Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<p>With the Nikkei 225 index breaking 30k this month, we thought it pertinent to look in more detail at Japan positioning among Global fund managers.  Our data shows that Japan is underowned by Global managers versus its own history and held underweight versus the benchmark MSCI All Country World index.  Current positioning levels are towards their lowest ever levels, yet we are not seeing a sweeping reversal of sentiment in our data just yet, merely a stalling of the declines. </p><p>However, the outperformance of MSCI Japan versus the AC World index over the last 6-months and the psychological breaking of 30,000 in the Nikkei 225 index are both signs that momentum is gathering steam.   We see rising ownership levels in a number of key companies, led by <a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony Corp (6758 JP)</a> , <a href="https://www.smartkarma.com/entities/nintendo-co-ltd" target="_blank" data-smartkarma-citation="entities:5415:1" rel="noopener">Nintendo Co Ltd (7974 JP)</a> and <a href="https://www.smartkarma.com/entities/tokyo-electron-ltd" target="_blank" data-smartkarma-citation="entities:280:1" rel="noopener">Tokyo Electron (8035 JP)</a> and high conviction in <a href="https://www.smartkarma.com/entities/keyence-corp" target="_blank" data-smartkarma-citation="entities:3077:1" rel="noopener">Keyence Corp (6861 JP)</a> among Global investors.  Outside of these 4 stocks, we would highlight the largest index weight, <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a> as a laggard and a stock that has the potential to play a much greater role in Global portfolios going forwards.</p><p><em>Analysis taken from our Global active fund research, covering 386 managers with combined AUM of $960bn </em></p>

With the Nikkei 225 index breaking 30k this month, we thought it pertinent to look in more detail at Japan positioning among Global fund managers.  Our data shows that Japan is underowned by Global managers versus its own history and held underweight versus the benchmark MSCI All Country World index.  Current positioning levels are towards their lowest ever levels, yet we are not seeing a sweeping reversal of sentiment in our data just yet, merely a stalling of the declines. However, the outperformance of MSCI Japan versus the AC World index over the last 6-months and the psychological breaking of 30,000 in the Nikkei 225 index are both signs that momentum is gathering steam.   We see rising ownership levels in a number of key companies, led by Sony Corp (6758 JP) , Nintendo Co Ltd (7974 JP) and Tokyo Electron (8035 JP) and high conviction in Keyence Corp (6861 JP) among Global investors.  Outside of these 4 stocks, we would highlight the largest index weight, Toyota Motor (7203 JP) as a laggard and a stock that has the potential to play a much greater role in Global portfolios going forwards.Analysis taken from our Global active fund research, covering 386 managers with combined AUM of $960bn 

Global Fund Positioning in Japan:  Underweight and Underowned

'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.

Thematic (Sector/Industry)

<p style="text-align: center;"><strong>• RELATIVE PRICE SCORE OUTLIERS •</strong></p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/183/304/original/2021-01-18_07-21-17.png?1611015356" class="editor-image img-responsive" data-smartkarma-image-id="183304"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/183/305/original/2021-01-19_09-18-35.png?1611015525" class="editor-image img-responsive" data-smartkarma-image-id="183305"></figure><div class="content-caption">Source for all charts &amp; tables: Japan Analytics</div></section><p><strong>POLES APART</strong><strong>&amp; ECHOES OF 2000</strong>- As the Japanese equity market continues to rise the 'spread' between the percentage of listed companies that are OverSold (Relative Price Score &lt;-2.0) and those that are OverBought (RPS &gt; 4.0) remains at extreme levels as does the spread in terms of market weight. 7.2% of listed companies are Oversold; while 2.2% are OverBought, but the latter account for 13.7% of market value; the former just 5.4%. The last time both pairs of metrics were at these levels was the 2000 technology bubble.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/183/321/original/2021-01-19_10-25-51.png?1611019564" class="editor-image img-responsive" data-smartkarma-image-id="183321"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/183/323/original/2021-01-19_10-27-10.png?1611019660" class="editor-image img-responsive" data-smartkarma-image-id="183323"></figure></section><p><strong>BLOW OUT</strong> - As was the case in 2000, the total number of Sectors either OverBought or Oversold is also at an extreme level having peaked at 13 in December. This number has been exceeded only twice in the last fifty years  - in December 1999 (16) and February 2000 (14).   </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/183/363/original/2021-01-19_12-45-46.png?1611027961" class="editor-image img-responsive" data-smartkarma-image-id="183363"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/183/367/original/2021-01-19_13-09-06.png?1611029374" class="editor-image img-responsive" data-smartkarma-image-id="183367"></figure></section><div><p>In the<strong> DETAIL</strong> section below, we provide an update on  Sector, Peer Group and individual company Relative Price Score trends and outliers and make some stock-specific recommendations.</p></div><div><div><div class="content-highlight"><p><strong>THE JAPAN ANALYTICS RELATIVE PRICE SCORE</strong> -  The Relative Price Score (RPS) is a measure of price performance relative to TOPIX calculated by comparing the current deviation with the mean absolute deviation of monthly and daily relative share prices over the last 28 years and 24 months, respectively. As all companies on a comparable scale, 'Overbought' and 'Oversold' outliers and short-term changes in scoring can offer some trading opportunities. The data for all 3,919 currently-listed Companies is cap-weight-aggregated into Relative Price Scores for our 328 Peer Groups and 30 Sectors. The Overbought and Oversold outlier 'thresholds are set' at +4 &amp; -2 for Companies, +3 &amp; -1.5 for Peer Groups and +2 and -1 for Sectors, respectively. These thresholds equate with the top and bottom percentiles of over 3.2 million observations.</p></div></div></div>

