'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

ja research

ja research is an independent research platform focused exclusively on Japanese equities. Leveraging data and graphic analysis provided by Japan Analytics, we provide insights on small and medium-sized companies that have been ignored by the sell-side as well as challenging conventional wisdom on larger companies. We also offer analyst and corporate access, the latter with translation if required. 

Thematic (Sector/Industry)

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/061/034/original/2018-08-16_19-07-34.png?1534672507" class="editor-image img-responsive" data-smartkarma-image-id="61034"></figure><div class="content-caption">Source: Japan Analytics</div>A GOOD QUARTER - The Composite Results Score has now declined for seven months in a row and is implying a slowing of the upward momentum in earnings.  However, the score has only declined by 31 basis points since last quarter showing a degree of 'stability' seen only in 2011 in recent years.  The aggregate Forecast/Revision score has also continued to decline and is now lower for the fourth straight month. As would be expected, this score is a reliable leading indicator for the Results Score and suggests further weakening in the rate of earnings growth in the months ahead.  Neither score is, as yet, suggesting a decline in earnings before the end of the fiscal year.YEN CORRELATION WEAKENING - This quarter's earnings' stability was surprising given the relative strength of the Yen compared to a year ago. In the past and even as recently as 2016, a 5 per cent year-on-year decline has resulted in negative Results Scores. The year-on-year change in now positive so any negative impact will dissipate over the next two quarters.MARKET FOLLOWS MOMENTUM LOWER - The All Market Composite peaked on 23rd January and has since fallen by 11% despite a continuation of the Bank of Japan's ETF purchasing programme. Weakening earnings momentum and the overvaluation of many of the leading stocks, as in our '<a href="https://www.smartkarma.com/insights/japan-most-overbought-most-oversold-the-relative-price-score" target="_blank" data-smartkarma-citation="insights:21149">Nifty 50</a>' portfolio, have been contributing factors. With prospects for a much weaker Yen limited by the current trade negotiations between Japan and the United States, and with global growth slowing, we expect both Results and Revision Scores to trend lower, but to end the fiscal year in positive territory. Historically, the market has not risen during periods when both the Results and Forecast/Revision Scores have been trending down.<div class="content-highlight">MARKET RECOMMENDATION - Within a global portfolio, we would market-weight Japanese equities with a bias towards domestic sectors and not hedge the currency exposure.</div>SECTOR RESULTS SCORES -The good news is that only one sector, (Multi-Industry - 75% of which is <a href="https://www.smartkarma.com/entities/359" target="_blank" data-smartkarma-citation="entities:359:1">Japan Post [6178 JP</a>]) has a negative score - and its score is less negative than last quarter. Both the Media and Consumer Services sectors' scores turned positive and each increased by more than two points.  On the other hand, over half of our 29 sectors saw declining scores, although the number was lower than last quarter.  The top sectors in terms of quarter-on-quarter change were Energy, Consumer Services, Media, Information Technology and Other Commercial Products while the laggards were Non-Bank Finance, Chemicals, Construction, Machinery and Utilities. SECTOR REVISION SCORES - Five sectors have negative Forecast/Revision Scores with Utilities now joining Media, Multi-Industry, Autos and Banks from last quarter. The highest scores are in the Energy, Technology Hardware, Electrical Equipment, Retail and Information Technology sectors. Improvements of greater than one point were seen in Energy, Media and Machinery while Food, Beverages &amp; Tobacco, Chemicals, Utilities, Other Materials and Technology Hardware all lost more than one point. Overall eighteen sectors saw declines.REVISION V. RESULTS SCORES - The difference between the Results and Revision Scores is a good indicator of corporate expectations compared with the trailing-twelve-month reality. In some cases (e.g. Restaurants) the 'optimism' is due to a failure to revise forecasts in the light of weaker results. In others, such as Telecommunications, there is scope for upward revisions in the coming quarters.<div class="content-highlight">
THE OPTIMISTS
Restaurants • Other Materials • Electrical Equipment • Technology Hardware • Retail
THE PESSIMISTS
Banks • Autos • Telecommunications • Utilities • Media • Chemicals
</div>SECTOR PERFORMANCE - Over the last three months, our Japan Market Composite declined by 5.8%. Only four sectors saw an increase in value led by Telecommunications, Energy, Commercial Services and Information Technology. The largest declines were in the Building Materials, Metals, Real Estate Construction and Machinery sectors. Nine sectors are now negative over one year led by Building Materials, Metals and Food, Beverages &amp; Tobacco and only eight are up in double-digits led by Services and Information Technology. For the time being, Domestic Non-Manufacturing sectors 'rules the roost' and Domestic Cyclical sectors have taken over from Global Cyclicals in the 'doghouse'.'.<div class="content-highlight">
SECTOR RECOMMENDATIONS
Our most-preferred sectors are currently Energy, Healthcare, Telecommunications, Other Commercial Products and Information Technology.
Least-preferred sectors are Metals, Chemicals, Machinery, Autos, Construction, Real Estate, Building Materials, Food Beverages &amp; Tobacco and Utilities.
</div>TOP 5 LARGER PEER GROUPS - The top five Peer Groups capitalised at over ¥1 trillion are Machine Tools &amp; Presses, PC &amp; Computer Peripherals, Oil &amp; Gas Refining &amp; Marketing, Telecom Distribution Services and Sporting &amp; Outdoor Goods. The top twenty larger Peer Groups have gained 16% over one year but have declined by 4% on average the last three months.BOTTOM 5 LARGER PEER GROUPS - The bottom five Peer Groups capitalised at over ¥1 trillion are Audio/Visual Content, LCD/LED Materials &amp; Equipment, Electrical Engineering, General Contractors and Real Estate - Leasing. The bottom twenty larger Peer Groups have lost 2% over one year and 9% over the last three months. Only Security Services and Tobacco have risen since May.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/061/038/original/2018-08-19_19-33-03.png?1534674804" class="editor-image img-responsive" data-smartkarma-image-id="61038"></figure>

