Thematic (Sector/Industry)

OVERSEAS. SPX +0.6% on intraday bounce; Defensives led w/Utilities; Financials lag as Banking fears persist; Rates down on recession view WHILE Fed signals more hikes; MSFT-ATVI deal closer to approval
JAPAN. NKY Futs -0.9% vs Cash; Weaker USDJPY 130.7 ; Kishida Approval Rating Rises; Feb Inflation 3.1%; ValueAct takes off gloves with 7&i; Shippers in focus with ex-div this week.
NUGGET. 7&i: Activist ValueAct goes Full John Wick calling for removal of 4 Directors, including Chairman/CEO Isaka. 2023 could be the year of accelerated reforms. Stock looks attractive post sell-off.

Investors Return to Tobacco Stocks After Multi-Year Decline

By Steven Holden

After a multi-year drop in ownership, Global EM fund exposure in the Tobacco sector is on the rise.
Tobacco remains heavily under-owned, but key EM funds are raising allocations, led by GQG Partners, Virtus, BNY Mellon and Allianz.
ITC Limited has been a key beneficiary of inflows and stands as the most widely owned stock in the sector, followed by KT&G Corp.

China TMT Update (Mar.27) – BABA/JD/ PDD/VIPS/LI/700HK/NTES/BILI/ – Tmall Outlines Upcoming Changes

BABA/ JD/ PDD/ VIPS: Tmall outlines upcoming changes to its platform (-/-/-/-)
LI: Li Auto CEO reveals six pure EVs in pipeline(+)
700HK/NTES/BILI/: Game industry in general: Domestic game codes published by NPPA（+）

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Mar 26

Daily Brief Thematic (Sector/Industry): Manila Politicians Weigh Ban on Pogo Gaming to Quell Beijing Threats and Improve National Image and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Manila Politicians Weigh Ban on Pogo Gaming to Quell Beijing Threats and Improve National Image
China Healthcare Weekly (Mar24)-Medical Device New Policy,Reassess Me-Too Strategy,TCM Is Core Asset

Manila Politicians Weigh Ban on Pogo Gaming to Quell Beijing Threats and Improve National Image

By Howard J Klein

If Pogos are ultimately banned, Macau and Philippine brick and mortar casinos could see considerable revenue benefits intermediate and long term.
There is little chance online gaming will ever be legal in mainland China, but demand continues to grow as citizens support a huge online industry in the Philippines.
Now politicans are questioning the risk/reward of inaction on curbing Chinese participation as both operators and customers of online casinos.

China Healthcare Weekly (Mar24)-Medical Device New Policy,Reassess Me-Too Strategy,TCM Is Core Asset

The National Health Commission issued a new document, aiming to relax the approval of large medical equipment configuration, which would be a significant benefit for the industry.
Whether the “Me-Better” strategy of pharmaceutical enterprises is reasonable or not depends on the understanding level of disease/molecule of the followers and the basis for early clinical project establishment.
Unlike overseas markets, the core asset of China pharmaceutical industry isn’t innovative drugs but TCM considering policy environment.We recommend investors leave a place in portfolio to invest in TCM companies.

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Mar 25

Daily Brief Thematic (Sector/Industry): LatAm Banks – Liquidity and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

LatAm Banks – Liquidity, Solvency and Credit Quality in Focus in a Crisis
Japan Weekly | Financials Still a Concern, Recruit, Toyota Industries

LatAm Banks – Liquidity, Solvency and Credit Quality in Focus in a Crisis

By Victor Galliano

We examine key balance sheet ratios of the Latam banks looking into liquidity, credit quality and capital adequacy, at a time of investor nervousness and concern
Based on our screening, our positive value picks are Bradesco and BanColombia, with Banco de Chile, BanBajio and BanRegio composing our positive high quality picks
Our bearish picks are Banorte and BCI; Banorte is strong in terms of capital adequacy and credit quality, but is exposed in terms of its big securities portfolio

Japan Weekly | Financials Still a Concern, Recruit, Toyota Industries

Japanese equities were marginally higher on the week as global markets continued to focus on problems in the banking system
The Fed, The Bank of England and the Swiss National Bank continued to fight the war on inflation.
In Japan, Recruit was the standout performer after the company announced a hefty cut to its workforce (in a bad news is good news kinda way)

