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>The bear market rally that we were on watch for started last week, confirmed by the bullish reversals on the DAX, Hang Seng, MSCI China (MCHI-US), and China Internet (KWEB-US).</li>
<li>Is this just another bear market rally, or will indexes are able to make a higher low and start a new bull market? Either way, it's a start.</li>
<li>We highlight attractive stocks from a bottoms-up perspective, spanning several Sectors. Over half hail from Japan, where the TOPIX Small index is reversing its downtrend.</li>
</ul>


The bear market rally that we were on watch for started last week, confirmed by the bullish reversals on the DAX, Hang Seng, MSCI China (MCHI-US), and China Internet (KWEB-US).
Is this just another bear market rally, or will indexes are able to make a higher low and start a new bull market? Either way, it's a start.
We highlight attractive stocks from a bottoms-up perspective, spanning several Sectors. Over half hail from Japan, where the TOPIX Small index is reversing its downtrend.


Cautiously Optimistic Following Downtrend Reversals; Japan Continues to Lead; Bottoms-Up Stock Rec's

Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

<ul>
<li>I would like to discuss the points about the Nikkei article "Companies should do their best to prevent harmful effects of parent-subsidiary listings."</li>
<li>Recently, more and more companies are evaluating their businesses from the perspective of ROE and ROIC. This is thought to be gradually eliminating parent-subsidiary listings.</li>
<li>Rather than hoping to eliminate parent-subsidiary listings by strengthening TSE rules, it's more important to instill in companies a management philosophy on how to achieve long-term growth in corporate value.</li>
</ul>


I would like to discuss the points about the Nikkei article "Companies should do their best to prevent harmful effects of parent-subsidiary listings."
Recently, more and more companies are evaluating their businesses from the perspective of ROE and ROIC. This is thought to be gradually eliminating parent-subsidiary listings.
Rather than hoping to eliminate parent-subsidiary listings by strengthening TSE rules, it's more important to instill in companies a management philosophy on how to achieve long-term growth in corporate value.


The Key to Dissolving Parent-Subsidiary Listings Is More Than Tighter TSE Rules

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

NTT (Nippon Telegraph & Telephone) / Event-Driven

<ul>
<li>The second tranche of the FFW methodology change for the <a href="https://www.smartkarma.com/entities/tokyo-stock-exchange-tokyo-price-index-topix" target="_blank" data-smartkarma-citation="entities:22910:1" rel="noopener">Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX)</a> will be implemented at the close of trading today.</li>
<li>One way flow is ~JPY 745bn and will be spread across ~2170 stocks. The largest inflow will be on <a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (9432 JP)</a> and the largest outflow on <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203)</a>.</li>
<li>The stocks with the largest inflows have outperformed the stocks with the largest outflows over the last month and the outperformance could continue going into the last tranche in June.</li>
</ul>


The second tranche of the FFW methodology change for the Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX) will be implemented at the close of trading today.
One way flow is ~JPY 745bn and will be spread across ~2170 stocks. The largest inflow will be on NTT (9432 JP) and the largest outflow on Toyota Motor (7203).
The stocks with the largest inflows have outperformed the stocks with the largest outflows over the last month and the outperformance could continue going into the last tranche in June.


<ul>
<li>I will discuss the Nikkei article, "Shareholder proposals on ESG issues may increase in Japan, but the road to their passage will not be easy and should be watched closely."</li>
<li>Japanese asset management companies have begun to move toward ESG compliance. However, a survey conducted by FSA indicated that many asset management companies don't have personnel specializing in ESG issues.</li>
<li>The key to getting shareholder proposals on ESG passed or for a company to become more active in ESG initiatives is for foreign shareholder ratio to be in 30% range.</li>
</ul>


I will discuss the Nikkei article, "Shareholder proposals on ESG issues may increase in Japan, but the road to their passage will not be easy and should be watched closely."
Japanese asset management companies have begun to move toward ESG compliance. However, a survey conducted by FSA indicated that many asset management companies don't have personnel specializing in ESG issues.
The key to getting shareholder proposals on ESG passed or for a company to become more active in ESG initiatives is for foreign shareholder ratio to be in 30% range.


<ul>
<li>I will discuss the Nikkei article that "companies that don't meet the prime market listing criteria but remain in the prime market under transitional measures should increase their corporate value."</li>
<li>It goes without saying that increasing corporate value is the way to increase market capitalization. However, whether the company's methodology is reasonable in the "plan" should be fully discussed.</li>
<li>TSE should proceed with discussions to expand the market to high quality companies that will regain profitability and growth potential, without limiting it to companies to which transitional measures apply.</li>
</ul>


I will discuss the Nikkei article that "companies that don't meet the prime market listing criteria but remain in the prime market under transitional measures should increase their corporate value."
It goes without saying that increasing corporate value is the way to increase market capitalization. However, whether the company's methodology is reasonable in the "plan" should be fully discussed.
TSE should proceed with discussions to expand the market to high quality companies that will regain profitability and growth potential, without limiting it to companies to which transitional measures apply.


Japan

The TOPIX, also known as the Tokyo Stock Price Index, is a capitalization-weighted index of all companies listed on the First Section of the Tokyo Stock Exchange. The index is supplemented by the subindices of the 33 industry sectors. The index calculation excludes temporary issues and preferred stocks, and has a base value of 100 as of January 4, 1968.

TSE Tokyo Price Index TOPIX (TPX INDEX)

Cautiously Optimistic Following Downtrend Reversals; Japan Continues to Lead; Bottoms-Up Stock Rec's

The bear market rally that we were on watch for started last week, confirmed by the bullish reversals on the DAX, Hang Seng, MSCI China $MCHI, and...

Vermilion Research

The Key to Dissolving Parent-Subsidiary Listings Is More Than Tighter TSE Rules

I would like to discuss the points about the Nikkei article "Companies should do their best to prevent harmful effects of parent-subsidiary listings."

Metrical Inc

TOPIX Rebalance: Flows at the Close

The second tranche of the FFW methodology change for the TOPIX Index will be implemented at the close of trading today. One way flow is ~JPY 745bn...

Brian Freitas

About an Article on ESG Investors

I would like to discuss the Nikkei article, "Shareholder proposals on ESG issues may increase in Japan, but the road to their passage will not be...

Metrical Inc

About an Article on TSE Prime Market

I would like to discuss the Nikkei article that "295 Companies Fail to Meet TSE Prime Market Standards, 3 Solutions to Improve Value."

Metrical Inc