In today’s briefing:
- Daiho Post-Div STILL Trading Too Rich For the Event Trade
- Sticking With Cyclical Value and Defensives; Adding Large-Cap Japan Technology
Daiho Post-Div STILL Trading Too Rich For the Event Trade
- 10 days ago, Daiho Corp (1822 JP) announced an exit for Murakami-san who had gone from zero to 42% of voting rights buying 18% of volume over two years.
- They found a kind of white knight to buy the shares Murakami-san wanted to sell. The structure looks “fair” but is not. Almost all investors are now buying through terms.
- And the result looks expensive with a rather unfortunate forward flow profile.
Sticking With Cyclical Value and Defensives; Adding Large-Cap Japan Technology
- The lows have likely been established for this correction, but a bottoming process would likely take weeks or potentially months and could come with more tests of the lows.
- Japan’s TOPIX and Nikkei 225 are each testing their respective downtrends. The EURO STOXX 50 is testing resistance in the 4040-4090 range. Germany’s DAX is testing major resistance at 14,815-14,950.
- It is likely that this initial 2-3 week bounce has run its course; stick with cyclical value and defensives, areas we have been focused on for most of 2022.
Before it’s here, it’s on Smartkarma