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Mar 24

Daily Brief Thematic (Sector/Industry): Anatomy Of A Semiconductor Downturn and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Anatomy Of A Semiconductor Downturn
Good Morning Japan |Dot Plot Says 5.1%; Tech Leads Gains; NUGGET: Japan’s Hay Fever Hell-Few Winners
Pagcor’s New Priority to Sell Its Casinos Could Be a Catalyst for Key Sector Stocks

Anatomy Of A Semiconductor Downturn

The current semiconductor downturn is largely attributable to the reversion of PC and Smartphone unit shipments to their pre-pandemic norms
There are good reasons to believe that the trough for PC unit shipments will be Q1 2023.
Server shipments will decline sequentially in H1 and this may further prolong the impact on memory players, Intel and to a lesser extent, AMD & NVIDIA

Good Morning Japan |Dot Plot Says 5.1%; Tech Leads Gains; NUGGET: Japan’s Hay Fever Hell-Few Winners

OVERSEAS. SPX ekes out +0.3% gains; Only Tech & Telcos Positive while other 9 sectors in the Red; Fed’s dot plot says 5.1%; Hinderburg takes aim at BLOCK (Square)
JAPAN. NKY Futs -1.2% vs Cash; USDJPY 130.9 as US Rate hike fears wane; Japan ends export restrictions on semi materials to S. Korea; Softbank’s ARM to change pricing rules
NUGGET. Japan’s Hay Fever Hell: Few Winners, Many Losers. Winners: drugstores, pharmacists, e-commerce; Losers: everyone related to Outdoor activities !

Pagcor’s New Priority to Sell Its Casinos Could Be a Catalyst for Key Sector Stocks

By Howard J Klein

The government’s policy shift to sell its casinos is the latest in a long line of flip flops regarding the future of its presence in the industry.
The timing is right. Philippine casinos are on a post-pandemic run even before the return of Chine tourism. Bloomberry, operators of Manila’s Solaire has scored a record quarter.
Leading possibility beside Bloomberry is Las Vegas Sands long on the hunt to expand its Asian footprin to a third nation.

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Mar 23

Daily Brief Thematic (Sector/Industry): Good Morning Japan |Yellen/Powell Rattles Markets; NUGGET: NIKON – Riding the DigiCam Renaissance and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Good Morning Japan |Yellen/Powell Rattles Markets; NUGGET: NIKON – Riding the DigiCam Renaissance
Intel’s GPU Guru Departs. Very Abruptly.
Intel Foundry Chief Announcement Spells Trouble For The Tower Semi Acquisition
China SOEs – Waiting for Core Asset Valuation to Take Off
Ecognosis Advisory Ltd – ECONOTE No. 111 Investing in the Defence Sector
Key Takeaways from IRENA’s Global Landscape of Renewable Energy Finance 2023 Report
Tech Talk: Digital Transformation
China TMT Update(Mar.23): 3690HK/PDD/BABA – Surplus Meituan Delivery Riders Could Improve Margins

Good Morning Japan |Yellen/Powell Rattles Markets; NUGGET: NIKON – Riding the DigiCam Renaissance

OVERSEAS. Fed Chair Powell delivers expected +25bps; Hawkish pledge on inflation + Yellen’s testimony rattles markets; Safety trade reasserts; Seems like more volatility ahead for all markets.
JAPAN. NKY Futs -1.7% vs Cash; USDJPY strengthens to 131.4 n rush to safety; Monetary nomalization on course in Japan – solid Land price gains + continued wage hikes.
NUGGET. NIKON – Riding the Digital Camera Renaissance. Camera demand has stabilizes and is recovering as consumers shift to high end models.

Intel’s GPU Guru Departs. Very Abruptly.

While his hiring back in 2017 was heralded with a corporate press release, his abrupt departure yesterday was communicated via a rather succinct tweet from the CEO.
Intel’s GPU/DPU data center roadmap was already “simplified” in back in January. Will what remains survive the ongoing cuts across the company?
Should Intel still really be trying to break into the gaming PC market? How is that strategically important?

Intel Foundry Chief Announcement Spells Trouble For The Tower Semi Acquisition

The role has been vacant for > 3 months. Why wait till now to chose an obvious in-situ candidate?
Closure date for the Tower acquisition has been pushed out to H1 2023 from Q1 2023 according to an Intel filing on January 27 last
Intel’s fortunes have changed dramatically for the worse over the past year. It’s debatable whether the Tower acquisition makes sense any more.

