Thematic (Sector/Industry)

• U.S. stocks tumbled on Tuesday as September trading began, with major indexes posting their worst declines since August 5
• UNIQLO’s August domestic same-store sales increased 25.3% year-on-year, the highest growth since February 2023
• Bain Capital has made a 600 billion yen counteroffer to acquire Japanese firm Fuji Soft, outbidding KKR’s earlier 560 billion yen offer

• Echoes of August with Japan looking to start the day very weak on the lead from US semi related.
• Expect heavy selling for recent retail margin favourites e.g. Mercari, IHI, KHI and Socionext, and SPE winners such as Kokusai and Advantest, although the sector will start under heavy pressure.
• Nothing from Nikkei Inc. yet on their NKY225 rebalance decision, but expect outsized volatility today with many multi-strategy pods shuttered during the August sell off.

• NTES US/BABA US: NPPA Released August Domestic Game Code Approvals.(+/+)
• 700 HK: 700 HK: <Honor of Kings> July Grossing Up 26% MoM. (+)
• BABA US: Alibaba backed AI-startup launches video and music generation model (+)

• ICICI Bank and Zee Entertainment Stocks in Focus Amid SEBI Chief Allegations
• Mankind Pharma to Raise INR 9,000 Crore Debt for Bharat Serums and Vaccines Acquisition
• Vedanta Resources Plans $1.5 Billion Bond Issuance to Refinance Debt

• 1519 HK/ZTO US: Weekly parcel volume grew ~28% y-o-y (+)
• ATAT US/TCOM US: Hotel industry showcased strong performance in the last week of August due to eased base effect.(+/+)
• Macro Update: The mortgage interest rate for existing loans may be further reduced, releasing at least RMB200 billion of residents’ funds annually, bodes well for consumption in China(+)

• European equities extended gains on Monday, with the Eurozone’s Stoxx 50 rising 0.3%, its highest since mid-July, and the Stoxx 600 closing flat at a record high of 525.
• Japanese corporate capital expenditure increased 7.4% year-on-year in Q2, supporting expectations of domestic-led economic recovery
• Yamaha announced a share buyback of up to 14 billion yen, acquiring up to 6 million shares (3.7% of issued shares) 

• Rio Tinto discusses the challenges of M&A deals and the need for synergies to exceed the premium paid.
• Glencore CEO talks about the oversupply in cobalt and copper, but sees potential for upside in pricing as demand grows and supply steadies.
• Mining companies navigating complex market dynamics and strategic decisions amidst changing commodity prices.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• U.S. stocks closed a volatile week and month on a positive note; The Dow Jones rose 0.6%, the S&P 500 gained 1%, and the Nasdaq added 1.1%
• Tokyo’s core inflation accelerated to 2.4% in August, exceeding expectations and the Bank of Japan’s 2% target
• Cboe Global Markets is acquiring a 14.8% stake in Japannext, a proprietary trading system provider, from SBI Holdings

• News Intel may be looking to restructure and even sell its fab business, a slight negative for Japanese SPE suppliers.
• Japan upping defence budget to a record high a positive for related names, including KHI which has been excessively weak on the news it fabricated data for marine engine business.
• Nikkei Inc. is expected to announce results for 30th September rebalance today or tomorrow which may see big buying for the likes of Ryohin Keikaku, NRI and possibly one other.

• Stocks have rebounded impressively since the near 10% correction in early August, buoyed by a still-growing economy, positive earnings, and signals of Fed readiness to ease monetary policy
• This week, the Japanese market saw solid performance. Following Fed Chairman Jerome Powell’s remarks at Jackson Hole, the Nikkei rebounded, adding 283 yen, marking its third consecutive weekly gain
• Koei Tecmo’s stock price surged 13% this week, driven by the announcement of their new game, Atelier Yumia: The Alchemist of Memories & the Envisioned Land, during Nintendo Direct 

