In today’s briefing:
- The Biggish Sep 2024 “Thursday-Friday Trade”
- Tokyo Metro (9023 JP) IPO: The Bull Case
- Uniqlo’s European Romance
- How to Make a Non-Functioning Statutory Auditor Function
The Biggish Sep 2024 “Thursday-Friday Trade”
- Every year it’s the same trade. This year it is Thursday and Friday. There is some funkiness to Monday too.
- There is meaningful directional buying on one day, which then kind of gets stretched a bit. This year, circumstances suggest high confidence buying should be at the top end.
- This year, because circumstances, I expect the trade is a lot larger than last year. I’d say ¥1.6trln.
Tokyo Metro (9023 JP) IPO: The Bull Case
- Tokyo Metro (TKYMETRO JP), a mass transit operator, is seeking to raise up to US$2.3 billion. Pricing is on 15 October, and the listing is on 23 October.
- Tokyo Metro is held 53.42% by the Minister of Finance and 46.58% by the Tokyo Metropolitan Government.
- The bull case rests on a core high-quality asset, future growth drivers, top-quartile profitability, high FCF generation, and peer-leading dividend payout.
Uniqlo’s European Romance
- Uniqlo’s European arm is on a roll, with more stores, higher sales and a loyal fan base. 35% of customers were under 29 last year up from 16% in 2019.
- Uniqlo is also doing better at home but it needs the boost from newer markets given concerns over growth in China.
- And it is far too early to know whether GU’s formal launch in the US will pay off but so far so good.
How to Make a Non-Functioning Statutory Auditor Function
- Information asymmetries between shareholders/investors and board directors, between inside and outside board directors, between inside and outside statutory auditors, and between insiders and the rest are constant challenges.
- Statutory auditors cannot be dismissed and have significant powers, including the right to investigate, and since statutory auditors are board members, they can attend and speak at board meetings.
- To make statutory auditors function, establish a process for nominating statutory auditors, raise the compensation of outside auditors, and run an open board meeting where board members’ comments are respected.
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