China SOEs – Waiting for Core Asset Valuation to Take Off

By VRS (Valuation & Research Specialists)

In most industries, SOEs have valuation discounts compared to non-SOEs, and the degree of PB discount is more obvious than P/E ratio. A prominent problem is the uneven valuation structure.
Valuation reflects expectations for future fundamentals. The improvement in SOE performance with limited valuation boost may be due to investors’ consideration of growth potential, governance mechanisms, and information asymmetry.
With the further deepening of SOE reform and the formation of the concept of building a modern capital market with Chinese characteristics, it’s expected to see improvement in SOE’s valuation.

Ecognosis Advisory Ltd – ECONOTE No. 111 Investing in the Defence Sector

In Econote No. 110 ( Nov.Dec 2022) we broached the topic of investing in the Defence sectors of various West and Asian economies.
The reasons for this were very simple: First, the war in the Ukraine resulted to a sharp rise in defence spending in western countries and, second, this rise would not cease with the end of the war but presented a pivot to higher defence spending, not only in western countries, but also in areas such as Asia.
Hence the outlook for Defence stocks was, and is very bright, as witnessed by their persistent outperformance of the S&P 500 and still reasonable valuations.

Key Takeaways from IRENA’s Global Landscape of Renewable Energy Finance 2023 Report

We have made our best efforts to summarize the content published in the most recent IRENA report on renewable energy financing.
This report provides a quick summary of key facts from the 120-plus-page report.
While worldwide investment in renewable energy reached a record high of US$0.5 trillion in 2022, it represented less than 40% average expenditure required under IRENA’s 1.5°C Scenario between 2021 and 2030.

Tech Talk: Digital Transformation

The digital transformation services market is big, at more than $2 trillion this year, and growing at a 23% CAGR.
According to Gartner, 91% of organizations have a digital initiative currently ongoing and 67% of senior executives believe their organizations must become significantly more digitized.
The reason digital transformation is growing is the benefits of a true digital transformation are significant, including improved operations, time-to-market, and customer experience, and COVID-19 just accelerated the trend.

China TMT Update(Mar.23): 3690HK/PDD/BABA – Surplus Meituan Delivery Riders Could Improve Margins

3690HK: Surplus Meituan delivery riders could improve margins beginning in 1Q23 (+)
PDD: Temu temporarily suspended inventory intake at Guangzhou warehouse because of shortage in labor and warehouse storage capacity (-)
BABA：Taobao is testing “price comparison” feature, which might impact its take rate（-）

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Mar 22

Daily Brief Thematic (Sector/Industry): AMD Versus Intel. Spot The Differences? and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

AMD Versus Intel. Spot The Differences?
Good Morning Japan |SPX Reclaims 4000! NUGGET: Asahi Kasei-M&A Gone Bad, Writedown, Struggles Remain
Japan Healthcare: Currency Benefit Seems to Be Fading; Focus Will Be on Underlying Business Strength
Discount Drugstores Challenging Japanese Supermarkets
MQG – Funding Squeeze?
Banks Vs. Market: A Closer Look at Equity Risk Premia and Other Valuation Measures
China TMT Update(Mar.22): 700HK/NTES/BILI/IQ/3659.JP /BGNE/9995HK/ZLAB – Foreign Game Codes(+)

AMD Versus Intel. Spot The Differences?

AMD Q4 2022 revenues amounted to $5.6 billion, $100 million above the midpoint of the guided range, flat sequentially but an increase of 16% YoY.
Intel Q4 2022 revenue amounted to $14 billion, at the very bottom of the guided range down 8% sequentially and down 28% YoY.
Facing the same macro headwinds, AMD significantly outperformed Intel across a wide range of key metrics in 2022

Good Morning Japan |SPX Reclaims 4000! NUGGET: Asahi Kasei-M&A Gone Bad, Writedown, Struggles Remain

OVERSEAS. SPX reclaims 4000 level with 2nd day of gains; 8/11 SPX sectors up as VIX collapses; Fed Decision Day on Wed-Expect No surprises; INTEL headwinds on China curbs
JAPAN. NKY Futs +0.6% vs Cash; USDJPY 132. 4; Japan set to rally after the Spring transition break;US accepts Japan’s EV subsidy appeal=+ve auto parts; More inflation support from govt.
NUGGET. Asahi Kasai – M&A Gone Bad, Writedown, Struggles Remain. Future profitability of the LiB Separator business in question.

