In today’s briefing:
- Ohayo Japan|Equities Bid Ahead of CPI Print; NUGGET:China Semi Derisking – The Winner Is…Yes, Japan!
- China Beer Sector: One of The Few Consumer Sectors That Are Still Trading Up After The Pandemic
- Global Exchanges – Pace of Revenue Diversification Differs Between DM and EM Exchanges
- China TMT Update-BZ/XPEV/BABA/PDD/1024.HK:Taobao’s Short Videos/SME Development Index/XPEV in Israel
- The Nasdaq’s Special Rebalance Is Not So Special
Ohayo Japan|Equities Bid Ahead of CPI Print; NUGGET:China Semi Derisking – The Winner Is…Yes, Japan!
- OVERSEAS. SPX +0.7% with all sectors in the green ahead of expected soft CPI print on Wed; Oil strong with weaker USD; MSFT wins as Activision purchase progresses
- JAPAN. NKY Futures +0.4% vs Cash; USDJPY 140.3; Markets start coalesing around BOJ policy shift; TSE kicks out 48 companies from Prime listing; Big Earnings Beat from Lawson(2651)
- NUGGET. Building a global semi-supply chain is a central tenet of Japan’s industrial policy. We think focusing on short term cyclical semi-weakness risks missing out on the home runs
China Beer Sector: One of The Few Consumer Sectors That Are Still Trading Up After The Pandemic
- China’s beer sector is still trading up, despite the deflation concerns of the overall China consumer sector.
- Visible ASP growth and margin improvement over the next few years make the sector an attractive investment opportunity.
- Prefer China Resources Beer Holdings (291 HK) as it offers the best risk-reward within the sector.
Global Exchanges – Pace of Revenue Diversification Differs Between DM and EM Exchanges
- Exchanges, especially in developed markets, continue to seek revenue streams outside of the traditional trading and transaction-based fees which has led to a mini-boom in exchange-driven M&A targeting diversification
- We use data and IT revenues as a proxy for “stickier” potentially recurring revenues in four DM and three EM exchanges, concluding that DM exchanges are under more diversification pressure
- We identify three buy opportunities in exchanges; we like Hong Kong Exchange, Deutsche Borse and we add Nasdaq, whilst we are negative on Coinbase which remains the exchange to avoid
China TMT Update-BZ/XPEV/BABA/PDD/1024.HK:Taobao’s Short Videos/SME Development Index/XPEV in Israel
- Boss Zhipin: SME Development Index rebound slightly in June, and labor subindex also marginally improved, but still far below the prosperity range
- XPEV: Xpeng establishes partnership with Freesbe for Israel market (+)
- BABA/PDD/1024.HK: Taobao launched a dedicated entrance to short videos (+/-/-)
The Nasdaq’s Special Rebalance Is Not So Special
- You might have heard the news that Nasdaq Inc announced1 a “special rebalance” for the Nasdaq 100; an index which tracks the largest technology stocks across a range of America’s sectors.
- This reshuffle seeks to “address overconcentration in the index by redistributing the weights”; specifically the weightings of the Big 7 (Google, Microsoft, Apple, Nvidia, Amazon, Tesla, and Meta) who, together, account for ~54% of the index.
- The rebalance will be based on the shares outstanding as of July 3rd, and changes are expected to be announced on July 14th; taking effect by July 24th2.
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