Source: Japan AnalyticsA GOOD QUARTER - The Composite Results Score has now declined for seven months in a row and is implying a slowing of the upward momentum in earnings.  However, the score has only declined by 31 basis points since last quarter showing a degree of 'stability' seen only in 2011 in recent years.  The aggregate Forecast/Revision score has also continued to decline and is now lower for the fourth straight month. As would be expected, this score is a reliable leading indicator for the Results Score and suggests further weakening in the rate of earnings growth in the months ahead.  Neither score is, as yet, suggesting a decline in earnings before the end of the fiscal year.YEN CORRELATION WEAKENING - This quarter's earnings' stability was surprising given the relative strength of the Yen compared to a year ago. In the past and even as recently as 2016, a 5 per cent year-on-year decline has resulted in negative Results Scores. The year-on-year change in now positive so any negative impact will dissipate over the next two quarters.MARKET FOLLOWS MOMENTUM LOWER - The All Market Composite peaked on 23rd January and has since fallen by 11% despite a continuation of the Bank of Japan's ETF purchasing programme. Weakening earnings momentum and the overvaluation of many of the leading stocks, as in our 'Nifty 50' portfolio, have been contributing factors. With prospects for a much weaker Yen limited by the current trade negotiations between Japan and the United States, and with global growth slowing, we expect both Results and Revision Scores to trend lower, but to end the fiscal year in positive territory. Historically, the market has not risen during periods when both the Results and Forecast/Revision Scores have been trending down.MARKET RECOMMENDATION - Within a global portfolio, we would market-weight Japanese equities with a bias towards domestic sectors and not hedge the currency exposure.SECTOR RESULTS SCORES -The good news is that only one sector, (Multi-Industry - 75% of which is Japan Post [6178 JP]) has a negative score - and its score is less negative than last quarter. Both the Media and Consumer Services sectors' scores turned positive and each increased by more than two points.  On the other hand, over half of our 29 sectors saw declining scores, although the number was lower than last quarter.  The top sectors in terms of quarter-on-quarter change were Energy, Consumer Services, Media, Information Technology and Other Commercial Products while the laggards were Non-Bank Finance, Chemicals, Construction, Machinery and Utilities. SECTOR REVISION SCORES - Five sectors have negative Forecast/Revision Scores with Utilities now joining Media, Multi-Industry, Autos and Banks from last quarter. The highest scores are in the Energy, Technology Hardware, Electrical Equipment, Retail and Information Technology sectors. Improvements of greater than one point were seen in Energy, Media and Machinery while Food, Beverages &amp; Tobacco, Chemicals, Utilities, Other Materials and Technology Hardware all lost more than one point. Overall eighteen sectors saw declines.REVISION V. RESULTS SCORES - The difference between the Results and Revision Scores is a good indicator of corporate expectations compared with the trailing-twelve-month reality. In some cases (e.g. Restaurants) the 'optimism' is due to a failure to revise forecasts in the light of weaker results. In others, such as Telecommunications, there is scope for upward revisions in the coming quarters.
THE OPTIMISTS
Restaurants • Other Materials • Electrical Equipment • Technology Hardware • Retail
THE PESSIMISTS
Banks • Autos • Telecommunications • Utilities • Media • Chemicals
SECTOR PERFORMANCE - Over the last three months, our Japan Market Composite declined by 5.8%. Only four sectors saw an increase in value led by Telecommunications, Energy, Commercial Services and Information Technology. The largest declines were in the Building Materials, Metals, Real Estate Construction and Machinery sectors. Nine sectors are now negative over one year led by Building Materials, Metals and Food, Beverages &amp; Tobacco and only eight are up in double-digits led by Services and Information Technology. For the time being, Domestic Non-Manufacturing sectors 'rules the roost' and Domestic Cyclical sectors have taken over from Global Cyclicals in the 'doghouse'.'.
SECTOR RECOMMENDATIONS
Our most-preferred sectors are currently Energy, Healthcare, Telecommunications, Other Commercial Products and Information Technology.
Least-preferred sectors are Metals, Chemicals, Machinery, Autos, Construction, Real Estate, Building Materials, Food Beverages &amp; Tobacco and Utilities.
TOP 5 LARGER PEER GROUPS - The top five Peer Groups capitalised at over ¥1 trillion are Machine Tools &amp; Presses, PC &amp; Computer Peripherals, Oil &amp; Gas Refining &amp; Marketing, Telecom Distribution Services and Sporting &amp; Outdoor Goods. The top twenty larger Peer Groups have gained 16% over one year but have declined by 4% on average the last three months.BOTTOM 5 LARGER PEER GROUPS - The bottom five Peer Groups capitalised at over ¥1 trillion are Audio/Visual Content, LCD/LED Materials &amp; Equipment, Electrical Engineering, General Contractors and Real Estate - Leasing. The bottom twenty larger Peer Groups have lost 2% over one year and 9% over the last three months. Only Security Services and Tobacco have risen since May.