• On Aug 23, China’s Ministry of Housing and Urban-Rural Development shared an estimate of the scale of new homes sold and still due for delivery in 2024
• The figure is 3.96 million, which at around 100sqm per unit average would imply around 400 million sqm GFA of property
• This is a more realistic figure than the much bigger numbers derived from macro data on sales, completions, and under-construction

• NTPC to establish Plans New Subsidiary for Nuclear Energy Expansion
• Raymond Lifestyle’s Strategic Expansion: 900 New Stores in Three Years
• L&T Construction Slashes Timelines by 50% with 3D Printing Technology

• Vanguard’s 95.3% reduction in TSMC holdings underscores concerns over geopolitical tensions and supply chain risks impacting the semiconductor sector’s stability and future growth. 
• Citadel’s 876% increase in Thermo Fisher shares reflects strong confidence in the healthcare sector, particularly in companies poised to benefit from technological advancements and market expansion. 
• Berkshire Hathaway’s 49.3% cut in Apple holdings suggests a strategic move to lock in profits after significant gains, while reallocating capital to less volatile investments.

• China has denounced the European Commission’s plan to definitely impose tariff hikes on all electric vehicles (EVs) shipped from the country as “unreasonable,” and vowed to take “all necessary measures” to defend Chinese companies.
• The commission on Tuesday announced an adjusted set of proposed additional duties on China-made EVs as part of an ongoing investigation that found state subsidies are enabling Chinese electric-car makers to undercut their European rivals.
• In an escalation of trade frictions, China on Wednesday launched an anti-subsidy investigation into European Union dairy products.

• Today news reported that China has announced policy where mortgage holders can negotiate with banks on their rates.  We think this is a strong boost to the sentiment
• Despite today sector is up 3-11%, valuation is at all time low and we think the risk reward profile is attractive, especially macro environment is turning more favorable
• We think there can be potential upside of 40-200% depending on stock selection.  We also identify 5 factor that can drive a sector rerating

• This note is a weekly (select weeks on SK) curated selection of Chinese news articles and company announcements focused on developers in distress
• We look for their deals, updates, specific project progress news (‘local signals’), as well as relevant local research commentaries about the market
• We do not verify the underlying data or provide any opinion, we only select and summarize the information; See direct links to sources

• Our annual ‘draw the line’ forecast, by market participants in early 2024, of China’s new home sales shows the reality (data to July) proved more challenging than expected
• In contrast, 2023 was more in line with expectations, with the ‘wisdom of crowds’ working better; but in 2022 no one got close to predicting the extent of the decline
• The forecast focuses on NBS national new home sales (GFA) monthly 12M vs the prior 12M growth rate, with some distortions due to data revisions by NBS

• WTR-CMI keeping pace with broad markets. YTD, the S&P 500 has appreciated 18%, compared with the 9.5% appreciation for the broader Russell 2000, while our WTR-CMI Index has improved 8.4%, held back primarily by lithium stocks, which are off anywhere from 37% for ALB to 68% for PLL.
• Two companies in our index, RYAM and ECL, have outperformed even the tech-heavy S&P 500, coming off a challenging 2023.
• Unfortunately, with both lithium and ag markets still under pressure, we do not expect companies in our sector to outperform the broader markets in 2H24, although individual stock outperformance may continue.

• AUCTUS PUBLICATIONS ________________________________________ Arrow Exploration (AXL LN/CN)C; Target price £0.70 per share: Key horizontal wells outperforms expectations – Arrow has now drilled 3 horizontal wells in Carrizales Norte.
• The flow rates of the wells are exceeding our expectations.
• The first CN horizontal well (CNB HZ-1) is being restricted to a current oil flow rate of 2,090 bbl/d with approximately 41% water cut.

• Wall Street showed mixed results on Thursday as the Dow Jones Industrial Average reached a new record high, closing at 41,335, up 0.59%
• ASICS will discontinue selling baseball equipment like gloves and bats by September 2025
• Toyota Motor Corporation reported a slight year-on-year increase in domestic production for July, reaching 309,118 units.