Japan Healthcare: Currency Benefit Seems to Be Fading; Focus Will Be on Underlying Business Strength

By Tina Banerjee

In 2022, JPY depreciated against USD to the lowest level in more than 30 years. This benefitted healthcare companies in Japan, which earn significant portion of revenues from the U.S.
This year, Yen has started reversing its course and began to strengthen. With benefit of favorable Forex gradually fading, investors need to be selective in picking healthcare bets in Japan.
We have discussed about five top picks from Japan healthcare sector. Domestic focused business, favorable industry tailwinds, and COVID recovery are the main investment thesis for the top picks.

Discount Drugstores Challenging Japanese Supermarkets

By Michael Causton

Drugstores were already the fastest growing format before Covid and the health scare only improved their performance further.
Several of the largest chains are now powerful players in food, using their non-food base to shake up the supermarket sector in ways that Japan has never seen before.
Being price-led, inflation is only helping them along, with a much greater capacity to hold down prices than mainstream supermarkets.

MQG – Funding Squeeze?

By Daniel Tabbush

Funding squeeze evident in HK’s HIBOR market and reported in Australia too
Even where not visible, this must be expected globally, as banks reign in risk
MQG has low levels of deposits and high levels of securities

Banks Vs. Market: A Closer Look at Equity Risk Premia and Other Valuation Measures

By Jeroen Blokland

Unsurprisingly, the (required) equity risk premium on bank stocks has increased, but especially in the case of US banks, it is not at extreme levels.
The forward P/E ratio of European bank stocks has dropped to distressed/recessionary levels, while the forward P/E of US bank stocks is ‘seriously low’ at 8.
However, based on the Price-to-Book ratio, bank valuation is average. Given elevated contagion risks and increased regulatory scrutiny, bank stock valuation alone is insufficient to overweight the sector.

China TMT Update(Mar.22): 700HK/NTES/BILI/IQ/3659.JP /BGNE/9995HK/ZLAB – Foreign Game Codes(+)

700HK/NTES/BILI/IQ/3659.JP: The latest Foreign game codes released by NPPA, positive to gaming companies(+)
BGNE/9995HK：Daiichi and Zymeworks end antibody pact after seven years (-)
ZLAB：ZaiLab’s partner Karua’s Schizophrenia drug obtained positive Phase 3 data (+)

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Mar 21

Daily Brief Thematic (Sector/Industry): AT1 Bonds; Life After Credit Suisse and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

AT1 Bonds; Life After Credit Suisse
Asia Gaming: The Melco Dilemma Favors the Pure Play US Traded ADR
President Xi’s Visit to Russia – For Russia-Ukraine War Or For The BRICS Currency?
SPAC Talk: The SVB Collapse and SPACs
Commodity Analysis – Copper Futures
China TMT Update(Mar.21): BILI/BIDU/BABA/3635.JP/BGNE – Douyin Launches “Qingtao”, Similar to BILI
Weekly Sustainable Investing Surveyor: Week Ended March 17, 2023

AT1 Bonds; Life After Credit Suisse

By Victor Galliano

The UBS acquisition of Credit Suisse includes the write-off of CHF15.8bn (USD17bn) of Additional Tier 1 (AT1) bonds, despite there being residual equity value for CS shareholders in the deal
AT1s are the most junior, loss absorbing of bonds; precedent exists for the zeroing of AT1s in Spain’s Banco Popular 2017 failure, but importantly this also included shareholders being zeroed
The Credit Suisse AT1 write-off is by far the biggest so far and this unconventional treatment of shareholders versus junior bondholders should lead European banks’ cost of equity to rise

Asia Gaming: The Melco Dilemma Favors the Pure Play US Traded ADR

By Howard J Klein

We have guided buy on MGM the parent as well as MGM China for exposure to both Asia and US post covid recovery. This is different: pure play only.
The Melco Hong Kong traded parent offers exposure to Macau, Manila and the new Cyprus properties. But we believe the ramping of GGR will be stronger in Macau than elsewhere.
The stock is up nearly 4X its October low. We see its current price attractive for a speedier upside than its parent.

President Xi’s Visit to Russia – For Russia-Ukraine War Or For The BRICS Currency?

The cooperation between China and Russia will be extensive and far-reaching.After the historic reconciliation between Saudi Arabia and Iran, there’s expected to be a series of major international changes ahead.
The highlight of Xi-Putin meeting could be to promote the BRICS currency. This means that global de-dollarization has officially begun, which will be a fatal blow to the US dollar.
The future game rule in this world is no longer be decided by the US alone. We suggest that investors change their way of thinking, because the world has changed.

