ESG Research Specialist, Lightbulb Capital

Simon Peladeau

ESG Research Specialist

Lightbulb Capital

According to the Japan Sustainable Investment Forum (JSIF), the total sustainable investment market in Japan is measured at US$1.28 trillion, up from US$7.0 billion in 2014. The dramatic growth can be explained by the combination of Japan’s governance and stewardship codes, and an enhanced focus on ESG integration from the world’s largest pension fund (GPIF). This has contributed to a 58% increase in dividends since 2014.

According to the Japan Sustainable Investment Forum (JSIF), the total sustainable investment market in Japan is measured at US$1.28 trillion, up from US$7.0 billion in 2014. The dramatic growth can be explained by the combination of Japan’s governance and stewardship codes, and an enhanced focus on ESG integration from the world’s largest pension fund (GPIF). This has contributed to a 58% increase in dividends since 2014.

A Look into Japan’s Surge in ESG-Focused Assets Under Management

Managing Director, MTS Research

Peter Beuttell

Managing Director

MTS Research

MTS Research Limited is an independent investment research company specialising in technical analysis. 

MTS Research provides technical analysis services in the form of regular publications and consultancy advice, catering for a number of different investment approaches from absolute or relative returns to long-only and long/short.  The company has a global client base of blue-chip financial institutions ranging in size and stretching from Los Angeles to Tokyo, via New York, London, Frankfurt and Hong Kong.  

MTS was founded in 1989 at the request of Morgan Grenfell Investment Services Limited (MGIS), the ERISA arm of Morgan Grenfell Asset Management (subsequently Deutsche Asset Management), by Peter Beuttell, a Portfolio Manager at MGIS between 1987 and 1989. 

Peter is a qualified Chartered Accountant and self-taught market technician with over 30 years experience.  At MGIS, Peter managed money in European, Australasian and Far East markets for US clients, such as American Airlines and American Petrofina.  He achieved first quartile perfomance on their behalf by blending fundamental and technical analysis in his investment decision-making.  

After an initial focus on the EAFE markets (Europe, Australasia and Far East), the company has recently expanded its coverage to include the Americas, thanks to the recently-completed two-year Knowledge Transfer Partnership with the University of Plymouth.  The resulting software – the Technical Overlay Program (TOP) – allows fund managers to access an immediate Technical view on any market, sector, stock, bond yield, currency or commodity within their selected universe.

MTS Research consists of a team of five based in Penzance and London. 

Technical Analysis

The markets’ response to the February sell-off has been poor, producing in many cases what looks like a bear market rally.  Europe in particular contains a number of toppy patterns, which have begun to break downwards, and the sharp drop in the FANG stocks could also be part of top-building.  We came into 2018 looking for the end of the post-2009 bull market, and a number of indices are signalling just that.

The markets’ response to the February sell-off has been poor, producing in many cases what looks like a bear market rally.  Europe in particular contains a number of toppy patterns, which have begun to break downwards, and the sharp drop in the FANG stocks could also be part of top-building.  We came into 2018 looking for the end of the post-2009 bull market, and a number of indices are signalling just that.

S&P 500: A Dozen Reasons for Not Being Too Complacent Here

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Thematic (Sector/Industry)

As discussed in <a href="https://www.smartkarma.com/insights/tuesday-and-wednesday-big-days-for-japan" target="_blank" data-smartkarma-citation="insights:18815">Tuesday and Wednesday - Big Days for Japan</a> and <a href="https://www.smartkarma.com/insights/your-scorecard-for-tuesday-wednesday-in-japan" target="_blank" data-smartkarma-citation="insights:18844">Your Scorecard for Tuesday &amp; Wednesday in Japan</a>, there is a significant phenomenon in Japan around what happened today and what happens tomorrow. This was discussed in an outright manner in the first two pieces. This brief followup shows how there is slight rotation during these two days.The first set of tables showed that after Tuesday and Wednesday, there was a pullback in performance as well in the few days afterward historically.But there's a trick there.

