Thematic (Sector/Industry)

• The S&P 500 extended its advance into a fifth straight day, the longest winning streak in more than month
• Japan’s ruling Liberal Democratic Party (LDP) is gearing up for a contested leadership election in September as Prime Minister Fumio Kishida announced he will not seek re-election
• Nike’s stock rose nearly 5% in after-hours trading amid speculation of activist involvement

• Gains for Micron on the potential for DDR5 price hikes should help lift 6871 Micronics after yesterdays excessive weakness.
• More cheer for US home builders after Smith Douglas number beat, adding to the upside story for Sumi Forestry and Selkisui House.
• Defence related plays should remain in the spotlight with Kishida replacement candidates Ishiba and Kono both ex-defence ministers.

• Supreme Court ruled that States can levy cesses on mining activities, distinguishing it from Union’s authority over royalty.
• Retrospective tax collection from 2005 could impose 1.5-2 lakh crore on the mining sector, heavily impacting co. like Tata Steel Ltd (TATA IN) and Coal India Ltd (COAL IN).
• The ruling may exacerbate financial pressures on the mining industry, especially in high-tax states like Odisha and Jharkhand.

• Tencent’s <LoLM> shows strong performance after anniversary event, reaching as high as No. 2 on the iOS Grossing Chart with strong player spending sentiment
• NetEase’s <Justice Mobile> grossing rank continues to decline due to the game’s lifecycle, slightly lowering expectations. <Naraka: Bladepoint Mobile> revenue performance is stabilizing, with annual grossing expected around RMB 10bn
• Bilibili’s <FGO> shows a strong revenue trend, currently in the top 20 on the iOS Grossing Chart, slightly raising expectations

• Government Considers Ethanol Price Increase to Meet Blending 20% Targets
• Torrent Pharma is seeking up to $3 billion to buy KKR’s 54% stake in JB Chemicals.
• Cochin Shipyard will deliver a new dredger worth INR 800 crore to DCI by September 2025.

• Stocks surged on Tuesday, with major indices edging closer to record highs as investors reacted positively to a key inflation report
• Starbucks saw a significant 24.5% stock increase after naming Chipotle CEO Brian Niccol as its next leader
• Japan reported a 8% year-on-year increase in July machine tool orders, reaching 124 billion yen. This marks the third consecutive month of growth

• Shanghai Index is trading at cheap levels based on P/E, P/BV, and P/CF, both against its own history and the valuation gap against other major markets.
• Many companies are paying good dividends, the top-10 highest yielding stocks averages at 12.5%. Dividend cover is solid (>1x), and all are big MCAP with decent ADTV (>USD2m).
• Investors have been underweight China for a long time. Even high quality blue chip stocks are trading at single-digit PE and paying dividends >7%.

• ARM +5.7% will help lift 9984 Softbank which is lagging some of the other high-beta plays in Japan giving it plenty of room to rebound further.
• The market is going to like the news that 2501 Sapporo is finally listening to activist investors who have been angling for the firm to divest some of its large R/E holdings.
• 4922 Kose is looking more interesting after it’s failure to rebound looks to have been caused by a negative read from 4911 Shiseido’s poor numbers rather than anything company specific.

• ONGC, Oil India to Price New Gas at 20% Premium over the APM price.
• JSW Steel buys a 66.67% stake in M Res NSW for $120 million.
• Adani Green Energy aims for a 30% CAGR in renewable capacity.

• PDD US/CPNG US/4385 JP/4689 JP/4755 JP: Temu to launch semi-consignment in Japan and South Korea in October (+/-/-/-/-)
• BABA US: Alibaba upgrades it AI generated fashion model tool (+)
• BABA US: Alibaba’s C2C platform Idle Fish to charge commissions in September (+)

• Bunge’s Q2 results disappointed markets, leading to a huge selloff as both EPS and revenue missed analyst estimates.
• Bunge’s agribusiness segment experienced margin compression despite surging volumes resulting in shrinking profits.
• The refined and specialty oils segment faced headwinds from lower selling prices. Milling emerged as a bright spot, driven by cost optimization.