SPAC Talk: The SVB Collapse and SPACs

By VRS (Valuation & Research Specialists)

In the ordinary course of SPAC business. In what has become the norm in SPAC land these days, we can report another flurry of liquidation announcements.
As we begin the second half of the month, the liquidation count for March, including those that have been completed or are scheduled to be completed for the remainder of month, has already passed 34, involving the return of $10.9 billion to their Class A shareholders.
The prospects of more liquidations being added to the March list remain high.

Commodity Analysis – Copper Futures

According to Graph 2, during the period October 7, 2022 – January 6, 2023, an overall bullish trend was reflected in the prices of Copper.
During the examined period there were broadly three secondary movements.
From October 7th, until November 11th, an upward trend was observed.

China TMT Update(Mar.21): BILI/BIDU/BABA/3635.JP/BGNE – Douyin Launches “Qingtao”, Similar to BILI

BILI: Douyin launches a new APP “Qingtao”, similar to BILI (-)
Baidu’s ERNIE Bot exceeds expectations from user feedbacks (+); BABA/3635JP: <Three Kingdoms: War Chess Version> performance slightly above average (+/+)
BeiGene’s termination of DKK1 collaboration with Leap is likely because its PD-L1 already got positive Phase III result on the same indication（/）

Weekly Sustainable Investing Surveyor: Week Ended March 17, 2023

WTR Sustainable Index: During the week ended March 17, 2023, the WTR Sustainable Index underperformed the broader market, rising 1.2% W/W versus the S&P 500 Index (up 1.4%), the Russell 2000 Index (down 2.6%), and the Nasdaq Composite Index (up 4.4%).
Advanced Transportation Solutions (69.3% of the index) drove the index performance, rising 3.3%, while Industrial Climate and Ag Technology (22.8% of the index) was down 2.0% and Energy Technology was down 5.8%.
Valuation: Based on forward 12-month consensus estimates, the current P/E ratio of the WTR Sustainable index is 23.6x versus 17.6x for the S&P 500.

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Mar 20

Daily Brief Thematic (Sector/Industry): Good Morning Japan |UBScs – Wedding Vows Sealed; NUGGET: MOL-Diversification Can’t Come Fast Enough and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Good Morning Japan |UBScs – Wedding Vows Sealed; NUGGET: MOL-Diversification Can’t Come Fast Enough
Globalwafers Q4 2022 Earnings Key Takeaways
[Consumer Brands Deep Dive]:Structural and Substitution Drive Chinese Consumer
TRACKING TRAFFIC: Chinese Express / No Signs of a Sharp Recovery in Jan-Feb Data
Weekly Stock Bullfinder – Week of 3/20

Good Morning Japan |UBScs – Wedding Vows Sealed; NUGGET: MOL-Diversification Can’t Come Fast Enough

OVERSEAS. Equities Sell-off on Pending Demise of Credit Suisse; Flight to Safety Trade resumes; SNB engineer Shotgun Wedding – deal closed with UBS $3.25 billion. The end of an era.
JAPAN. On Friday, NKY Futs -2.3% vs Cash as Contagion Fears around Credit Suisse prompted Flight to Safety; With CS Rescue, expect strong open; JP Shippers Container Profits looks shaky
NUGGET. As Mitsui OSK approaches ex-div, we think the share price will see headwinds given the expected earnings decline on ONE’s earning collapse = (MUCH) lower dividends next year.

Globalwafers Q4 2022 Earnings Key Takeaways

Globalwafers is bucking the trend with a sequentially flat CY2023 revenue forecast
Q4 2022 delivered the company’s twelfth successive quarter of sequential revenue growth
Details of the funding available under the US CHIPS Act for Globalwafers Sherman, Texas greenfield expansion still remain unclear

[Consumer Brands Deep Dive]:Structural and Substitution Drive Chinese Consumer

Even though we are long-term optimistic on the rise of Chinese consumer brands, we believe short-term optimism is misplaced.
Two themes: (1) structural changes led by China’s transition to an older and more affluent society, (2) substitution and globalization that can break the ceiling for valuation;
Our TOP PICKS are Li Auto, Atour, Luckin, FUTU, BEKE and Miniso

TRACKING TRAFFIC: Chinese Express / No Signs of a Sharp Recovery in Jan-Feb Data

By Daniel Hellberg

Combined January-February express industry parcel volume was up just 4.6% Y/Y, and ASPs were down -1.8% Y/Y
Listed express companies’ parcel volume and government-reported online tangible goods sales in the first two months of 2023 also both up a modest ~5% Y/Y
In a year when one express player hopes to list its shares, it’s unclear who will be willing to concede market share. We expect price competition to intensify in 2023.

