Daily Brief Thematic (Sector/Industry): Japan Weekly | Yay and more

In today’s briefing:

Japan Weekly | Yay, Equity Breakout, Toyota Cross-Share Unwind, Problems for Japan Aerospace Inc
China RRR Cut, Macro, & A Debate on – Property Pair Trade “Long China and Short HK” (Or the Reverse)
Mat-Chem Notes For the Week Ended September 8, 2023

Japan Weekly | Yay, Equity Breakout, Toyota Cross-Share Unwind, Problems for Japan Aerospace Inc

A positive week for Japanese equities. The Nikkei ended the week up 2.8% at 33,533, a two-month high
Toyota Group subsidiaries took the honours after Aisin announced a bullish MTP and an unwinding of cross-shareholdings
Japan’s aerospace industry got caught up in the problems impacting Pratt & Whitney’s turbofan engines. All the heavies are impacted, none more so than IHI

PBoC cut 25bps of RRR, being the second cut in 2023, and is expected to inject 500bn of liquidity into the system. The average RRR is 7.4% post cut
We look at the potential pair trade of China and HK for property. The original thesis was that China offers higher growth to investors
Now, the thesis no longer holds. The trade now becomes more complicated, given the moving pieces both from top down and bottom up. We recommend single stock trade.

WTR-CMI last week. Last week saw the market retrench, with the S&P 500 losing 1.3%, while our WTR-CMI index of 30 chemicals and materials technology stocks managed to modestly outperform the broader Russell 2000 index (-3.6%) by declining 3.4%.
Only one stock in our index, SXT, managed a positive gain for the week, appreciating 3%. FMC was the worst performer in our index, losing 12.3% of its value on a short seller’s report that the company felt obliged to address.
Ag-tech portfolio shuffles continue. Privately held DLF, a global seed company, completed the acquisition of CTVA’s alfalfa seed breeding program, which was announced last month.

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