Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Today, <a href="https://www.smartkarma.com/entities/rakuten-group-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Group (4755 JP)</a> announced it would propose an amendment to its Articles at the AGM (28 March) to issue "Bond-Type Class Shares."   First reaction: You wot, mate?</li>
<li>The company states it wants to "strengthen its financial base through reducing interesting-bearing debt by equity-related financings and conduct proactive control of debt maturity schedule, etc."
</li>
<li>Now it wants to issue listed bond-type shares. Dividends not interest. The last Japanese issuer of something similar was NEC in 2001. Few will remember, so we study the situation.</li>
</ul>


Today, Rakuten Group (4755 JP) announced it would propose an amendment to its Articles at the AGM (28 March) to issue "Bond-Type Class Shares."   First reaction: You wot, mate?
The company states it wants to "strengthen its financial base through reducing interesting-bearing debt by equity-related financings and conduct proactive control of debt maturity schedule, etc."

Now it wants to issue listed bond-type shares. Dividends not interest. The last Japanese issuer of something similar was NEC in 2001. Few will remember, so we study the situation.


Rakuten's New "Bond-Type Share" Issuance - Quite Quirky to Quantulate Rakuten's Quisquous New Quoz

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>Topix added 1.7%, driven by speculation that the Government Pension Investment Fund (GPIF) will increase its investment ratio in Japanese stocks</li>
<li>Retail stocks notable performers this week as the TSE's retail sector hit a year-to-date high, surging 21% since January</li>
<li>Notable performers this week included Fujikura on street upgrades, Ito-en after announcing a new marketing campaign, and Ebara's gaining recognition as a laggard</li>
</ul>


Topix added 1.7%, driven by speculation that the Government Pension Investment Fund (GPIF) will increase its investment ratio in Japanese stocks
Retail stocks notable performers this week as the TSE's retail sector hit a year-to-date high, surging 21% since January
Notable performers this week included Fujikura on street upgrades, Ito-en after announcing a new marketing campaign, and Ebara's gaining recognition as a laggard


'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

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.

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/156/485/original/2020-09-01_16-17-11.png?1598992358" class="editor-image img-responsive" data-smartkarma-image-id="156485"></figure>
<div class="content-caption">Source for all charts: Japan Analytics</div>
DAILY RESULTS &amp; REVISIONS REVIEW - We resume our series of daily Insights reviewing the results and revisions released by Japanese companies in the last 24 hours. Our purpose is to provide brief commentary on notable changes in trends in earnings for individual companies as well as offering an early warning system on any sector and peer group trends. Where relevant, we shall also comment on valuation and relative price outliers using our proprietary models. Our coverage covers all listed companies until the number of reporting companies precludes it. Since our last 'R&amp;R' Insight covering 14th August, both our aggregate Results Score and Revision Score have continued to set new lows, the latter driven mostly by interim revisions. The companies currently reporting are mainly those with January, April, July, and October year-ends. Accordingly, the results reflect the period of greatest COVID-19 economic dislocation.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/156/486/original/2020-09-01_18-43-01.png?1598993171" class="editor-image img-responsive" data-smartkarma-image-id="156486"></figure>
SECTOR TIMELINES - The significant Sector changes since our last Insight have been declines in the Commercial Services<a href="https://www.smartkarma.com/entities/funai-soken-holdings-inc" target="_blank" data-smartkarma-citation="entities:4622:1" rel="noopener">Funai Soken (9757 JP)</a> and <a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit (6098 JP)</a>) and Other Commercial Products (<a href="https://www.smartkarma.com/entities/toppan-printing-co-ltd" target="_blank" data-smartkarma-citation="entities:11875:1" rel="noopener">Toppan Printing (7911 JP)</a>) Sectors.  Only three Sectors -  Internet, Information Technology, and Non-Bank Finance have positive Scores. The Energy Sector has the strongest positive earnings momentum, while Transportation &amp; Logistics has the worst negative trend.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/156/487/original/2020-09-02_06-40-13.png?1598996429" class="editor-image img-responsive" data-smartkarma-image-id="156487"></figure>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/156/489/original/2020-09-02_06-41-01.png?1598996496" class="editor-image img-responsive" data-smartkarma-image-id="156489"></figure>
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<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/156/491/original/2020-09-02_06-44-36.png?1598996694" class="editor-image img-responsive" data-smartkarma-image-id="156491"></figure>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/156/492/original/2020-09-02_06-46-39.png?1598996814" class="editor-image img-responsive" data-smartkarma-image-id="156492"></figure>

DAILY STATS - With only nine announcements, our statistics section is brief. All four results scored negatively with an average Results Score of -6.0. The average year-on-year quarterly revenue change was -12%, and OPM declined by 2.7 percentage points. Only one of the five revisions scored positively - the average Forecast/Revision Score was -15.6.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/156/493/original/2020-09-01_16-10-30.png?1598997263" class="editor-image img-responsive" data-smartkarma-image-id="156493"></figure>
MEANWHILE - The Bank of Japan appears content with current market levels and has only intervened once in the last twenty trading sessions and for 20% less than the previous sixteen occasions.


Source for all charts: Japan Analytics
DAILY RESULTS &amp; REVISIONS REVIEW - We resume our series of daily Insights reviewing the results and revisions released by Japanese companies in the last 24 hours. Our purpose is to provide brief commentary on notable changes in trends in earnings for individual companies as well as offering an early warning system on any sector and peer group trends. Where relevant, we shall also comment on valuation and relative price outliers using our proprietary models. Our coverage covers all listed companies until the number of reporting companies precludes it. Since our last 'R&amp;R' Insight covering 14th August, both our aggregate Results Score and Revision Score have continued to set new lows, the latter driven mostly by interim revisions. The companies currently reporting are mainly those with January, April, July, and October year-ends. Accordingly, the results reflect the period of greatest COVID-19 economic dislocation.

