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

S&P BSE SENSEX Index / Technical Analysis

<ul>
<li>Many major indexes are still testing (and holding above) critical supports. This includes MSCI ACWI (ACWI-US), TOPIX/TOPIX Small/Nikkei 225, EURO STOXX 50, STOXX Europe 600, and the DAX</li>
<li>Our overall outlook remains neutral, and we continue to see many attractive buying opportunities, especially out of Japan, India, and a new one -- Brazil.</li>
<li>Buy ideas focus on the Consumer Discretionary and Financials Sectors, with the vast majority of stock recommendations from Japan, India, and Brazil</li>
</ul>


Many major indexes are still testing (and holding above) critical supports. This includes MSCI ACWI (ACWI-US), TOPIX/TOPIX Small/Nikkei 225, EURO STOXX 50, STOXX Europe 600, and the DAX
Our overall outlook remains neutral, and we continue to see many attractive buying opportunities, especially out of Japan, India, and a new one -- Brazil.
Buy ideas focus on the Consumer Discretionary and Financials Sectors, with the vast majority of stock recommendations from Japan, India, and Brazil


Europe, Japan, $ACWI Testing Critical Supports; Rising DXY, Global Sovereign Yields a Major Headwind

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>In my previous analysis, I found that firms with high frequency of share repurchase cancellations increased their market capitalization during the relevant period (12/2021-1/2022).</li>
<li>Even though the short-term share price performances of companies that announced share repurchases were mixed, the share prices of companies with track record of several share repurchases have risen.</li>
<li>It takes certain amount of time for investors to understand the track record and the capital allocation policy is consistent with the goal of increasing corporate value over the-long run.</li>
</ul>


In my previous analysis, I found that firms with high frequency of share repurchase cancellations increased their market capitalization during the relevant period (12/2021-1/2022).
Even though the short-term share price performances of companies that announced share repurchases were mixed, the share prices of companies with track record of several share repurchases have risen.
It takes certain amount of time for investors to understand the track record and the capital allocation policy is consistent with the goal of increasing corporate value over the-long run.


Effective Share-Buyback Require Proven Track Record and Communication to Gain Investor Understanding

<ul>
<li>The adoption of female directors is growing as Japanese investment managers follow the movement among overseas investment managers to oppose proposals for election of directors for companies without female directors.</li>
<li>In Japanese companies, where peer pressure is strong, it is doubtful that the opinions of about 10% female directors can be fully reflected in the discussions and conclusions.</li>
<li>Non-Japanese directors who don’t succumb to Japan's culture of peer pressure is even smaller, and Japanese companies will be at risk if they determine management strategy without diverse values.</li>
</ul>


The adoption of female directors is growing as Japanese investment managers follow the movement among overseas investment managers to oppose proposals for election of directors for companies without female directors.
In Japanese companies, where peer pressure is strong, it is doubtful that the opinions of about 10% female directors can be fully reflected in the discussions and conclusions.
Non-Japanese directors who don’t succumb to Japan's culture of peer pressure is even smaller, and Japanese companies will be at risk if they determine management strategy without diverse values.


The Issue of Board Diversity Is Being Asked Anew

<ul>
<li>While 90% of the companies listed on the prime market translate some documents into English, very few companies listed on other markets translate their disclosure documents into English.</li>
<li>There is a mismatch between the documents that prime market listed companies translate into English and the documents that overseas institutional investors require to be translated into English.</li>
<li>Few companies with high foreign ownerships have translated their annual securities reports, convocation notices (business reports) and corporate governance reports into English, which overseas investors need to translate into English.</li>
</ul>


While 90% of the companies listed on the prime market translate some documents into English, very few companies listed on other markets translate their disclosure documents into English.
There is a mismatch between the documents that prime market listed companies translate into English and the documents that overseas institutional investors require to be translated into English.
Few companies with high foreign ownerships have translated their annual securities reports, convocation notices (business reports) and corporate governance reports into English, which overseas investors need to translate into English.


Mismatch Between Documents Needed by Foreign Investors and Those Translated in English by Companies

<ul>
<li>The inclusion of the requirement to use e-voting platforms in the Corporate Governance Code has led to increasing number of companies using e-voting platforms.</li>
<li>The number of participating companies has increased from 1,540 in March to 1,737 in August. Of the companies participating in e-voting platform, 92% are listed companies in the prime market.</li>
<li>It is only to be hoped that in the future, companies will focus on improving communication between shareholders and management at general shareholders' meetings.</li>
</ul>


The inclusion of the requirement to use e-voting platforms in the Corporate Governance Code has led to increasing number of companies using e-voting platforms.
The number of participating companies has increased from 1,540 in March to 1,737 in August. Of the companies participating in e-voting platform, 92% are listed companies in the prime market.
It is only to be hoped that in the future, companies will focus on improving communication between shareholders and management at general shareholders' meetings.


It Is Hoped that the Content of Shareholder Meetings Will Be Enhanced in the Future

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)

Europe, Japan, $ACWI Testing Critical Supports; Rising DXY, Global Sovereign Yields a Major Headwind

Europe $STOXX 50, Japan $TOPIX $Nikkei 225, $ACWI Testing Critical Supports; Rising $DXY, Global Sovereign Yields Remain Major Headwinds for global...

Vermilion Research

The Issue of Board Diversity Is Being Asked Anew

I would like to discuss the issues regarding the Nikkei article, "Outside Director Nominees, Women, etc., Competing for the Top Spot, Concerns Over...

Metrical Inc

Mismatch Between Documents Needed by Foreign Investors and Those Translated in English by Companies

The TSE disclosed the Survey of the Status of Disclosure in English as of the end of July 2022 on August 3, 2022, and I would like to discuss the...

Metrical Inc

It Is Hoped that the Content of Shareholder Meetings Will Be Enhanced in the Future

I would like to discuss the issues regarding the Nikkei article, "Online voting exceeded written voting for the first time at the June...

Metrical Inc

Europe, Japan, $ACWI Testing Critical Supports; Rising DXY, Global Sovereign Yields a Major Headwind

Europe $STOXX 50, Japan $TOPIX $Nikkei 225, $ACWI Testing Critical Supports; Rising $DXY, Global Sovereign Yields Remain Major Headwinds for global...

Vermilion Research

Effective Share-Buyback Require Proven Track Record and Communication to Gain Investor Understanding

I would like to discuss the issues on the Nikkei article that states, "Although many companies announce share repurchases, not all of them increase...

Metrical Inc

The Issue of Board Diversity Is Being Asked Anew

I would like to discuss the issues regarding the Nikkei article, "Outside Director Nominees, Women, etc., Competing for the Top Spot, Concerns Over...

Metrical Inc

Mismatch Between Documents Needed by Foreign Investors and Those Translated in English by Companies

The TSE disclosed the Survey of the Status of Disclosure in English as of the end of July 2022 on August 3, 2022, and I would like to discuss the...

Metrical Inc

It Is Hoped that the Content of Shareholder Meetings Will Be Enhanced in the Future

I would like to discuss the issues regarding the Nikkei article, "Online voting exceeded written voting for the first time at the June...

Metrical Inc