Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Equity Bottom-Up

Kawasaki Heavy Industries / Equity Bottom-Up

<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

Thematic (Sector/Industry)

<ul>
<li>Echoes of August with Japan looking to start the day very weak on the lead from US semi related.</li>
<li>Expect heavy selling for recent retail margin favourites e.g. Mercari, IHI, KHI and Socionext, and SPE winners such as Kokusai and Advantest, although the sector will start under heavy pressure.</li>
<li>Nothing from Nikkei Inc. yet on their NKY225 rebalance decision, but expect outsized volatility today with many multi-strategy pods shuttered during the August sell off.</li>
</ul>


Echoes of August with Japan looking to start the day very weak on the lead from US semi related.
Expect heavy selling for recent retail margin favourites e.g. Mercari, IHI, KHI and Socionext, and SPE winners such as Kokusai and Advantest, although the sector will start under heavy pressure.
Nothing from Nikkei Inc. yet on their NKY225 rebalance decision, but expect outsized volatility today with many multi-strategy pods shuttered during the August sell off.


Japan Morning Connection: Expect Volatility with Retail and SPE Stocks Under Pressure

<ul>
<li>Good retailer numbers and outlooks by Target and TJX setting a positive tone for the likes of Mercari on the read for consumer spending.</li>
<li>Toll Bros numbers from the day before lifting US Homebuilders should see the likes of <a href="https://www.smartkarma.com/entities/sumitomo-forestry-co-ltd" target="_blank" rel="noopener">Sumitomo Forestry</a> rebound off yesterdays weak price action.</li>
<li>Japanese R/E names look increasingly vulnerable to downside ahead of Ueda's speech tomorrow which should point to a BoJ trajectory for future rate hikes.</li>
</ul>


Good retailer numbers and outlooks by Target and TJX setting a positive tone for the likes of Mercari on the read for consumer spending.
Toll Bros numbers from the day before lifting US Homebuilders should see the likes of Sumitomo Forestry rebound off yesterdays weak price action.
Japanese R/E names look increasingly vulnerable to downside ahead of Ueda's speech tomorrow which should point to a BoJ trajectory for future rate hikes.


Japan Morning Connection: Mercari, Sumitomo Forestry, Anritsu

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

<ul>
<li>The Japanese Financial Services Agency has asked the general insurers to reduce/eliminate their cross-shareholdings.</li>
<li>
<a href="https://www.smartkarma.com/entities/ms-ad-insurance-group-holdings" target="_blank" data-smartkarma-citation="entities:631:1" rel="noopener">MS&amp;AD Insurance (8725 JP)</a> had a stake over US$100m in at least 29 listed Japanese stocks, amounting to a total of US$17.4bn.</li>
<li>In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.</li>
</ul>


The Japanese Financial Services Agency has asked the general insurers to reduce/eliminate their cross-shareholdings.

MS&amp;AD Insurance (8725 JP) had a stake over US$100m in at least 29 listed Japanese stocks, amounting to a total of US$17.4bn.
In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.


MS&AD Cross-Shareholding - At Least US$20bn of Cross-Shareholding to Sell

CEO, Helixtap

Farah Miller

Global Commodities Alternative Data and Insights

Helixtap

Helixtap collects, processes and distributes proprietary data, analyses and forecasts for the rubber, latex and automotive markets

Commodities

<ul><li> Tire volumes of top brands decreasing, and looks like it will continue to do so   </li><li> Premium tire makers are focusing on high rim diameter (HRD) due to commoditization in standard tire segment   </li><li> Sumitomo, Bridgestone, Yokohama and others have all chosen to limit their truck tire businesses in China, and domestic tire brands have filled in the gap </li></ul>

 Tire volumes of top brands decreasing, and looks like it will continue to do so    Premium tire makers are focusing on high rim diameter (HRD) due to commoditization in standard tire segment    Sumitomo, Bridgestone, Yokohama and others have all chosen to limit their truck tire businesses in China, and domestic tire brands have filled in the gap 

Tire Majors Losing Share To Lesser Brands

Japan

Sumitomo Realty & Development Co., Ltd. develops, manages, and sells houses and condominiums.  The Company also develops and manages real estates in overseas. Sumitomo Realty & Development undertakes infrastructure projects, manages real estate properties, and provides financing services to its customers.  The Company operates fitness clubs and restaurants as well.

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Sumitomo Realty & Developmen (8830 JP)

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

Japan Morning Connection: Expect Volatility with Retail and SPE Stocks Under Pressure

Japan's market set to open weak following US semi-related lead, heavy selling expected for retail margin favorites and SPE winners, potential...

Andrew Jackson

Japan Morning Connection: Mercari, Sumitomo Forestry, Anritsu

Positive retail numbers from Target and TJX bode well for consumer spending, while Toll Bros' strong performance lifts Homebuilders. Japanese R/E...

Andrew Jackson

MS&AD Cross-Shareholding - At Least US$20bn of Cross-Shareholding to Sell

Along with its results announcement today, MS&AD announced that it will accelerate its cross-shareholding unwind and is targeting a sale of around...

Sumeet Singh

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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

Japan Morning Connection: Expect Volatility with Retail and SPE Stocks Under Pressure

​Japan's market set to open weak following US semi-related lead, heavy selling expected for retail margin favorites and SPE winners, potential...

Andrew Jackson

Japan Morning Connection: Mercari, Sumitomo Forestry, Anritsu

​Positive retail numbers from Target and TJX bode well for consumer spending, while Toll Bros' strong performance lifts Homebuilders. Japanese R/E...

Andrew Jackson

MS&AD Cross-Shareholding - At Least US$20bn of Cross-Shareholding to Sell

Along with its results announcement today, MS&AD announced that it will accelerate its cross-shareholding unwind and is targeting a sale of around...

Sumeet Singh

Tire Majors Losing Share To Lesser Brands

Over the last few years – and especially since Covid – we have seen tire volumes at the top brands decreasing, while the lesser brands are rapidly...

Helixtap

Japan's market set to open weak following US semi-related lead, heavy selling expected for retail margin favorites and SPE winners, potential...

Positive retail numbers from Target and TJX bode well for consumer spending, while Toll Bros' strong performance lifts Homebuilders. Japanese R/E...