SECTOR TIMELINES - The significant Sector changes since our last Insight have been declines in the Commercial ServicesFunai Soken (9757 JP) and Recruit (6098 JP)) and Other Commercial Products (Toppan Printing (7911 JP)) Sectors.  Only three Sectors -  Internet, Information Technology, and Non-Bank Finance have positive Scores. The Energy Sector has the strongest positive earnings momentum, while Transportation &amp; Logistics has the worst negative trend.






DAILY STATS - With only nine announcements, our statistics section is brief. All four results scored negatively with an average Results Score of -6.0. The average year-on-year quarterly revenue change was -12%, and OPM declined by 2.7 percentage points. Only one of the five revisions scored positively - the average Forecast/Revision Score was -15.6.

MEANWHILE - The Bank of Japan appears content with current market levels and has only intervened once in the last twenty trading sessions and for 20% less than the previous sixteen occasions. 

🇯🇵 JAPAN • Results & Revisions 09/01 - Ito En, Ain, Ride On Express

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

The global rally appears to be losing steam as the bearish rising wedge patterns we highlighted last week in the MSCI ACWI, ACWI ex-US, EM, and EAFE indexes ended up breaking down. Additionally, the aforementioned indexes and major indexes in Europe, Japan, and Hong Kong have been unable to break above longer-term resistance. While we believe global equities remain vulnerable to a pullback, some near-term consolidation is another possibility. For now we believe some consolidation makes sense as we remain in a sort of wait-and-see period as it relates to what will happen as countries and states aim to re-open.

The global rally appears to be losing steam as the bearish rising wedge patterns we highlighted last week in the MSCI ACWI, ACWI ex-US, EM, and EAFE indexes ended up breaking down. Additionally, the aforementioned indexes and major indexes in Europe, Japan, and Hong Kong have been unable to break above longer-term resistance. While we believe global equities remain vulnerable to a pullback, some near-term consolidation is another possibility. For now we believe some consolidation makes sense as we remain in a sort of wait-and-see period as it relates to what will happen as countries and states aim to re-open.

Global Equity Rally Losing Upside Momentum

Most major indexes are currently trading at the lower end of their May trading ranges. Barring improving headlines regarding tariffs &amp; trade or comments from the Fed suggesting a potential rate cut on the horizon we believe global markets are vulnerable to further weakness. We review all major markets and highlight attractive opportunities within Japan, and global real estate developers, and consumer staples stocks.

Most major indexes are currently trading at the lower end of their May trading ranges. Barring improving headlines regarding tariffs &amp; trade or comments from the Fed suggesting a potential rate cut on the horizon we believe global markets are vulnerable to further weakness. We review all major markets and highlight attractive opportunities within Japan, and global real estate developers, and consumer staples stocks.

Major Indexes Testing Support & Vulnerable to Further Weakness

Japan

ITO EN, LTD. produces various types of Japanese tea and canned beverages.

Price Gauge
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Ito En Ltd (2593 JP)

Japan Weekly | Nikkei Surges 2.3%

Speculation of GPIF increasing investment in Japanese stocks boosts Topix by 1.7%, retail sector hits year-to-date high with notable performers...

Mark Chadwick

🇯🇵 JAPAN • Results & Revisions 09/01 - Ito En, Ain, Ride On Express

DAILY RESULTS & REVISIONS REVIEW - We resume our series of daily Insights reviewing the results and revisions released by Japanese companies...

Campbell Gunn

Global Equity Rally Losing Upside Momentum

The global rally appears to be losing steam as the bearish rising wedge patterns we highlighted last week in the MSCI ACWI, ACWI ex-US, EM, and...

Vermilion Research

Major Indexes Testing Support & Vulnerable to Further Weakness

Most major indexes are currently trading at the lower end of their May trading ranges. Barring improving headlines regarding tariffs & trade or...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Rakuten's New "Bond-Type Share" Issuance - Quite Quirky to Quantulate Rakuten's Quisquous New Quoz

Rakuten (4755) today announced they would seek shareholder approval to issue "Bond-Type Shares". MILES better than Toyota's AA Shares. But odd....

Travis Lundy

Japan Weekly | Nikkei Surges 2.3%

​Speculation of GPIF increasing investment in Japanese stocks boosts Topix by 1.7%, retail sector hits year-to-date high with notable performers...

Mark Chadwick

🇯🇵 JAPAN • Results & Revisions 09/01 - Ito En, Ain, Ride On Express

DAILY RESULTS & REVISIONS REVIEW - We resume our series of daily Insights reviewing the results and revisions released by Japanese companies...

Campbell Gunn

Global Equity Rally Losing Upside Momentum

The global rally appears to be losing steam as the bearish rising wedge patterns we highlighted last week in the MSCI ACWI, ACWI ex-US, EM, and...

Vermilion Research

Major Indexes Testing Support & Vulnerable to Further Weakness

Most major indexes are currently trading at the lower end of their May trading ranges. Barring improving headlines regarding tariffs & trade or...

Vermilion Research

Speculation of GPIF increasing investment in Japanese stocks boosts Topix by 1.7%, retail sector hits year-to-date high with notable performers...