase over 7.4% in the previous year


Japan Weekly | Renova, Mitsubishi Motors, Mercari

Japan

MITSUBISHI MOTORS CORPORATION develops and manufactures passenger cars and its related parts.  The Company has production facilities in Japan, the US, and Thailand.  Mitsubishi Motors Corp provides vehicle-related financing and leasing service through its subsidiary.

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Mitsubishi Motors (7211 JP)

Renault & Nissan - Capital Manoeuvres In the Dark

Renault and Nissan have been dancing around co-investment in Renault's planned EV spinout company for months, and now CEO de Meo has a Nov 8...

Travis Lundy

Japan Weekly | Mazda, Mit Motors, Subaru

Not a great week for investors in Japanese equities. The market remains under pressure on global macro concerns in addition to poor commentary from...

Mark Chadwick

Mitsubishi Motors (7211) | Take Your Foot off the Gas

Mit Motors has been stellar performer YTD. However, we believe that the 2H could be an uphill battle against rising petrol prices and weakening...

Mark Chadwick

Pullback Complete?; Commodities Heading Lower; Buying Growth/Cyclicals & A Few Utilities

Signs suggest this pullback may have run its course, as several global market indexes & Sectors appear to be making a higher low near logical...

Vermilion Research

Japan Weekly | Renova, Mitsubishi Motors, Mercari

We take a look at the stocks that have performed well or poorly over the past week in the Japanese equity market. This week Renova was the star...

Mark Chadwick

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