Japan: Results & Revision Scores Summer 2018 Update - Market Composite, Sectors & Peer Groups

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<div>
<h2>This Week's Blockchain &amp; Crypto Headlines:</h2>
</div>
The following were the main headlines impacting the blockchain and cryptocurrencies sectors in South Korea, Japan, and globally in the past week. 
[SOUTH KOREA]
<ul>
<li>
Bithumb stops issuing new virtual accounts - Bithumb, the largest cryptocurrency exchange in Korea, announced that it will stop issuing new virtual accounts starting August 1st since it failed to renew a contract with NH Nonghyup Bank. However, customers who already have virtual accounts…</li>
</ul>


This Week's Blockchain &amp; Crypto Headlines:

The following were the main headlines impacting the blockchain and cryptocurrencies sectors in South Korea, Japan, and globally in the past week. 
[SOUTH KOREA]


Bithumb stops issuing new virtual accounts - Bithumb, the largest cryptocurrency exchange in Korea, announced that it will stop issuing new virtual accounts starting August 1st since it failed to renew a contract with NH Nonghyup Bank. However, customers who already have virtual accounts…


This Week in Blockchain & Cryptos: Legitimizing Cryptos in Korea & Top Bitcoin Cities in the World

The Japanese stock market continues to outperform the Korean stock market in July. TOPIX is up 2% while KOSPI is down 1.6% this month (as of July 26th).
The Korean government recently announced another major hike to the minimum wage (8,350 won or US$7.40 per hour), up 10.9% YoY and effective January 1st 2019. The minimum wage in Korea in 2019 will be only 5.7% lower than the average minimum wage in Japan. The gap in the minimum wage between Japan and Korea has been shrinking rapidly in the past several years. In 2016, Korea's minimum wage was 34% lower than the average rate in Japan. The sharp growth in the minimum wage has been especially apparent in Korea during the Moon Jae-In administration. Considering the fact that Japan's GDP per capita is nearly 40% higher than that of South Korea, one really has to ask the question about the difficulties of operating a business in South Korea vs. Japan using minimum wages as one of the criteria for a business owner.
The top three reports (in terms of views) on Smartkarma that are relevant for Japan and Korea in the past week were as follows:
<ul>
<li><a href="https://www.smartkarma.com/insights/japan-passive-the-nikkei-225-baskets-if-boj-changes" target="_blank" data-smartkarma-citation="insights:22367">JAPAN PASSIVE:  The Nikkei 225 Baskets if BOJ Changes</a></li>
<li><a href="https://www.smartkarma.com/insights/japan-passive-who-owns-what" target="_blank" data-smartkarma-citation="insights:22315">JAPAN PASSIVE:  Who Owns What?</a></li>
<li><a href="https://www.smartkarma.com/insights/japan-passive-boj-to-buy-less-nikkei-225-highly-likely" target="_blank" data-smartkarma-citation="insights:22484">JAPAN PASSIVE - BOJ To Buy Less Nikkei 225? Highly Likely</a></li>
</ul>

The Japanese stock market continues to outperform the Korean stock market in July. TOPIX is up 2% while KOSPI is down 1.6% this month (as of July 26th).
