Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Thematic (Sector/Industry)

<ul>
<li>2022 was characterised by a historically strong H1 followed by a far weaker H2</li>
<li>The current downturn is impacting memory, PC and smartphone shipments the hardest</li>
<li>2023 is shaping up to be the reverse of 2022, i.e. historically weak H1 with recovery in H2</li>
</ul>


2022 was characterised by a historically strong H1 followed by a far weaker H2
The current downturn is impacting memory, PC and smartphone shipments the hardest
2023 is shaping up to be the reverse of 2022, i.e. historically weak H1 with recovery in H2


Semiconductors: 2022 Review & 2023 Outlook

Japan Specialist

Mark Chadwick

<ul>
<li>OVERSEAS. Strong Beta Close in US Markets, with SPX +1.6%; US 10YR Yield retreated to under 4%; Tech  w/SOX +1.5%, led by BroadCom. +5.7%;  Ford +4% on strong EV demand</li>
<li>JAPAN. NKY Futs +0.9% vs Cash; USDJPY strenthens 135.8;  Expect follow on Beta/Semi bid on Broadcom sentiment lift; Govt to restrain EPCO px Hikes; Renesas, OAL, JAL added to NKY </li>
<li>NUGGET: Advantest looks best positioned to benefit from the emerging boom in Generative AI. </li>
</ul>


OVERSEAS. Strong Beta Close in US Markets, with SPX +1.6%; US 10YR Yield retreated to under 4%; Tech  w/SOX +1.5%, led by BroadCom. +5.7%;  Ford +4% on strong EV demand
JAPAN. NKY Futs +0.9% vs Cash; USDJPY strenthens 135.8;  Expect follow on Beta/Semi bid on Broadcom sentiment lift; Govt to restrain EPCO px Hikes; Renesas, OAL, JAL added to NKY 
NUGGET: Advantest looks best positioned to benefit from the emerging boom in Generative AI. 


Good Morning Japan | Equities - All Good (Again); Strong Tech Bid; EV, AI Drivers; NUGGET: Advantest

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>
<a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661)</a>, <a href="https://www.smartkarma.com/entities/renesas-electronics-corp" target="_blank" data-smartkarma-citation="entities:15933:1" rel="noopener">Renesas Electronics (6723)</a> and <a href="https://www.smartkarma.com/entities/japan-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1184:1" rel="noopener">Japan Airlines (9201)</a> will replace <a href="https://www.smartkarma.com/entities/toyobo-co-ltd" target="_blank" data-smartkarma-citation="entities:6187:1" rel="noopener">Toyobo (3101)</a>, <a href="https://www.smartkarma.com/entities/nippon-light-metal-holdings" target="_blank" data-smartkarma-citation="entities:1485:1" rel="noopener">Nippon Light Metal (5703)</a> and <a href="https://www.smartkarma.com/entities/toho-zinc-co-ltd" target="_blank" data-smartkarma-citation="entities:2796:1" rel="noopener">Toho Zinc (5707)</a> in 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>. </li>
<li>
<a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661 JP)</a> has been added at a post-split PAF of 1. This reduces the passive buying on the stock by around a third.</li>
<li>Passive trackers need to buy between 2.2-6.7 days of ADV on the adds while selling between 5-12 days of ADV on the deletes. There's a big funding trade too.</li>
</ul>



Oriental Land (4661), Renesas Electronics (6723) and Japan Airlines (9201) will replace Toyobo (3101), Nippon Light Metal (5703) and Toho Zinc (5707) in the Nikkei 225 (NKY INDEX). 

Oriental Land (4661 JP) has been added at a post-split PAF of 1. This reduces the passive buying on the stock by around a third.
Passive trackers need to buy between 2.2-6.7 days of ADV on the adds while selling between 5-12 days of ADV on the deletes. There's a big funding trade too.