• Tech selloff overnight on NVDA post-earnings weakness was fairly contained, and SPE related in Japan should continue yesterdays rebound off the morning lows.
• Big beat for Dell on the strong outlook for its AI servers outweighing the soft consumer PC market sending it +8% in after-market trading.
• News that Tepco plans to spend $3.2bn to upgrade its electricity infrastructure to 2030 positive for wire/cable names and related names.

• Adani Ports to Invest INR 3,500 Crore in Madhya Pradesh Projects
• Wipro’s Strategic AI Partnerships in US Healthcare: Strong FY25 Forecast
• Dixon Technologies to Partner with China’s HKC for Display Module Manufacturing

• LI US:Li Auto’s second quarter revenue and profit exceeded expectations, and L6’s unit price and gross profit were better than expected. (/)
• 1810 HK/1211 HK/ LI US/XPEV US/NIO US:Week 34 of 2024: New energy vehicles grow healthily,BYD hit a new high, AITO rebounded, Xiaomi continued to fall back.(/////////)
• NIO US/XPEV US/ LI US: AITO M5 caught fire, positive for LI.(/////)

• PDD US:PDD valuation cheaper than slower growing e-commerce peers. (/)
• SHEIN: SHEIN launches semi- consignment model in the EU.  (/)
• BABA US: Taobao launches “Grass-Planting Plan” to drive off-site traffic to Taobao (+) 

• We highlight 14 stocks in Thailand that look interesting to us based on our FVMR Methodology
• Portfolio changes: Seven stocks remain, seven new join the fray
• Ince inception, it has gained 112% versus the SET 100 Index’s return of 24%

• Stocks retreated on Wednesday as investors awaited Nvidia’s crucial earnings report. The Nasdaq Composite led declines, falling 1.12%
• Nvidia reported strong Q4 earnings, beating expectations with $30.04 billion in revenue and $0.68 EPS.
• Super Micro Computer’s stock plunged 19% after announcing a delay in filing its annual report, following accusations of “accounting manipulation” by Hindenburg Research

• NVDA disappoints market expectations and trades -7% after-market, setting a very weak tone for Japanese SPE and tech related names to start.
• The bad news for 4911 Shiseido continues, with the tone out of a small sell-side meeting held yesterday after-market pointed to further earnings downside.
• Expect a continued rotation into value and domestic defensives as the market pivots away from AI/tech with plenty of room for profit taking after the recent rebound.

• US considerably lags behind China and Europe which had 3.2 million and 0.9 million public charging points at the end of July 2024. US had just 180,136.
• US aims to reach 500,000 public EV chargers by 2030. This compared with EU’s target of 3.5 million chargers by the same timeframe.
• EV adoption remains slow in the U.S. impacted by pricing and lack of infrastructure.

• Zee and Sony Amicably Settle Disputes Over Failed Merger, Withdraw Claims
• NSE Files for SEBI NOC to Gain Approval for Long-Awaited IPO Listing
• ReNew and Microsoft Forge 437.6 MW Green Energy Pact to Advance Carbon-Negative Goals

• News report today that RMB may appreciate 10% due to potential USD weakness and capital inflow of USD1trn back into China, causing upward pressure of the currency
• The capital inflow comes from potential unwinding of carry trade, as Chinese companies borrow CNY at low interest rate and place capital in USD deposit, at higher interest rate
• We think this scenario is unlikely unless China economy is showing strong recovery.  But, if this happens, it will hurt export but positive for HK-listed Chinese property stocks

• China’s tropical island province of Hainan is to hand out 24 million yuan ($3.4 million) in spending vouchers to encourage tourists to splash out and reverse falling retail sales in the duty-free haven.
• The provincial government said it will distribute the vouchers, including 9 million yuan to buy airline tickets and 15 million yuan for tax-free shopping, between late August and October.
• The initial batch of flight ticket vouchers will apply to Hainan Airlines’ services, but other carriers can request to join the program, the government said.

