In today’s briefing:
- 2024 High Conviction: Junior Copper Miners
- Lower Fuel Price, Which Asia Pacific Airline Benefits and Suffers the Most?
- Ohayo Japan | TSE Increases Pressure on Parent/Child Structures; Rohm’s Big Bet on SiC Chips
- India Banks – Far Better Credit Metrics Seem Real, With Exceptional Long-Term Loan Growth Outlook
- Furniture/Furnishings Weekly – Hooker Furniture Beats on Improved Margins
- Weekly Sustainable Investing Surveyor – Week Ended December 8, 2023
- The Highlights – Cannabis News for the Week Ending December 8, 2023
2024 High Conviction: Junior Copper Miners
- 2023 was the year of Uranium. Both the underlying commodity and most uranium equity-linked stories performed strongly.
- 2024 will be the story about copper and supply side issues becoming front and center as the “energy transition” benefits copper usage.
- Buy a basket of junior copper companies with high M&A likelihood such as Los Andes Copper Ltd (LA CN), Solaris Resources (SLS CN), Arras Minerals (ARK V EQUITY), and Entree Resources (ETG CN).
Lower Fuel Price, Which Asia Pacific Airline Benefits and Suffers the Most?
- Jet fuel price has declined in the past two months and is 20% lower than the September peak. Positive for airlines but we have yet to see any earnings upgrade
- All the Chines state carriers (Air China, China Eastern and China Southern) and Taiwan’s EVA Airways are unhedged, benefiting the most from this lower fuel price trend
- Worst off due to fuel hedge cover at higher than current market prices are Qantas Airways (75% hedged), Air New Zealand (54% hedged) and Japan Airlines (40% hedged)
Ohayo Japan | TSE Increases Pressure on Parent/Child Structures; Rohm’s Big Bet on SiC Chips
- Overseas: SPX +0.4%, Fed meeting & CPI today; Macy’s +19% on buyout plan;
- Today: NKY Futs +0.8% v cash. JPY146.2; TSE asks companies to improve disclosure on subsidiary companies
- JapanX: Rohm’s multi-billion-yen investment in SiC power chips signals takes advantage of government support for chip industry
India Banks – Far Better Credit Metrics Seem Real, With Exceptional Long-Term Loan Growth Outlook
- There are few banking systems in the world or in Asia-Pacific that show such a steady but significant reduction in bad loans as in India.
- Credit costs can remain subdued for sometime with better NPL levels and this can also lead the way to better loan volume, as loan officers take on more risk.
- Banking penetration remains incredibly low in India compared with almost all countries in the region, and this means that there can be sustained robust growth.
Furniture/Furnishings Weekly – Hooker Furniture Beats on Improved Margins
- Hooker Furniture results highlighted the past week in the furniture/furnishings space.
- Hooker reported EPS of $0.65 on sales of $116.8 million, both ahead of FactSet consensus estimates of $0.28 and $116.3 million, respectively.
- A year ago, Hooker reported EPS of $0.42.
Weekly Sustainable Investing Surveyor – Week Ended December 8, 2023
- The WTR Sustainable Index was down by 0.4% W/W versus the S&P 500 Index (up 0.2%), the Russell 2000 Index (up 1.0%), and the Nasdaq Index (up 0.5%).
- Energy Technology (13.2% of the index) was down by 3.8%, while Industrial Climate and Ag Technology (50.5% of the index) was up 1.1%, ClimateTech Mining was down 1.6%, and Advanced Transportation Solutions was down 1.8%.
- Top 10 Performers: VIEW, CPTN, LILM, ALTA, SPI, FE, WBX, PEV, EGT, CMC
The Highlights – Cannabis News for the Week Ending December 8, 2023
- It was another strong week for cannabis stocks, with the US cannabis MSOS ETF and the global YOLO ETF gaining 7.65% and 5.65%, respectively.
- MSOS is now +7.62% YTD and +53.91% since the HHS recommended Schedule III on August 29, 2023.
- The MSOS ETF had $29,340,300 in inflows this week. Some large investors are waiting for the DEA response prior to pushing in their chips, but others are comfortable increasing allocations in advance.
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