Daily Brief Thematic (Sector/Industry): Ohayo Japan | Eighth Day of Gains and more

• The S&P 500 and Nasdaq each marked their eighth consecutive day of gains, a first in 2024
• Tokyo Metro is preparing for a late October listing on the Tokyo Stock Exchange, with an expected market capitalization of 640-700 billion yen
• Canadian convenience store giant Alimentation Couche-Tard has made a takeover offer for Seven & I Holdings

• Estee Lauder continues to  underwhelm on its China strategy, making names with less country exposure such as Kose look increasingly attractive
• While the 7&I deal outcome remains highly  uncertain, NKY225 replacement candidates should see a lift in the short-term
• This includes PPIH, which looks oversold after yesterdays negative price reaction to the Founder’s 22 year old son being promoted to a non-exec director.

• There has been a long-term trend of market concentration in Japan’s retail sector for more than a decade.
• But consolidation is accelerating due to the pressures to find growth in a depopulating market and the winner takes all phenomenon which rewards the leading chains.
• With higher growth and greater access to capital for the best retailers, the net result is dramatically higher levels of M&A in sectors like drugstores and even supermarkets.  

• Cabinet Approves INR 33,700 Crore Infrastructure Project, including rail, and new airport
• Adani Power in Negotiations to Acquire Reliance Power’s 600-MW Thermal Plant
• Hero MotoCorp Faces INR 17 Crore Tax Notice from Delhi GST Authorities

• Q1FY25 results of the leading Indian pharmaceutical companies showed healthy and broad-based growth of the Indian pharmaceutical market, which grew 8.7% in Q1FY25.
• Most of the top listed players registered double-digit revenue growth from their respective India formulation segments. Focus on chronic therapies remained major growth driver.
• The Nifty Pharma Index has outperformed the benchmark Nifty 50, rising 32% YTD. The benchmark index has gained just 13% over the same period.

• DRAM revenues amounted to $23.3 billion in Q224, representing increases of 28.3% QoQ and 110.5% YoY.
• In the case of NAND, Q224 revenues amounted to $16.5 billion, representing increases of 17% QoQ and 83% YoY.
• Unprecedented demand for HBM & DDR5, robustly increasing content per box for both PC & Smartphone, looming capacity constraints, more/better LTA coverage are all mounting tailwinds for the memory segment 

• Lots of inquiries and discussions about the semiconductor market this week, stock market movements relatively flat
• Nvidia up 11%, AMD up 7%, Microsoft up 4% last week
• Market experiencing a dialing back of hype, some names still overvalued, but overall growth dynamics in semiconductors still intact

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• We review last week’s biopharma news for meaningful clinical data, regulatory updates, research innovation, and M&A.
• Last week, Medicare posted the first negotiated prices for Part D drugs, an additional 11% discount by our estimate.
• Mpox declared a global emergency, as the SIGA antipox treatment drug failed study, but mpox vaccine makers BVNRY and GOVX got a boost. 

• The US cannabis MSOS ETF ended the week +7.05%, while the global YOLO ETF finished +7.03%.
• The MJUS ETF rebalancing drove considerable volatility in the underlying, with MariMed (CSE: MRMD, OTCQX: MRMD) and TerrAscend (TSX: TSND, OTCQX: TSNDF) both up more than 30% in the last five sessions, while Curaleaf (TSX: CURA, OTCQX: CURLF) and Green Thumb Industries (CSE: GTII, OTCQX: GTBIF) ended in the red.
• The top 10 MSOs (by enterprise value) have reported 2Q earnings.