The Korean government recently announced another major hike to the minimum wage (8,350 won or US$7.40 per hour), up 10.9% YoY and effective January 1st 2019. The minimum wage in Korea in 2019 will be only 5.7% lower than the average minimum wage in Japan. The gap in the minimum wage between Japan and Korea has been shrinking rapidly in the past several years. In 2016, Korea's minimum wage was 34% lower than the average rate in Japan. The sharp growth in the minimum wage has been especially apparent in Korea during the Moon Jae-In administration. Considering the fact that Japan's GDP per capita is nearly 40% higher than that of South Korea, one really has to ask the question about the difficulties of operating a business in South Korea vs. Japan using minimum wages as one of the criteria for a business owner.
The top three reports (in terms of views) on Smartkarma that are relevant for Japan and Korea in the past week were as follows:

JAPAN PASSIVE:  The Nikkei 225 Baskets if BOJ Changes
JAPAN PASSIVE:  Who Owns What?
JAPAN PASSIVE - BOJ To Buy Less Nikkei 225? Highly Likely


Smartkarma’s Week That Was in JP/​KR: Japan Passive & Koreans' Rush to Buy Overseas Stocks

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

The insight <a href="https://www.smartkarma.com/insights/japan-passive-boj-heading-for-trouble-with-nikkei-225" target="_blank" data-smartkarma-citation="insights:21980">JAPAN PASSIVE:  BOJ Heading For Trouble with Nikkei 225</a> of a few days ago was a piece about the BOJ's impact on the Nikkei 225. The BOJ is a very big investor in passive strategies with a mark-to-market portfolio of some ¥25 trillion.  
But it is not The Biggest Japanese Passive Investor in Japanese Equities. That title belongs to another investor who has almost 50% more invested in passive strategies - the Government Pension Investment Fund also known as the GPIF. But others also run significant passive funds. The other three major public pensions (KKR, Chikyoren, and Shigaku Kyosai) also run large passive portfolios, and there are overseas investors who run significant passive portfolios.
I got questions asking "How do you estimate those numbers?? Those numbers look big to me!"
My reply is that the data is out there if you are diligent enough to look.
And when you do, it tells you a fair bit about the nature of what else is out there.

The insight JAPAN PASSIVE:  BOJ Heading For Trouble with Nikkei 225 of a few days ago was a piece about the BOJ's impact on the Nikkei 225. The BOJ is a very big investor in passive strategies with a mark-to-market portfolio of some ¥25 trillion.  
But it is not The Biggest Japanese Passive Investor in Japanese Equities. That title belongs to another investor who has almost 50% more invested in passive strategies - the Government Pension Investment Fund also known as the GPIF. But others also run significant passive funds. The other three major public pensions (KKR, Chikyoren, and Shigaku Kyosai) also run large passive portfolios, and there are overseas investors who run significant passive portfolios.
I got questions asking "How do you estimate those numbers?? Those numbers look big to me!"
My reply is that the data is out there if you are diligent enough to look.
And when you do, it tells you a fair bit about the nature of what else is out there.