• Consumer Industry Update:Hubei province takes the lead in implementing the home appliance replacement policy (+)
• ATAT US/TCOM US:The year-on-year decline in hotel RevPAR narrowed in the second week of August, showing resilient in hotel demand.(+/+)
• ATAT US/TCOM US: MCT plans to cut the prices of scenic spot tickets, bodes well to tourism demand. (+/+)

• US stocks ended mixed on Monday as investors prepared for a week of key economic data
• SMC reported a 7% decrease in net profit to 48.7 billion yen for April-June 2024. The decline was attributed to weak semiconductor-related investment
• Japanese automakers Honda and Nissan are developing supply chains for recycled plastic to meet potential European regulations requiring 25% recycled plastic in new vehicles by 2031

• Market volatility has skyrocketed amid uncertainty over U.S jobs health, the systemic unwinding of JPY carry trade and the U.S. presidential race. 
• The key takeaway is the cocaine like emotional roller coaster market, VIX spiked and plunged like never before in a week, indicating a bipolar market.    
• Given many investors are holding on to handsome returns YTD, it is normal to be cautious to lock-in their performance bonus, and rotate to income-focused equities and bonds. 

• Watch for a ‘megaquake’ reversal after a big rotation for names deemed to be winners/losers on Friday on heightened expectations for a major Nankai Trough earthquake over the w/e
• Retail related should rebound sharply after a solid 1Q showing from 3099 Isetan Mitsukoshi, with several related names yet to rebound on concerns the stronger yen will curb tourist spending.
• 1911 Sumitomo Forestry business briefing Friday confirms the strength of its US housing business, with it likely to easily exceed its latest MTP.

• Japan market had the most extreme market reaction due to surprise interest rate hike that prompted unwinding of the JPY carry trade.   
• Nikkei 225 and TOPIX are 18% and 16% off its respective peak achieved in July 2024. Right now, they are only 5% and 4% up YTD.   
• This is an unnerving plunge, investors will reduce risk exposure and rotate into dividend yielding stocks. Valuation wise, Japan is cheap trading 1-SD below its mean. 

• CPP and ADB are negotiating a $100 million investment in JBM Ecolife.
• Vedanta plans to allocate $2 billion for dividends in FY25, supported by strong cash flow.
• UltraTech Cement will launch an open offer on September 19 to acquire a 26% stake in India Cements.

• Hong Kong is trading at cheap levels based on P/E, P/BV, and P/CF, both against its own history and the valuation gap against other major markets. 
• Many companies are paying good dividends, the top-10 highest yielding stocks averages at 8.7%. Dividend cover is solid (>1x), and all are big MCAP with decent ADTV (>USD2m). 
• Investors have been underweight China/Hong Kong for a long time. Even high quality blue chip stocks are trading at single-digit PE and paying dividends >6%. 

• Baltic Dry Index (BDI)* settled at around ~1,808.00 points (USD) on July 29th, 2024 versus ~1,881.00 points (USD) on June 10th, 2024, which was the release date of our previous blog.
• The Index has been comfortably trading and with upward tendency within the historic average price range of 1,000 – 2,000 for most of the period starting January 2023 and up until today.
• BDI also surpassed the level of 2,000 in four notable occasions during the fourth quarter 2023, the first quarter 2024, the second quarter of 2024 as well as in July 2024, but all attempts were short-lived.

• The Global Emerging Markets Weekly summarizes the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.
• Macro data points: Chinese import and export growth, and inflation data.
• Companies mentioned:Samsung Electronics (005930 KS), Infosys Ltd (INFO IN), SK Hynix (000660 KS)

• Well that was an ‘interesting’ week to say the least. It could have been a lot worse
• With Topix down 2.2%, it is no surprise that 329 of the Topix 500 stocks ended in negative territory.
• In terms of factors, there was a clear selling in low PB names, but this was probably more a feature of the dumping of low-PB banks

• Markets have a tendency to bounce back after steep falls, offering opportunities for investors to benefit from the recovery. 
• By understanding historical data and market patterns, investors can make informed decisions and stay resilient during turbulent times.
• As we move forward, it’s important to remember that market fluctuations are a normal part of investing, and staying focused on long-term goals is crucial for success.

• Wheat prices surged due to strong demand and reduced European harvests. Favorable weather conditions in the US limited further gains.
• Corn prices initially rose on strong exports but retreated as the dollar strengthened and focus shifted to abundant supplies.
• Soybean prices experienced a short-lived rally due to short covering and a weak dollar. Expectations of record US production and sluggish demand capped gains.

• TSMC July revenues of NT$256.95 billion, +23.6% MoM & + a whopping 44.7% YoY
• Q224 silicon area wafer shipments amounted to 3,035 MSI, up 7.1% QoQ but down 8.9% YoY
• Q224 semiconductor sales reached $149.9 billion, +6.5% QoQ and +18.3% YoY.