As discussed in Tuesday and Wednesday - Big Days for Japan and Your Scorecard for Tuesday &amp; Wednesday in Japan, there is a significant phenomenon in Japan around what happened today and what happens tomorrow. This was discussed in an outright manner in the first two pieces. This brief followup shows how there is slight rotation during these two days.The first set of tables showed that after Tuesday and Wednesday, there was a pullback in performance as well in the few days afterward historically.But there's a trick there.

Tuesday Done, Wednesday Coming. Watch Passive Tracking Vs Non-Passive Tracking Indices

TSE Tokyo Price Index TOPIX / Technical Analysis

The area around Topix1,680 was viewed as critical after February's drop, and has given way today. At least a 50-62% retracement of the advance off the mid-2016 low is probably in progress, signalling a drop to the 1,450-1,550 zone. One viable wave count would see Topix back below 1,200, retracing the entire move. The broad range of divergence warnings visible in recent months has given way to merely neutral/mildly oversold readings, but there is nothing to suggest that a lasting low is imminent.…

The area around Topix1,680 was viewed as critical after February's drop, and has given way today. At least a 50-62% retracement of the advance off the mid-2016 low is probably in progress, signalling a drop to the 1,450-1,550 zone. One viable wave count would see Topix back below 1,200, retracing the entire move. The broad range of divergence warnings visible in recent months has given way to merely neutral/mildly oversold readings, but there is nothing to suggest that a lasting low is imminent.…

Topix: The Break of 1,680 Signals a Larger Downtrend in Progress

Chief Economist, Aletheia Capital

Dr. Jim Walker

Chief Economist

Independent and original Asian investment research

Aletheia Capital

Aletheia Capital (HK) Ltd. (previously known as Asianomics) combines the extensive knowledge of its experienced team with technology and regulatory changes to disrupt Global Markets business in Asia. The firm is completely independent with no conflicts of interest either on Investment Banking advisory or Capital Markets execution.

Macroeconomics

The source of the global recovery in 2017 was an upturn in the profit cycle. With monetary and exchange rate policies in the major economies now more stable we expect this to continue in 2018 and beyond. Along with profits,  an appropriate real lending rate is a necessary condition for full economic recovery. Real lending rates play a key signaling role in transforming profits into increased investment spending, the critical stage in the renewed boom. At a later stage in the cycle increased demand for credit may well kick in to take the cycle to its peak (followed by the inevitable bust).There is nothing to stop the profit and investment cycles from driving economic growth for most of Asia in the coming year. We particularly like China, Japan, Malaysia and Vietnam.

The source of the global recovery in 2017 was an upturn in the profit cycle. With monetary and exchange rate policies in the major economies now more stable we expect this to continue in 2018 and beyond. Along with profits,  an appropriate real lending rate is a necessary condition for full economic recovery. Real lending rates play a key signaling role in transforming profits into increased investment spending, the critical stage in the renewed boom. At a later stage in the cycle increased demand for credit may well kick in to take the cycle to its peak (followed by the inevitable bust).There is nothing to stop the profit and investment cycles from driving economic growth for most of Asia in the coming year. We particularly like China, Japan, Malaysia and Vietnam.

Real Lending Rates and the Investment Cycle

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)

A Look into Japan’s Surge in ESG-Focused Assets Under Management

According to the Japan Sustainable Investment Forum (JSIF), the total sustainable investment market in Japan is measured at US$1.28 trillion, up...

Simon Peladeau

S&P 500: A Dozen Reasons for Not Being Too Complacent Here

The markets’ response to the February sell-off has been poor, producing in many cases what looks like a bear market rally. Europe in particular...

Peter Beuttell

Tuesday Done, Wednesday Coming. Watch Passive Tracking Vs Non-Passive Tracking Indices

As discussed in Tuesday and Wednesday - Big Days for Japan and Your Scorecard for Tuesday & Wednesday in Japan, there is a significant...

Travis Lundy

Topix: The Break of 1,680 Signals a Larger Downtrend in Progress

The area around Topix1,680 was viewed as critical after February's drop, and has given way today. At least a 50-62% retracement of the advance off...

Peter Beuttell

Real Lending Rates and the Investment Cycle

The source of the global recovery in 2017 was an upturn in the profit cycle. With monetary and exchange rate policies in the major economies now...

Dr. Jim Walker