<div class="content-highlight">
So many people around the world were fixated on France's FIFA World Cup win in the past week (I must admit, France does have a great soccer team and also a great national anthem! Perhaps my familiarity of France's national anthem is due to the movie Casablanca). In the midst of all this excitement, the Bitcoin price surged nearly 28% since recent lows. There appears to have been some short squeeze on the Bitcoin price, mainly driven by Blackrock's evaluation of cryptocurrencies, Goldman Sach's…
</div>


So many people around the world were fixated on France's FIFA World Cup win in the past week (I must admit, France does have a great soccer team and also a great national anthem! Perhaps my familiarity of France's national anthem is due to the movie Casablanca). In the midst of all this excitement, the Bitcoin price surged nearly 28% since recent lows. There appears to have been some short squeeze on the Bitcoin price, mainly driven by Blackrock's evaluation of cryptocurrencies, Goldman Sach's…


This Week in Blockchain & Cryptos: Bitcoin Short Squeeze, Blackrock, and Turkey

Japan

CyberAgent, Inc. operates blog media website, Ameba.  The Company also operates internet advertising agency, foreign exchange trading website, and creates PC and mobile contents such as advertisements and games. CyberAgent invests in companies with internet related business.

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CyberAgent Inc (4751 JP)

Japan: Results & Revision Scores Summer 2018 Update - Market Composite, Sectors & Peer Groups

A GOOD QUARTER - The Composite Results Score has now declined for seven months in a row and is implying a slowing of the upward momentum in...

Campbell Gunn

This Week in Blockchain & Cryptos: Legitimizing Cryptos in Korea & Top Bitcoin Cities in the World

This Week's Blockchain & Crypto Headlines: The following were the main headlines impacting the blockchain and cryptocurrencies sectors in...

Douglas Kim

Smartkarma’s Week That Was in JP/KR: Japan Passive & Koreans' Rush to Buy Overseas Stocks

The Japanese stock market continues to outperform the Korean stock market in July. TOPIX is up 2% while KOSPI is down 1.6% this month (as of July...

Douglas Kim

JAPAN PASSIVE: Who Owns What?

The insight JAPAN PASSIVE: BOJ Heading For Trouble with Nikkei 225 of a few days ago was a piece about the BOJ's impact on the Nikkei 225. The BOJ...

Travis Lundy

This Week in Blockchain & Cryptos: Bitcoin Short Squeeze, Blackrock, and Turkey

So many people around the world were fixated on France's FIFA World Cup win in the past week (I must admit, France does have a great soccer team...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japan: Results & Revision Scores Summer 2018 Update - Market Composite, Sectors & Peer Groups

A GOOD QUARTER - The Composite Results Score has now declined for seven months in a row and is implying a slowing of the upward momentum in...

Campbell Gunn

This Week in Blockchain & Cryptos: Legitimizing Cryptos in Korea & Top Bitcoin Cities in the World

This Week's Blockchain & Crypto Headlines: The following were the main headlines impacting the blockchain and cryptocurrencies sectors in...

Douglas Kim

Smartkarma’s Week That Was in JP/​KR: Japan Passive & Koreans' Rush to Buy Overseas Stocks

The Japanese stock market continues to outperform the Korean stock market in July. TOPIX is up 2% while KOSPI is down 1.6% this month (as of July...

Douglas Kim

JAPAN PASSIVE: Who Owns What?

The insight JAPAN PASSIVE: BOJ Heading For Trouble with Nikkei 225 of a few days ago was a piece about the BOJ's impact on the Nikkei 225. The BOJ...

Travis Lundy

This Week in Blockchain & Cryptos: Bitcoin Short Squeeze, Blackrock, and Turkey

So many people around the world were fixated on France's FIFA World Cup win in the past week (I must admit, France does have a great soccer team...

Douglas Kim

Smartkarma’s Week That Was in JP/KR: Japan Passive & Koreans' Rush to Buy Overseas Stocks