Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

As global equity markets pull back amid the U.S./China tariff saga we continue to believe this is an attractive time to add exposure. This view is supported technically with all major global indexes (MSCI ACWI, ACWI ex-U.S., EAFE, and EM) pulling back to their respective 200-day moving averages. In this report we highlight important technical levels across global markets and highlight actionable opportunities from a bottoms-up perspective within Europe (attractive pullback opportunity on the STOXX Europe 600 index) and Japan, including stocks within Financials, Communications, Consumer Discretionary, and Manufacturing.

As global equity markets pull back amid the U.S./China tariff saga we continue to believe this is an attractive time to add exposure. This view is supported technically with all major global indexes (MSCI ACWI, ACWI ex-U.S., EAFE, and EM) pulling back to their respective 200-day moving averages. In this report we highlight important technical levels across global markets and highlight actionable opportunities from a bottoms-up perspective within Europe (attractive pullback opportunity on the STOXX Europe 600 index) and Japan, including stocks within Financials, Communications, Consumer Discretionary, and Manufacturing.

Opportunities in European & Japanese Equities

'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)

<div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/083/132/original/2019-03-25_18-58-11.png?1553507902" class="editor-image img-responsive" data-smartkarma-image-id="83132"></figure>Source: Japan Analytics
</div>There are currently 241 listed Japanese companies that can be categorised as Internet businesses. Our classification overlaps with the TOPIX-33 Information &amp; Communication sub-Sector but is broader in that it encompasses all companies listed on all sections and exchanges but is also narrower in that we have excluded Telecommunications (including <a href="https://www.smartkarma.com/entities/315" target="_blank" data-smartkarma-citation="entities:315:1">S</a><a href="https://www.smartkarma.com/entities/315" target="_blank" data-smartkarma-citation="entities:315:1">oftbank Group (9984 JP)</a>) and Information Technology companies. We have adopted a 'quantamental' approach which covers the long-term and current trends for Japan's Internet Sector as a whole, as well as eight sub-Sectors or Peer Groups and the Sectors' leading companies by market capitalisation.  Our focus is exclusively on the locally-listed universe and is based on disclosed financial and market data. We do not provide any forecasts, other than the companies' own forecasts and we do not attempt to make any business model or strategic judgments. Our focus is purely on financial and market performance. We do not cover unlisted and defunct companies such as Livedoor and, therefore, there is implicit survivor bias in the data. The broad themes that are developed in DETAIL below are grouped into six topics as follows: - • SUMMARY •  • FUNDAMENTAL OVERVIEW •  • SCORING - RESULTS &amp; REVISIONS / RELATIVE PRICE •  • RESULTS TRENDS •  • VALUATION • • RECOMMENDATIONS •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/083/206/original/2019-03-25_17-46-58.png?1553565764" class="editor-image img-responsive" data-smartkarma-image-id="83206"></figure><div class="content-caption">Source: Japan Analytics</div>OVERVIEW - As will be covered in greater DETAIL below, Japan has failed to evolve a substantial Internet Sector and, in many business models, has been passed by global competitors including in the home market. Although Internet Sector revenues have grown steadily and now account for close to 1% of the total for all listed companies, operating margins have declined by half in the last seven years and are now only four percentage points higher than the market average. Accordingly, as measured by our Results &amp; Revision Score, the Sector is close to a twelve-year low. The market's response is an unchanged Sector weight in the market composite despite the addition of 111 new companies in the last six years, and a Relative Price Score that has moved in a narrow range over that period. The Sector averages disguise the weak business and market performance of a handful of Sector leaders as well as the overvaluation of the Sector's more successful business models, which is partly a result of a lack of alternatives. Despite the world's most significant Internet investor - <a href="https://www.smartkarma.com/entities/315" target="_blank" data-smartkarma-citation="entities:315:1">Softbank Group (9984 JP)</a>'s Vision Fund - being based in Japan, this fund and other global investors in Internet business have been right to give Japan a 'pass'.


