In today’s briefing:
- Daiwa House REIT Placement – Well-Flagged but Low on DPU Accretion
- Softbank Short Resistance
- Fast Retailing: The Fast Retailing to Topix Ratio Hitting Resistance Near The Pre-COVID Peak
- Can Companies Barely Meet Independent Director Requirement and Shy Away from Diversity Create Value?
Daiwa House REIT Placement – Well-Flagged but Low on DPU Accretion
- Daiwa House Reit Investment (8984 JP) is looking to raise around US$98m to acquire four new properties.
- Overall, the deal is well flagged with Daiwa House REIT (DHR) making capital raises almost an annual routine. The acquisition would be accretive to DPU as well.
- In this note, we will look at the assets to be acquired, impact on forecast and portfolio, and run the deal through our framework.
Softbank Short Resistance
- Softbank (9982 JP) is knocking on 6,000 compelling resistance that sets up a short trade just under this barrier. 5,300 lower pattern support is the level to test/break.
- RSI is also building energy for a powerful breakout from the triangle/flat range with a bear spin.
- 6,000 is a stiff barrier and if it caps will set in motion a higher degree decline to retest the 4,200-macro support line.
Fast Retailing: The Fast Retailing to Topix Ratio Hitting Resistance Near The Pre-COVID Peak
- Fast Retailing (9983 JP) has rallied 60% during the last three-months on better-than-expected Q3 performance and a relatively strong bounce in Topix exceeding the upper-end of the trend-channel by 3%.
- Although 20% below the all-time high, reached during the COVID pandemic, the Fast Retailing to Topix ratio is currently near the pre-COVID peak and starting to show some resistance.
- We would look to short Fast Retailing with expectations of weakness in overseas markets such as North America and Europe in addition to the already struggling Chinese market.
Can Companies Barely Meet Independent Director Requirement and Shy Away from Diversity Create Value?
- The number of companies that meet the requirement has increased since the listing criteria for prime market specified specific numbers. However, the majority of companies have managed to meet 30%.
- It’s clear that once the numerical criteria for board diversity as well as ％ independent directors were specified, it would have gone all the way. But this couldn’t be done.
- It is concerned that Japanese companies may be distancing themselves from the need to listen to a wide range of opinions and create new value.
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