• Welcome to Consumer Tales & Trends, your weekly roundup of the latest corporate developments, investment reports and sector events in the consumer industry.
• DFI Retail (DFI SP) : Improved profitability and robust cash flows makes the stock attractive with limited downside; it is trading at nearly 5% dividend yield.
• Ola Electric IPO was oversubscribed by 4.26 times and debuted at par with the issue price of Rs76 at the exchanges today

• AUCTUS PUBLICATIONS ________________________________________ Panoro Energy (PEN NO)C; Target price NOK52 per share: All eyes on EG – 1H24 production was 9,168 bbl/d.
• EG and Gabon production had already been disclosed.
• 1H24 production in Tunisia was 1,670 bbl/d (we forecasted 1,760 bbl/d) given subdued activities.

• US stocks rally after a drop in weekly jobless claims to 233,000, below expectations, providing a positive signal for the labor market
• Tokyo Electron revised up its FY2024 net profit forecast by 31% to 478 billion yen, driven by strong AI-related demand for memory chips
• INPEX will buy back up to 80 billion yen of shares, the highest ever, and increase its annual dividend by 12 yen to 86 yen

• 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

• This week will be a lightning-fast one. I need to cover a lot, so I’ll give high-level summaries instead of going deep unless necessary. I will be honest – it’s a bit scuffed, but if I don’t put it out, I’ll get further behind on semiconductor earnings.
• On semiconductor beat on Chinese industrial strength. It looks cheap.
• Lattice is likely stuffing the channel, and the divergence between AMD’s embedded and Lattice means their channel is worse off. Amkor saw real weakness in industrial, and that’s what made the guide miss. Arista had a clean beat; I think they are sandbagging forward revenue.

• ARM +11% after a broker upgrade yesterday will see Softbank Group (9984 JP) rebound sharply off heavily sold levels yesterday, despite its surprise Y500bn buyback.
• Tech wide relief rally in the US sets the tone for a very strong day in Japan, helped by strong earnings by the likes of TEL (8035) and Kokusai (6525).
• Jobs data saw leisure and powersports names in the US rally which should help the likes of Yamaha Motor (7272 JP) and KHI (7012 JP) rebound sharply also.

• BABA US/PDD US/JD US: Douyin launches new merchant tool designed to avoid low-price competition (+/+/+)
• BABA US/JD US: JD strategy change to focus on beauty products (-/+)
• BABA US: Freshippo launches self-branded products on the Lazada. (/)

• 981 HK/1347 HK: Semiconductor export growth remained robust in July (+/+)
• 1211 HK/LI US/NIO US/1810 HK/XPEV US: 2024 week 31 EV makers started to bifurate .(/////////)
• 1810 HK: Xiaomi’s smartphone unit volume sales in Japan grow triple-digit y-o-y in 2Q24 (+)

• Reliance Industries obtained over $7 billion in offshore financing for capital expenditure and debt refinancing.
• Adani Enterprises plans a $1 billion share sale via a Qualified Institutional Placement.
• Marico resumes operations in Bangladesh after political unrest, diversify market presence.

• Early gains in US stocks fizzles out; Vix volatility index remains elevated at around 28 points
• Mixed bag of Japanese earnings; auto makers Honda and Mazda both post decent numbers on yen weakness and just having the right product in the market
• Super Micro shares dropped 15% on Q4 results, highlighting supply-chain issues. This creates a potential buy opportunity for Nidec, down 12% since Q1.

• The companies that suffered exchange losses in FY23 due to Rmb depreciation will now benefit from potential Rmb appreciation in 2H24 and FY25. Meanwhile, gainers will become losers. 
• The beneficiaries are Air China Ltd (753 HK), Shenzhen International (152 HK), China Southern Airlines (1055 HK), Xinjiang Goldwind (2208 HK), and China Eastern Airlines (670 HK). 
• Fosun Tourism (1992 HK), China East Education (667 HK), and China Communications Construction (1800 HK) may need to book exchange losses (vs. gains in FY23). 

• Plenty of names which continue to look oversold in the recent volatility after posting better than expected numbers yesterday including Sony and Lasertec.
• Puma -12.6% after 2Q numbers and guidance missed, setting a negative tone for sportswear including 7936 Asics which has been in play after strong earnings and recent large share placement.
• Numbers for Shiseido and Kose point to diverging paths, which looks conducive for the 4922-4911 pair setup.

• Tata Motors introduces the Tata.ev app to help EV owners find and navigate to reliable charging stations.
• Bharti Airtel postpones the call for INR15,000 crore of its rights issue.
• SBI will deploy 2,000 executives to enhance its wealth management services, aiming to attract high-net-worth individuals.

