In today’s briefing:
- Quiddity Leaderboard TWSE Div+ Jun 23: New Potential Index Changes and Flow Expectations Update
- JAPAN FLOW: Foreign Investor Inflows May Increase
- PC Industry Monitor: Close Long Asus, Short Acer; Now Reverse the Trade and Long ACER Vs. Short Asus
- Taiwan Tech Weekly: Hon Hai Earnings; Long/Short Into Asustek Results; Quanta Tracking Apple Shares
- A Case Study of How Nothing Will Change Unless Management Changes
- Navigating The Grid
Quiddity Leaderboard TWSE Div+ Jun 23: New Potential Index Changes and Flow Expectations Update
- There have been some changes to my expectations for the TWSE Div+ index June 2023 index changes and capping flows.
- I currently see 5 ADDs/DELs. Some of these names are different from the ones I specified in my previous insight.
- In this insight, we take a look at my latest flow expectations.
JAPAN FLOW: Foreign Investor Inflows May Increase
- For years I have tracked investor category flows in Japanese stocks because I find them quite informative. I write about them every so often in an insight series JAPAN FLOW.
- The series, which I have written about for years, suggests foreign investors invest in Japan pro-cyclically and that correlates well to one relatively simple indicator.
- The policy backdrop points to greater corporate buying, greater foreign flow, greater selling by individuals and trust banks. The current timing probably matches.
PC Industry Monitor: Close Long Asus, Short Acer; Now Reverse the Trade and Long ACER Vs. Short Asus
- Acer shares slumped 7% in a day after the company missed analyst expectations. Acer has now underperformed Asustek since our March 21st Long Asustek vs. Short Acer recommendation.
- Despite the earnings miss, Acer management said it believed 1Q23 will be the trough for the business and metrics should be improving going forward.
- We believe one can consider reversing our Long Asustek vs. Short Acer Trade to become Long ACER vs. Short Asustek, and hold this trade through Asustek’s upcoming earnings results.
Taiwan Tech Weekly: Hon Hai Earnings; Long/Short Into Asustek Results; Quanta Tracking Apple Shares
- Major earnings this week including Hon Hai, Novatek, Wistron, Asustek, and more.
- We believe one can consider Long Acer vs. Short Asustek into Asustek’s results this week.
- Apple Suppliers — Quanta has tracked Apple’s success while others have lagged by a large margin.
A Case Study of How Nothing Will Change Unless Management Changes
- Underlying Canon’s long-standing underperformance, which had frustrated shareholders, was the lack of diversity on the board, which gave domestic institutional investors an excuse to vote against re-election of inside directors.
- Canon’s voluntary Nominating Committee also has challenges: with Mr. Mitarai, CEO since 1995, chairing the NC, it’s hard to imagine that discussions and decisions are conducted with objectivity and independence.
- Although a female independent director might be hired at next AGM in response to the low approval rate for Mitarai’s reappointment, it’s not expected to make any significant changes immediately.
Navigating The Grid
- As the current digital landscape continues to evolve, companies are racing to adapt to the new normal.
- Grid Dynamics has successfully capitalized on this demand, delivering services across Cloud, Data, AI, and Digital Experiences.
- As a result, the company has enjoyed impressive growth and significantly expanded its clientele over the last few years.
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