• US Stocks edged higher as the market awaits Nvidia earnings after the close on Wednesday
• Super Micro Computer fell 2.64% after Hindenburg Research released a report alleging accounting issues
• Sony is increasing the price of its PlayStation 5 console in Japan by about 20%

• Sony price hikes in Japan to have a mild positive impact. The stock still looks attractive after positives from recent earnings seem to have been lost in the recent volatility.
• PPIH continues to look attractive as a continued laggard as the market rotates out of the big retail/inbound winners such as Isetan Mitsukoshi.
• 7&I clearly showing how anti-takeover they are effectively asking for Govt protection to ward off Canada’s Alimentation Couche-Tard takeover approach.

• JD US/1810 HK/BABA US: Government insider says home appliance subsidies to be fully disbursed by end of August (+)
• JD US/2618 HK/PDD US/BABA US: JD adjusts its algorithm to improve traffic of low price and fast shipping products (+/+/-/-)
• BABA US: Alibaba launches demo of LLM support for mathematical reasoning based on sketches (+)

• 1347 HK/ACMR US: Hua Hong Wuxi Fab Phase II begins tool move-in (+/+)
• 1810 HK/BIDU US/0175 HK: “Xiaomi criticized for selling cars at a loss” goes viral (+/-/-)
• 2150 HK:Nayuki’s First Overseas Flagship Store Opens in Thailand (+)

• HK Property stocks are up 4-5% today.   We think the tide has turned for HK real estate.  As discussed, we identify HK to benefit if Fed starts a rate-cut cycle
• Powell’s speech at Jackson Hole meeting confirmed the change of monetary policy and will start a rate cut cycle.  Despite fundamental issues remain for HK, market is forward-looking
• A buy in HK RE names will be a good value trade for next 6-12 months and we discuss potential trade ideas

• The Dow Jones Industrial Average closed at a record high of 41,240 on Monday, rising 0.1%, while the S&P 500 and Nasdaq Composite fell 0.3% and 0.9%, respectively.
• Technology stocks lagged as Nvidia dropped 2% ahead of its earnings report, with Broadcom and Tesla also sliding
• Resonac Holdings plans to invest about 30 billion yen to boost production of advanced power semiconductors for EVs starting in 2027

• Tech weakness in Japan to continue, following the profit taking lead out of the US with NVDA numbers on Wednesday.
• Defence related may get a lift after yesterdays weakness, with Middle East tensions rising, Japan warding off a Chinese spy plane and ex-Defence Minister announcing candidacy for LDP leader.
• Typhoon Shanshan is expected in Kyushu. Resulting weakness on related names is usually short-lived and largely retail investor driven, making reverse positioning into the moves the more attractive tactic.

• Japanese Investors Begin Pulling Out from India Midcap Funds, Yet Overall Inflows Stay Positive
• Vedanta Prepares Rs 30,000-Crore War Chest for Deleveraging and Growth
• Jio Financial Services Gains Approval to Raise Foreign Investment Cap to 49%

• U.S. stocks surged on Friday, driven by a decline in Treasury yields after Federal Reserve Chair Jerome Powell signaled that rate cuts are imminent
• At the Jackson Hole Symposium, Powell stated that the “time has come” to adjust monetary policy, with the Fed open to a larger rate cut depending on incoming data
• Former Environment Minister Shinjiro Koizumi is the leading candidate to replace outgoing Prime Minister Fumio Kishida, according to a Nikkei poll

• Gold’s price advance is idiosyncratic moving against historical norms of estimated inflation and real rates.
• Demand from large central banks is not currently a factor in price discovery as the PBOC has stopped buying.  Gold’s safe-haven status has also declined since GFC in 2008/09.
  
• Easier monetary policy from the Fed and higher actual inflation continue to fuel lower real rates and provide substantial support for Gold’s price. 
  

• Yamaha Motor share sale by Toyota, Yamaha Corp and MS&AD may take time to clear, but the outlook for Yamaha Motor is improving. Expect Yamaha Corp strength on buyback expectations.
• Ueda signalling a slightly hawkish tone on Friday should be good for banks and utilities, but less good for exporters, tourism related and real estate.
• 6963 Rohm is starting to look interesting again with a few upcoming drivers which should help it rebound, including next weeks NKY225 rebalance announcement.