• Hello! I went on a short hike this weekend, which always seems to cause something to change.
• What changed was that we are seeing a very large leveraged unwind in the market, driven by the BOJ’s hike in interest rates.
• Let me write out the series of events. First and foremost, last week, we saw some of the first macro jitters. The CPI came to light, which was viewed as positive. But then NFP showed a bit of weakness.

• US stocks snapped a three-day losing streak as investors set aside recession worries
• All 11 sectors of the S&P 500 posted gains, with megacap tech stocks leading the rebound; Nvidia increased 3.8%, and Meta Platforms rose 3.9%.
• The VIX fell by 10.8 points to end the session at 27.71

• Bangladesh, India’s 2nd largest trading partner in Asia is under a political crisis leading to instability and uncertainty. 
• Companies impacted by Bangladesh Crisis in India across sectors and across market caps listed below. 
• There might be short-term impact, but in long run, there would not be much impact as overall exposure is not that much.

• Websol Energy System (WESL IN) has upgraded from PERC to TOPCon technology, significantly expanding its production capacity.
• The shift to advanced TOPCon cells positions Websol for higher efficiency and growth, with 75% capacity utilization achieved shortly after the upgrade.
• Earlier, the Company has underperformed due to less efficient technology and a history of non-performance of promoters.

• Sheikh Hasina resigned, leading to chaos in Bangladesh and the formation of an interim government in Bangladesh.
• Political instability could disrupt India-Bangladesh trade, delay the FTA, and intensify regional strategic concerns, including China’s growing influence.
• Indian companies will also be impacted by this geopolitical issue, as India exports 35% of its cotton to Bangladesh and imports ready-made garments from the same country.

• US rebound lacks breadth, and while tech should be strong to start it may be too early to predict an extended rally off the lows in Japan after yesterday’s gains.
• An SMCI after-market miss is dulling the mood which may also dent sentiment for AI/SPE related to start.
• A good print from CAT sets a positive tone for the likes of 6301 Komatsu and 6326 Kubota who were both sold heavily in the recent panic.

• BILI US: Bilibili’s <Three Kingdoms: MDTX> Shows Significant Grossing Ranking Rebound After Season 2 Update (+)
• TCOM US:Beijing’s tourist arrivals increased by 16.7% YoY in July (+)
• TCOM US: Amap Launches Airport Shuttle Service in Hong Kong (-)

• ONGC plans to increase gas production from 1,527 to 1,675 MMSCM by drilling new wells
• Vedanta aims to reduce debt by $3 billion through cash flow, asset sales, and strategic measures
• Tata Power will acquire Paradeep Transmission Ltd to build and operate a 765 kV transmission line

• 1211 HK: BYD and Uber reach agreement to launch 100,000 vehicles globally (/)
• AAPL US: Huawei double-hinge folding device has begun production (-)
• Macro News Update: The State Council Releases the “Opinions on Promoting High-Quality Development of Service Consumption,” Primarily Focusing on Supply-Side Improvement.(+)

• Nikkei 225 dropped 12.4% on August 5, 2024, amid yen strength and recession fears in the U.S., triggering circuit breakers.
• Economic uncertainties, geopolitical tensions, and interest rate changes are heightening market volatility, impacting global investor sentiment and financial stability.
• The Yen Carry Trade has faced turmoil due to rising Japan interest rates, Fed comments on rate cuts, and a weaker-than-expected US job report, leading to substantial market sell-offs.

• Stocks plummeted on Monday, with the Dow suffering its worst day in nearly two years due to growing concerns over the U.S. economy. The Dow dropped 1,033 points
• The Cboe Volatility Index surged to its highest since early 2020, reflecting heightened market anxiety
• Nikkei futures rebounded to 33,830 yen, 2,450 yen higher than the closing price of the OSE.

• A week dominated by earnings reports, particularly in the semiconductor industry
• Microsoft and AWS’s strong capex spending indicates a positive outlook for data center infrastructure
• AMD’s revenue growth driven by data center and client segments, with potential for further growth in the next quarter due to capacity constraints and solid execution under CEO Lisa Su

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• The amount of deposits in the US banking system are substantial in absolute terms and compared with recent periods and older periods
• Of the USD17.4tr in deposits in the US banking system, 86% is liquid, available to access
• Alongside concerns about the S&P 500 Index or the broad US stock market, we believe it is worthwhile to keep in mind the amount of depositor liquidity

• More tech weakness in the US but most names off their lows, with Japan futures pointing to a recovery
• Big margin calls yesterday at Japanese retail brokers may see continued forced selling in the most crowded names.
• A quick glance at names with upside catalysts/strong fundamental drivers which should have room to run on an overall market recovery.