Weekly Stock Bullfinder – Week of 3/20

By Weekly Stock Bull Finder

Volatility continues to show up with the recent banking sector stress which has given market participants fresh concerns over secondary credit exposures and the Treasury/central bankers response to address the issues.
With the Fed meeting this upcoming week, never before in this interest rate hiking cycle to date has there been more diverse viewpoints coming out over whether a Fed pause, Fed hike, or even a Fed cut should be done in the next meeting.
Up until this point, the conversations have focused on how much (25bps,50bps, 75bps) the Fed should do at each of its meetings in order to get inflation back down based upon the incoming inflation data.

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Mar 19

Daily Brief Thematic (Sector/Industry): AMD. Latest Market Share Growth & Outlook and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

AMD. Latest Market Share Growth & Outlook
GEM Weekly (17 Mar 2023): Chinese Macro Data; CATL, ByteDance, Samsung Electronics, Baidu
China Healthcare Weekly (Mar.17) – VBP on ICL/Sports Medicine, New Payment System, Time to Long CXO?
Short Note: LONG China on Monetary Easing Cycle

AMD. Latest Market Share Growth & Outlook

AMD’s overall x86 market share has doubled in the last three years
AMD’s desktop market share rebounded from 13.9% in Q3 2022 to 18.6% in Q4 2022
AMD will likely prioritise server versus client market share in 2023 & 2024, pressing home their clear leadership advantage over Intel in this segment during this timeframe

GEM Weekly (17 Mar 2023): Chinese Macro Data; CATL, ByteDance, Samsung Electronics, Baidu

By Wium Malan, CFA

The Global Emerging Markets weekly provides a summary of the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.
Macro data points: Chinese industrial production, retail sales, and fixed asset investment.
Companies mentioned: CATL (A) (300750 CH), ByteDance (1439927D CH), Samsung Electronics (005930 KS), Baidu (9888 HK)

China Healthcare Weekly (Mar.17) – VBP on ICL/Sports Medicine, New Payment System, Time to Long CXO?

National centralized procurement on ophthalmology and orthopedics would be carried out soon, including ICL and sports medicine. Products in neuro-intervention/neurosurgery/peripheral intervention/IVD reagents would be included in 2023 VBP as well.
After NRDL negotiation/VBP/DRGs policies are fully mature, it is expected to see the emergence of some high-price-oriented payment system for innovative products. Only then will the industry beta really emerge.
If long-term money doesn’t have enough understanding of the trend of long-term interest rates, the expected return and valuation model of healthcare companies can’t be adjusted in time (e.g. CXO).

Short Note: LONG China on Monetary Easing Cycle

By Jacob Cheng

PBoC just announced a RRR cut of 25bps, which is a surprise to market
The cut will lower average RRR from 7.8% to 7.6%, and is expected to release c. 500bn of liquidity. China’s low inflation allows more room for further RRR cuts
Government’s press release addresses key market concerns. We need to monitor recovery in property market. LONG China on easing cycle. China property names are trading at distressed valuation

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Mar 18

Daily Brief Thematic (Sector/Industry): Japan Weekly | The Deflationary Macro Read; SONY; What’s up with Auto Stocks and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Japan Weekly | The Deflationary Macro Read; SONY; What’s up with Auto Stocks
US Bank Sector Stress – Old Fashioned Risks and a Regulatory Loophole Meet the Digital Age
Commercial/Contract Furniture/Consumer Hardlines Industry News

Japan Weekly | The Deflationary Macro Read; SONY; What’s up with Auto Stocks

US stocks up, bonds down, commodities down, Japanese stocks down = deflation
The UK CMA is getting closer to a decision on the Microsoft acquisition of Activision. The provisional findings are in, the responses are in….now we wait
Auto stocks were clear underperformers. You can chalk that up to yen strength or a growing realization of the cost of electrification.

US Bank Sector Stress – Old Fashioned Risks and a Regulatory Loophole Meet the Digital Age

By Victor Galliano

Interest rate risk in the system increased with the Fed’s steep interest rate hikes and due to the opt-out for many US banks on the AFS securities market-to-market capital hit
Uninsured and concentrated deposits, at the first hint of bank trouble, can take flight very quickly especially in the case of concentrated, key elements of the Silicon Vally Bank collapse
We believe that it is premature to look for buy opportunities in US banks, although we believe that the largest US banks are sound in terms of their balance sheets

Commercial/Contract Furniture/Consumer Hardlines Industry News