Source: Japan Analytics
There are currently 241 listed Japanese companies that can be categorised as Internet businesses. Our classification overlaps with the TOPIX-33 Information &amp; Communication sub-Sector but is broader in that it encompasses all companies listed on all sections and exchanges but is also narrower in that we have excluded Telecommunications (including Softbank Group (9984 JP)) and Information Technology companies. We have adopted a 'quantamental' approach which covers the long-term and current trends for Japan's Internet Sector as a whole, as well as eight sub-Sectors or Peer Groups and the Sectors' leading companies by market capitalisation.  Our focus is exclusively on the locally-listed universe and is based on disclosed financial and market data. We do not provide any forecasts, other than the companies' own forecasts and we do not attempt to make any business model or strategic judgments. Our focus is purely on financial and market performance. We do not cover unlisted and defunct companies such as Livedoor and, therefore, there is implicit survivor bias in the data. The broad themes that are developed in DETAIL below are grouped into six topics as follows: - • SUMMARY •  • FUNDAMENTAL OVERVIEW •  • SCORING - RESULTS &amp; REVISIONS / RELATIVE PRICE •  • RESULTS TRENDS •  • VALUATION • • RECOMMENDATIONS •Source: Japan AnalyticsOVERVIEW - As will be covered in greater DETAIL below, Japan has failed to evolve a substantial Internet Sector and, in many business models, has been passed by global competitors including in the home market. Although Internet Sector revenues have grown steadily and now account for close to 1% of the total for all listed companies, operating margins have declined by half in the last seven years and are now only four percentage points higher than the market average. Accordingly, as measured by our Results &amp; Revision Score, the Sector is close to a twelve-year low. The market's response is an unchanged Sector weight in the market composite despite the addition of 111 new companies in the last six years, and a Relative Price Score that has moved in a narrow range over that period. The Sector averages disguise the weak business and market performance of a handful of Sector leaders as well as the overvaluation of the Sector's more successful business models, which is partly a result of a lack of alternatives. Despite the world's most significant Internet investor - Softbank Group (9984 JP)'s Vision Fund - being based in Japan, this fund and other global investors in Internet business have been right to give Japan a 'pass'. 

🇯🇵 Japan • Internet Sector Review - 'Japan Passing'

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul class="">
<li>
Stable Bitcoin price in October - Bitcoin (BTC)'s price has remained surprisingly stable in October. While the global equity markets have been falling sharply with most major equity markets down more than 10% this month, Bitcoin's price is down only 4% this month to US$6,274 (as of October 30th). Bitcoin's ability to beat most global equity indices in October will be viewed positively by many institutional investors, especially as they attempt to diversify their assets that are less correlated with their equity holdings. </li>
<li>
First major blockchain powered smartphone - On October 23rd, Taiwan's HTC launched the world's first major blockchain based smartphone, called Exodus 1, which is based on the blockchain encryption and can only be purchased using Bitcoin or Ethereum. Exodus 1 costs 0.15 Bitcoin (US$964). The Exodus 1 product basically combines a regular smartphone with a cryptocurrency digital wallet so that consumers do not need two separate devices. </li>
<li>
Acquisition of Bitstamp by NXMH - On October 29th, NXMH, a Belgium-based investment company, acquired digital currency exchange Bitstamp, which is the largest digital currency exchange in the European Union by volume, with turnover of $100 million per day. NXMH is the European subsidiary of South Korea-based NXC, which also owns South Korean cryptocurrency exchange Korbit. 
</li>
</ul>



Stable Bitcoin price in October - Bitcoin (BTC)'s price has remained surprisingly stable in October. While the global equity markets have been falling sharply with most major equity markets down more than 10% this month, Bitcoin's price is down only 4% this month to US$6,274 (as of October 30th). Bitcoin's ability to beat most global equity indices in October will be viewed positively by many institutional investors, especially as they attempt to diversify their assets that are less correlated with their equity holdings. 

First major blockchain powered smartphone - On October 23rd, Taiwan's HTC launched the world's first major blockchain based smartphone, called Exodus 1, which is based on the blockchain encryption and can only be purchased using Bitcoin or Ethereum. Exodus 1 costs 0.15 Bitcoin (US$964). The Exodus 1 product basically combines a regular smartphone with a cryptocurrency digital wallet so that consumers do not need two separate devices. 

Acquisition of Bitstamp by NXMH - On October 29th, NXMH, a Belgium-based investment company, acquired digital currency exchange Bitstamp, which is the largest digital currency exchange in the European Union by volume, with turnover of $100 million per day. NXMH is the European subsidiary of South Korea-based NXC, which also owns South Korean cryptocurrency exchange Korbit. 



This Week in Blockchain & Cryptos: Bitcoin Diversification & First Blockchain Powered Smartphone

Doing bespoke work since 2002....., Custom Products Group

Patrick Hansen

Doing bespoke work since 2002.....

Custom Products Group

Custom Products was started 14 years ago at Lehman Brothers by current co-founder Patrick Hansen, CFA. After 3 years at Lehman, Patrick moved the team to Macquarie Securities where Simon Rigney (co-founder) joined. 3 years ago we took Custom Products independent. 

Our core strength can be summed up three words. 1- Customization - we have very little off the shelf products and most work is done on a one on one bespoke basis. 2- Speed - We pride ourselves in our ability to get requests back to the client very quickly. 3- Confidentiality - We do not redistribute. There is no grace period where we wait a week and then mass blast. Any request stops with that client.

