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>Broad global MSCI equity indexes (ACWI,ACWI ex-U.S.,EAFE, and EM) remain bearish with YTD downtrends intact. Until these indexes reverse downtrends, we are bearish and view bounces as bear market rallies.</li>
<li>Major non-U.S. countries appear to be much further along in the bottoming process, a potential sign that U.S. indexes could take a back seat once global equities finally bottom.</li>
<li>Indexes that have not made a new low since March: Nikkei 225, TOPIX, TOPIX Small, Hang Seng, Europe’s EURO STOXX 50, and China's MSCI China (MCHI-US) and China Internet (KWEB-US).</li>
</ul>


Broad global MSCI equity indexes (ACWI,ACWI ex-U.S.,EAFE, and EM) remain bearish with YTD downtrends intact. Until these indexes reverse downtrends, we are bearish and view bounces as bear market rallies.
Major non-U.S. countries appear to be much further along in the bottoming process, a potential sign that U.S. indexes could take a back seat once global equities finally bottom.
Indexes that have not made a new low since March: Nikkei 225, TOPIX, TOPIX Small, Hang Seng, Europe’s EURO STOXX 50, and China's MSCI China (MCHI-US) and China Internet (KWEB-US).


Hang Seng, MSCI China Near Major Base Breakouts; Bottoms-Up Stock Rec's in Hong Kong, China, & Japan

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 Nikkei article, "Japanese asset management companies have decided to steer against a proposal to elect directors for companies that do not have female directors.</li>
<li>The reason why major Japanese investment managers have been reluctant to take action on diversity and governance is likely due to the sales policies of their parent companies,</li>
<li>Companies with higher percentage of women directors the boards have higher stock prices. I would like to encourage both investment managers and companies to accelerate their efforts in the future.</li>
</ul>


I would like to discuss the Nikkei article, "Japanese asset management companies have decided to steer against a proposal to elect directors for companies that do not have female directors.
The reason why major Japanese investment managers have been reluctant to take action on diversity and governance is likely due to the sales policies of their parent companies,
Companies with higher percentage of women directors the boards have higher stock prices. I would like to encourage both investment managers and companies to accelerate their efforts in the future.


The Adoption of the Presence of Female Directors as a Criterion for Voting Was Finally a First Step

<ul>
<li>I would like to discuss the Nikkei article titled "EY Survey Legal Managers on Awareness of Sustainable Society."</li>
<li>The survey also included responses from Japanese companies, stating that "many legal departments in Japanese companies do not have sufficient systems in place to deal with ESG and other issues.</li>
<li>The question is how seriously management is discussing how to deal with these issues, as many Japanese companies do not have sufficient human resources, not only in their legal departments. </li>
</ul>


I would like to discuss the Nikkei article titled "EY Survey Legal Managers on Awareness of Sustainable Society."
The survey also included responses from Japanese companies, stating that "many legal departments in Japanese companies do not have sufficient systems in place to deal with ESG and other issues.
The question is how seriously management is discussing how to deal with these issues, as many Japanese companies do not have sufficient human resources, not only in their legal departments. 


Challenge Is How to Promote Sustainability in a Japanese Company that Has Inadequate Human Resources

<ul>
<li>I would like to discuss about the Nikkei article that says "The number of global ESG funds investing in Japanese equities is low.</li>
<li>The actual substance of their initiatives hasn't reached certain level, their information disclosure is insufficient for overseas investors, and their investment returns are inferior to those of other portfolio companies.</li>
<li>These improvements can be made by the managers themselves. However, ironically, greenwashing has not been an issue in Japan due to the lack of proactive disclosure of ESG-related information.</li>
</ul>


I would like to discuss about the Nikkei article that says "The number of global ESG funds investing in Japanese equities is low.
The actual substance of their initiatives hasn't reached certain level, their information disclosure is insufficient for overseas investors, and their investment returns are inferior to those of other portfolio companies.
These improvements can be made by the managers themselves. However, ironically, greenwashing has not been an issue in Japan due to the lack of proactive disclosure of ESG-related information.


"Global ESG Funds Invest Less in Japanese Equities." Why Is This?

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 third 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 on 29 June.</li>
<li>One-Way flow is ~JPY 742bn 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 JP)</a>.</li>
<li>Stocks with the largest impact of inflows have outperformed stocks with the largest impact of outflows, but there has been underperformance over the last couple of weeks.</li>
</ul>


The third 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 on 29 June.
One-Way flow is ~JPY 742bn and will be spread across 2170 stocks. The largest inflow will be on NTT (9432 JP) and the largest outflow on Toyota Motor (7203 JP).
Stocks with the largest impact of inflows have outperformed stocks with the largest impact of outflows, but there has been underperformance over the last couple of weeks.


TOPIX Rebalance: Flows at the Close on 29 June

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)

Hang Seng, MSCI China Near Major Base Breakouts; Bottoms-Up Stock Rec's in Hong Kong, China, & Japan

Hong Kong's Hang Seng and China's $MCHI and $KWEB are near major base breakouts. We are watching is 22,700 on Hang Seng and $56.60 on MCHI; we are...

Vermilion Research

The Adoption of the Presence of Female Directors as a Criterion for Voting Was Finally a First Step

I would like to discuss the Nikkei article, "Japanese asset management companies have decided to steer against a proposal to elect directors for...

Metrical Inc

Challenge Is How to Promote Sustainability in a Japanese Company that Has Inadequate Human Resources

I would like to discuss what challenges there are for Japanese companies with regard to the Nikkei article titled "Global Survey on the Status of...

Metrical Inc

"Global ESG Funds Invest Less in Japanese Equities." Why Is This?

I would like to discuss about the Nikkei article that says "The number of global ESG funds investing in Japanese equities is low.

Metrical Inc

TOPIX Rebalance: Flows at the Close on 29 June

The third and final tranche of the FFW methodology change for the TOPIX Index will be implemented at the close of trading on 29 June. One way flow...

Brian Freitas