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>Our outlook remains bullish on global equities (MSCI ACWI) with ACWI-US and the S&amp;P 500 holding above their respective bases at $117 and 5650-5670.</li>
<li>As long as these base supports hold, we would use any election-related pullback as an opportunity to add exposure.</li>
<li>Following the election, we see a high probability of significant upside going into year-end.</li>
</ul>


Our outlook remains bullish on global equities (MSCI ACWI) with ACWI-US and the S&amp;P 500 holding above their respective bases at $117 and 5650-5670.
As long as these base supports hold, we would use any election-related pullback as an opportunity to add exposure.
Following the election, we see a high probability of significant upside going into year-end.


Bullish Outlook Intact on MSCI ACWI & SPX; Buys in Services, Technology, Discretionary, Gold Miners

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>There are a bunch of stocks that have underperformed the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> and their peers and could be deleted from global passive portfolios in August.</li>
<li>The deletion from passive portfolios will lead to a liquidity event at the end of August where passive trackers will need to sell multiple days of ADV.</li>
<li>Shorts have been built up on all the stocks over the last few months and the extent of the positioning varies across stocks.</li>
</ul>


There are a bunch of stocks that have underperformed the Nikkei 225 (NKY INDEX) and their peers and could be deleted from global passive portfolios in August.
The deletion from passive portfolios will lead to a liquidity event at the end of August where passive trackers will need to sell multiple days of ADV.
Shorts have been built up on all the stocks over the last few months and the extent of the positioning varies across stocks.


Japan - Yet Another Big Round of Passive Selling Expected in August

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>Bain has <a href="https://www.baincapital.co.jp/sites/default/files/2024-10/BC_PR_29102024.pdf" target="_blank" rel="noopener">updated</a> its <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a> tender documents, which mostly outline previously disclosed information. The update could be a prerequisite for Board recommendation. </li>
<li>Bain’s refusal to waive the precondition pushes the Board to recommend both offers. KKR seems uninterested in negotiations or bumping its offer but will have to concede on one.</li>
<li>The final bid is likely Bain's offer, regardless of whether Bain walks (KKR needs to bump as significant volume has traded above its terms) or launches (KKR partners with Bain).</li>
</ul>


Bain has updated its Fuji Soft Inc (9749 JP) tender documents, which mostly outline previously disclosed information. The update could be a prerequisite for Board recommendation. 
Bain’s refusal to waive the precondition pushes the Board to recommend both offers. KKR seems uninterested in negotiations or bumping its offer but will have to concede on one.
The final bid is likely Bain's offer, regardless of whether Bain walks (KKR needs to bump as significant volume has traded above its terms) or launches (KKR partners with Bain).


Fuji Soft (9749 JP): Bain Updates as the End Game Draws Closer

<ul>
<li>At the October rebalance, there are 970 stocks that will have a lower FFW while 114 stocks will have a higher FFW. 493 stocks will undergo a Phased Weight Reduction.</li>
<li>Estimated one-way turnover is 2.54% resulting in a one-way trade of ¥1.815tn. 500 stocks have over 4 days ADV to trade, 100 stocks have over 9 days ADV to trade.</li>
<li>Setting the threshold at +/-US$50m to trade, the stocks with inflows have outperformed the stocks with outflows by 6.5% over the last four months.</li>
</ul>


At the October rebalance, there are 970 stocks that will have a lower FFW while 114 stocks will have a higher FFW. 493 stocks will undergo a Phased Weight Reduction.
Estimated one-way turnover is 2.54% resulting in a one-way trade of ¥1.815tn. 500 stocks have over 4 days ADV to trade, 100 stocks have over 9 days ADV to trade.
Setting the threshold at +/-US$50m to trade, the stocks with inflows have outperformed the stocks with outflows by 6.5% over the last four months.


TOPIX October Rebalance: BIG One With ¥1.8tn a Side to Trade

Nec Networks & System Integr / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nec-networks-system-integr" target="_blank" data-smartkarma-citation="entities:16396:1" rel="noopener">Nec Networks &amp; System Integr (1973 JP)</a> has recommended a tender offer from <a href="https://www.smartkarma.com/entities/nec-corp" target="_blank" data-smartkarma-citation="entities:17084:1" rel="noopener">NEC Corp (6701 JP)</a> at JPY3,250, 21.5% premium to the undisturbed price of JPY2,675 (28 October).</li>
<li>The tender offer runs from 30 October to 11 December (30 business days), with payment commencing from 18 December. The offer represents an all-time high. </li>
<li>While below the midpoint IFA DCF range, the offer is attractive vs peer multiples and historical trading ranges. This is a done deal. </li>
</ul>



Nec Networks &amp; System Integr (1973 JP) has recommended a tender offer from NEC Corp (6701 JP) at JPY3,250, 21.5% premium to the undisturbed price of JPY2,675 (28 October).
The tender offer runs from 30 October to 11 December (30 business days), with payment commencing from 18 December. The offer represents an all-time high. 
While below the midpoint IFA DCF range, the offer is attractive vs peer multiples and historical trading ranges. This is a done deal. 


NESIC (1973 JP): NEC (6701 JP)’s JPY3,250 Tender Offer

Japan

TIS Inc is established through reorganization.  The Company provides network solutions and system integration services.  IT Holdings also engages in development, implementation, and maintenance of application software besides selling computer and computer peripheral equipment.

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TIS (3626 JP)

Bullish Outlook Intact on MSCI ACWI & SPX; Buys in Services, Technology, Discretionary, Gold Miners

Bullish Outlook Intact on MSCI $ACWI and $SPX as they hold above their respective bases at $117 and 5650-5670; Buys in Services, Technology,...

Vermilion Research

Japan - Yet Another Big Round of Passive Selling Expected in August

There are a bunch of stocks in Japan that could be sold by passive global investors in August. Shorts have increased on all stocks and the extent...

Brian Freitas

Fuji Soft (9749 JP): Bain Updates as the End Game Draws Closer

The final bid is likely Bain's offer, regardless of whether Bain walks (KKR needs to bump as significant volume has traded above its terms) or...

Arun George

TOPIX October Rebalance: BIG One With ¥1.8tn a Side to Trade

Lower FFWs on 970 stocks and higher FFWs on 114 stocks will result in one-way turnover of 2.52% leading to a one-way trade of ¥1.8tn at the close...

Brian Freitas

NESIC (1973 JP): NEC (6701 JP)’s JPY3,250 Tender Offer

While below the midpoint IFA DCF range, the offer is attractive vs peer multiples and historical trading ranges. This is a done deal.

Arun George

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