Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Event-Driven

<ul>
<li>A trade idea involving <a href="https://www.smartkarma.com/entities/kirin-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:16977:1" rel="noopener">Kirin Holdings (2503 JP)</a> from a Holdco perspective, which we suggested last year outperformed Topix by more than 30% in the first 9 months of 2022.</li>
<li>Since November 2022, Kirin has underperformed Topix by 18% (driven by input cost inflation) to push the Holdco discount yet again to an attractive level.</li>
<li>The price hike announcement yesterday could change the cost inflation narrative and help Kirin to keep on unwinding the Holdco discount.</li>
</ul>


A trade idea involving Kirin Holdings (2503 JP) from a Holdco perspective, which we suggested last year outperformed Topix by more than 30% in the first 9 months of 2022.
Since November 2022, Kirin has underperformed Topix by 18% (driven by input cost inflation) to push the Holdco discount yet again to an attractive level.
The price hike announcement yesterday could change the cost inflation narrative and help Kirin to keep on unwinding the Holdco discount.


Kirin’s Holdco Discount Could Keep Unwinding After The Price Hikes Announcement

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS: SPX down 3 in a Row as  Fed Hawks out in force; Oil bucks trend ;  P&amp;G see weak sales; Musk makes it up on TESLA's self driving</li>
<li>JAPAN: Kishida Cabinet approval at record lows;  Activist ValueAct tgts S&amp;i(3382); Spate of Street upgrades to BUY incl General Contractors at MS; Japan CPI on tap.</li>
<li>DAILY NUGGET: Could be Nothing Burger but the costs of US default is rising as Debt Limit hit.</li>
</ul>


OVERSEAS: SPX down 3 in a Row as  Fed Hawks out in force; Oil bucks trend ;  P&amp;G see weak sales; Musk makes it up on TESLA's self driving
JAPAN: Kishida Cabinet approval at record lows;  Activist ValueAct tgts S&amp;i(3382); Spate of Street upgrades to BUY incl General Contractors at MS; Japan CPI on tap.
DAILY NUGGET: Could be Nothing Burger but the costs of US default is rising as Debt Limit hit.


Good Morning Japan |Fed Hawks Return; Earnings Weigh; ValueAct Tgts S&I(3382); Spate of JP BUY U/Gs

<ul>
<li>
OVERSEAS: SPX +1.4% ahead of Fed/CPI; Energy and Tech lead with Industrials; Boeing +3.8% poised for massive Air India order; GS restructures its Consumer Banking biz 
</li>
<li>
JAPAN:  Nikkei Futures point +0.6% vs Cash; Yen weakens to ¥137.6;  Govt clarifiies NISA expansiion-positive flows to stock mkt; Nov Beer sales weak; Mach Tool order in Nov -7.8%YoY 
</li>
<li>
DAILY NUGGET: We are bullish IHI(7013) on the acceleration of Boeing's orders but highlight some industry risks coming out of Europe to short-haul flights. 
</li>
</ul>



OVERSEAS: SPX +1.4% ahead of Fed/CPI; Energy and Tech lead with Industrials; Boeing +3.8% poised for massive Air India order; GS restructures its Consumer Banking biz 


JAPAN:  Nikkei Futures point +0.6% vs Cash; Yen weakens to ¥137.6;  Govt clarifiies NISA expansiion-positive flows to stock mkt; Nov Beer sales weak; Mach Tool order in Nov -7.8%YoY 


DAILY NUGGET: We are bullish IHI(7013) on the acceleration of Boeing's orders but highlight some industry risks coming out of Europe to short-haul flights.  



Good Morning Japan |Positive Start Ahead of Fed/CPI; Energy Gets a Break

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Berkshire appears set to exit <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a> partially or in full. But why signal to market well in advance?</li>
<li>
<a href="https://www.smartkarma.com/entities/united-tractors-tbk-pt" target="_blank" data-smartkarma-citation="entities:698:1" rel="noopener">United Tractors (UNTR IJ)</a>'s buyback should be impactful. They could do another one afterwards as they have lots of cash. This is a raging buy. Buy now. With both hands.</li>
<li>The BOJ was expected to change its ETF allocations. It stopped buying Nikkei 225 and JPX Nikkei 400 ETFs. As the world moves more to passive, expect float to decrease.</li>
</ul>


Berkshire appears set to exit BYD (1211 HK) partially or in full. But why signal to market well in advance?

United Tractors (UNTR IJ)'s buyback should be impactful. They could do another one afterwards as they have lots of cash. This is a raging buy. Buy now. With both hands.
The BOJ was expected to change its ETF allocations. It stopped buying Nikkei 225 and JPX Nikkei 400 ETFs. As the world moves more to passive, expect float to decrease.


Last Week in Event SPACE: BYD, Astra/United Tractor, Japan Passive, AGL, Genting Singapore

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mercari-inc" target="_blank" data-smartkarma-citation="entities:27149:1" rel="noopener">Mercari Inc (4385 JP)</a> will be added to the <a href="https://www.smartkarma.com/entities/tokyo-stock-exchange-tokyo-price-index-topix" target="_blank" data-smartkarma-citation="entities:22910:1" rel="noopener">Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX)</a> at the close on 28 July.</li>
<li>There are a lot of FFW changes, mainly reductions. This leads to large funding inflows on the large index stocks.</li>
<li>We estimate the inclusion of Mercari and the FFW changes will lead to a one-way turnover of 0.56% leading to a one-way trade of JPY 442.23bn (US$3.25bn).</li>
</ul>



Mercari Inc (4385 JP) will be added to the Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX) at the close on 28 July.
There are a lot of FFW changes, mainly reductions. This leads to large funding inflows on the large index stocks.
We estimate the inclusion of Mercari and the FFW changes will lead to a one-way turnover of 0.56% leading to a one-way trade of JPY 442.23bn (US$3.25bn).


TOPIX July Rebalance: Mercari Inclusion, FFW Changes, US$6.5bn To Trade

Japan

Asahi Group Holdings, Ltd. produces beer and other beverages including non-alcoholic drinks. The Company sells its products in Japan and overseas.

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Asahi Group Holdings (2502 JP)

Kirin’s Holdco Discount Could Keep Unwinding After The Price Hikes Announcement

With price hikes possibly turning around the recent negative sentiment, we think the Kirin Holdco trade could yet again get going in the short-term...

Oshadhi Kumarasiri

Good Morning Japan |Fed Hawks Return; Earnings Weigh; ValueAct Tgts S&I(3382); Spate of JP BUY U/Gs

Fed Hawks out in full force; Kishida Cabinet approval at record lows; Activist tgts S&i(3382); Spate of Street upgrades to BUY incl General...

Mark Chadwick

Good Morning Japan |Positive Start Ahead of Fed/CPI; Energy Gets a Break

Good Morning Japan: We strive to provide the best macro, stock and thematic overnight news that impacts your trading day in Japan. FOLLOW TO KEEP...

Mark Chadwick

Last Week in Event SPACE: BYD, Astra/United Tractor, Japan Passive, AGL, Genting Singapore

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

TOPIX July Rebalance: Mercari Inclusion, FFW Changes, US$6.5bn To Trade

Mercari will be added to the TPX at the close on 28 July. There are a lot of FFW changes that will result in one-way turnover of 0.56% leading to a...

Brian Freitas

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52-week Range

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