We know that historically there has been a lot of leakage leading into Earnings Season. In a different life, I remember Fuji Photo calling me in and given me a preview of the earnings results 2 weeks before the actual announcement. It may not happen as much now in the large-cap space, so we took a look at the small-cap space with very little coverage to see if there are movements in consensus.

We know that historically there has been a lot of leakage leading into Earnings Season. In a different life, I remember Fuji Photo calling me in and given me a preview of the earnings results 2 weeks before the actual announcement. It may not happen as much now in the large-cap space, so we took a look at the small-cap space with very little coverage to see if there are movements in consensus.

Japanese Small-Cap Names with Consensus Changes Leading into Earning Season....

<ul class="">
<li>
Bitcoin's dominance accelerates. As of 14 September 2018, Bitcoin's market cap represented 55.8% of total cryptocurrencies market cap, rising steeply from the low 30% range in the early parts of this year. Despite Bitcoin's resurgence versus other cryptocurrencies, the overall crypto market has been in a deep bear market for much of 2018. As of 14 September, Bitcoin's price was US$6,551. Bitcoin price has been trading in a range bound between US$6,200 and US$7,300 in the past month. </li>
<li>
Insurance company plans to offer insurance coverage for hacking - Hanwha Insurance, which is one of the largest insurance companies in Korea, announced that it will start to provide insurance coverage for  hacking among the major cryptocurrency exchanges including Bithumb, Upbit, Coinone, and Korbit. </li>
<li>
Citigroup plans to trade Bitcoin and Morgan Stanley is getting ready for Bitcoin derivatives trading- Citigroup plans to act as an agent issuing digital asset receipts (DARs) to enable institutional investors to trade major cryptocurrencies such as Bitcoin without direct ownership of those cryptocurrencies. Morgan Stanley is getting ready to provide Bitcoin swaps derivatives for its clients. </li>
</ul>



Bitcoin's dominance accelerates. As of 14 September 2018, Bitcoin's market cap represented 55.8% of total cryptocurrencies market cap, rising steeply from the low 30% range in the early parts of this year. Despite Bitcoin's resurgence versus other cryptocurrencies, the overall crypto market has been in a deep bear market for much of 2018. As of 14 September, Bitcoin's price was US$6,551. Bitcoin price has been trading in a range bound between US$6,200 and US$7,300 in the past month. 

Insurance company plans to offer insurance coverage for hacking - Hanwha Insurance, which is one of the largest insurance companies in Korea, announced that it will start to provide insurance coverage for  hacking among the major cryptocurrency exchanges including Bithumb, Upbit, Coinone, and Korbit. 

Citigroup plans to trade Bitcoin and Morgan Stanley is getting ready for Bitcoin derivatives trading- Citigroup plans to act as an agent issuing digital asset receipts (DARs) to enable institutional investors to trade major cryptocurrencies such as Bitcoin without direct ownership of those cryptocurrencies. Morgan Stanley is getting ready to provide Bitcoin swaps derivatives for its clients. 



This Week in Blockchain & Cryptos: Insurance For Hacking, Bitcoin Swaps Trading, & Bitcoin Dominance

Japan

Digital Garage, Inc. is a web solution provider and a business incubator.  The Company provides Internet communications and strategy planning, electronic commerce solution tools, web creation and enhancement, and Internet advertising consulting services.

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Digital Garage (4819 JP)

Opportunities in European & Japanese Equities

As global equity markets pull back amid the U.S./China tariff saga we continue to believe this is an attractive time to add exposure. This view is...

Vermilion Research

🇯🇵 Japan • Internet Sector Review - 'Japan Passing'

There are currently 241 listed Japanese companies that can be categorised as Internet businesses. Our classification overlaps with the TOPIX-33...

Campbell Gunn

This Week in Blockchain & Cryptos: Bitcoin Diversification & First Blockchain Powered Smartphone

Stable Bitcoin price in October - Bitcoin (BTC)'s price has remained surprisingly stable in October. While the global equity markets have been...

Douglas Kim

Japanese Small-Cap Names with Consensus Changes Leading into Earning Season....

We know that historically there has been a lot of leakage leading into Earnings Season. In a different life, I remember Fuji Photo calling me in...

Custom Products Group

This Week in Blockchain & Cryptos: Insurance For Hacking, Bitcoin Swaps Trading, & Bitcoin Dominance

Bitcoin's dominance accelerates. As of 14 September 2018, Bitcoin's market cap represented 55.8% of total cryptocurrencies market cap, rising...

Douglas Kim

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