Nikkei 225 Index Rebalance: Oriental Land, Renesas, JAL IN; Toyobo, Nippon LightMetal, Toho Zinc OUT

<ul>
<li>OVERSEAS. SPX +0.5% in Choppy session; Tech leads as 7/11 sectors rose in a Beta rebound; NDVIA +14% on AI/Chat GPT prospects; All eyes on Friday's PCE Deflator print</li>
<li>JAPAN. NKY Futs +0.4% vs Cash; USDJPY 135 level; Tech to lead after yesterday's holidays; BOJ Gov designate Ueda speaks the Diet today;  Analysts bullish with 11 BUY Upgrades </li>
<li>DAILY NUGGET.  What does Roll-Royce, +24% overnight, say about Japan's IHI(7013) ? The rise in prospects positive for IHI. </li>
</ul>


OVERSEAS. SPX +0.5% in Choppy session; Tech leads as 7/11 sectors rose in a Beta rebound; NDVIA +14% on AI/Chat GPT prospects; All eyes on Friday's PCE Deflator print
JAPAN. NKY Futs +0.4% vs Cash; USDJPY 135 level; Tech to lead after yesterday's holidays; BOJ Gov designate Ueda speaks the Diet today;  Analysts bullish with 11 BUY Upgrades 
DAILY NUGGET.  What does Roll-Royce, +24% overnight, say about Japan's IHI(7013) ? The rise in prospects positive for IHI. 


Good Morning Japan |Choppy US BUT Tech Roars Back with NVIDIA/AI Prospects; Catch up Time in Japan !

<ul>
<li>OVERSEAS.  SPX sees Red for 2nd week; Short yields rise again last week as hot Macro/Fedspeak drive inflation narrative; GM sets sights on Tesla; MSFT AI gets ..well Emotional !</li>
<li>JAPAN. NKY Futs Flat vs Cash; USDJPY 134.15; Expect little from Japan today with US off for President's Day;  Stealth Immigration as JP loosens up..barely;Deere 2023 outlook Negative Kubota</li>
<li>DAILY NUGGET.  Kubota +15% from the bottom but comments from Deere +7.5% on Small Tractors not supportive.</li>
</ul>


OVERSEAS.  SPX sees Red for 2nd week; Short yields rise again last week as hot Macro/Fedspeak drive inflation narrative; GM sets sights on Tesla; MSFT AI gets ..well Emotional !
JAPAN. NKY Futs Flat vs Cash; USDJPY 134.15; Expect little from Japan today with US off for President's Day;  Stealth Immigration as JP loosens up..barely;Deere 2023 outlook Negative Kubota
DAILY NUGGET.  Kubota +15% from the bottom but comments from Deere +7.5% on Small Tractors not supportive.


Good Morning Japan | Equities See Red as Yields Rise; MSFT AI Goes Wild! Tesla in GM's EV Crosshairs

Japan

Tokyo Electron Limited manufactures and sells industrial electronics products, such as semiconductor manufacturing machines, computer system, and electronic components.  The Company products are sold in US, Taiwan, and others as well as in Japan.

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Tokyo Electron (8035 JP)

Semiconductors: 2022 Review & 2023 Outlook

2023 is shaping up to be the reverse of 2022, i.e. downturn continuing through H1 with recovery in H2. A lot depends on when PC and smartphone unit...

William Keating

Good Morning Japan | Equities - All Good (Again); Strong Tech Bid; EV, AI Drivers; NUGGET: Advantest

Strong close to US on Friday lead by Tech; In Japan. expect follow on Beta/Semi bid on Broadcom sentiment lift; Govt to restrain EPCO px Hikes;...

Mark Chadwick

Nikkei 225 Index Rebalance: Oriental Land, Renesas, JAL IN; Toyobo, Nippon LightMetal, Toho Zinc OUT

There are 3 adds and 3 deletes in March - mostly on expected line. The inclusion of Oriental Land at a lower than expected PAF could see some...

Brian Freitas

Good Morning Japan |Choppy US BUT Tech Roars Back with NVIDIA/AI Prospects; Catch up Time in Japan !

Tech to lead after yesterday's holidays; BOJ Gov designate Ueda speaks the Diet today; Analysts bullish with 11 BUY Upgrades

Mark Chadwick

Good Morning Japan | Equities See Red as Yields Rise; MSFT AI Goes Wild! Tesla in GM's EV Crosshairs

US Equitie down again as Inflation narrative takes root; MSFT AI goes wild; Expect little from Japan with US President's Day; JP Stealth...

Mark Chadwick

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