• RELATIVE PRICE SCORE OUTLIERS •Source for all charts &amp; tables: Japan AnalyticsPOLES APART&amp; ECHOES OF 2000- As the Japanese equity market continues to rise the 'spread' between the percentage of listed companies that are OverSold (Relative Price Score &lt;-2.0) and those that are OverBought (RPS &gt; 4.0) remains at extreme levels as does the spread in terms of market weight. 7.2% of listed companies are Oversold; while 2.2% are OverBought, but the latter account for 13.7% of market value; the former just 5.4%. The last time both pairs of metrics were at these levels was the 2000 technology bubble.BLOW OUT - As was the case in 2000, the total number of Sectors either OverBought or Oversold is also at an extreme level having peaked at 13 in December. This number has been exceeded only twice in the last fifty years  - in December 1999 (16) and February 2000 (14).   In the DETAIL section below, we provide an update on  Sector, Peer Group and individual company Relative Price Score trends and outliers and make some stock-specific recommendations.THE JAPAN ANALYTICS RELATIVE PRICE SCORE -  The Relative Price Score (RPS) is a measure of price performance relative to TOPIX calculated by comparing the current deviation with the mean absolute deviation of monthly and daily relative share prices over the last 28 years and 24 months, respectively. As all companies on a comparable scale, 'Overbought' and 'Oversold' outliers and short-term changes in scoring can offer some trading opportunities. The data for all 3,919 currently-listed Companies is cap-weight-aggregated into Relative Price Scores for our 328 Peer Groups and 30 Sectors. The Overbought and Oversold outlier 'thresholds are set' at +4 &amp; -2 for Companies, +3 &amp; -1.5 for Peer Groups and +2 and -1 for Sectors, respectively. These thresholds equate with the top and bottom percentiles of over 3.2 million observations.

🇯🇵 JAPAN • January Relative Price Scores -  Actionable Mean Reversion Trades

<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/175/082/original/2020-11-30_05-30-46.png?1606681863" class="editor-image img-responsive" data-smartkarma-image-id="175082"></figure></section><div class="content-caption">Source for all charts &amp; tables: Japan Analytics </div><p><strong>FOUR QUADRANTS</strong> - By combining our two scoring methodologies - the Relative Price Score (RPS) and the Results &amp; Revision Score (RRS), we can assign companies into four quadrants:-</p><ul style="list-style-type: disc;">
<li>
<strong>CONTRARIAN BUYS </strong>- Companies with low Results &amp; Revision and Relative Price Scores</li>
<li>
<strong>CONTRARIAN SELLS</strong> - Companies with high Results &amp; Revision and Relative Price Scores</li>
<li>
<strong>TURNAROUNDS</strong> - Companies with high Results &amp; Revision Scores &amp; low Relative Price Scores</li>
<li>
<strong>EX-GROWTH</strong> - Companies with low Results &amp; Revision Scores &amp; high Relative Price Scores</li>
</ul><p>In the two Contrarian quadrants and especially for Contrarian Sells, companies can remain outliers for extended periods; however profitable Contrarian Sells in the last year have been <a href="https://www.smartkarma.com/entities/taiyo-nippon-sanso-corp" target="_blank" data-smartkarma-citation="entities:15756:1" rel="noopener">Nippon Sanso (4091 JP)</a> and <a href="https://www.smartkarma.com/entities/sekisui-house-ltd" target="_blank" data-smartkarma-citation="entities:4508:1" rel="noopener">Sekisui House (1928 JP)</a>. </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/174/185/original/2020-11-26_08-13-23.png?1606346017" class="editor-image img-responsive" data-smartkarma-image-id="174185"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/174/187/original/2020-11-26_08-18-21.png?1606346313" class="editor-image img-responsive" data-smartkarma-image-id="174187"></figure></section><p><strong><a href="https://www.dropbox.com/s/7b61jl02dh0pzno/2020-11-25_12-43-55.png?dl=0" target="_blank" rel="noopener">CONTRARIAN SELLS</a></strong>- In the<strong> DETAIL</strong> below, we shall review the current 'crop' of Contrarian Sells for potential opportunities. Subsequent Insights in this mini-series will look at the Turnarounds and Ex-Growth quadrants before concluding with one '2021 High Conviction' recommendation. The first Insight in the Series can be found here - <a href="https://www.smartkarma.com/insights/japan-four-quadrants-contrarian-buys" target="_blank" data-smartkarma-citation="insights:45688" rel="noopener">Contrarian Buys</a>.</p>

Source for all charts &amp; tables: Japan Analytics FOUR QUADRANTS - By combining our two scoring methodologies - the Relative Price Score (RPS) and the Results &amp; Revision Score (RRS), we can assign companies into four quadrants:-

CONTRARIAN BUYS - Companies with low Results &amp; Revision and Relative Price Scores

CONTRARIAN SELLS - Companies with high Results &amp; Revision and Relative Price Scores

TURNAROUNDS - Companies with high Results &amp; Revision Scores &amp; low Relative Price Scores

EX-GROWTH - Companies with low Results &amp; Revision Scores &amp; high Relative Price Scores
In the two Contrarian quadrants and especially for Contrarian Sells, companies can remain outliers for extended periods; however profitable Contrarian Sells in the last year have been Nippon Sanso (4091 JP) and Sekisui House (1928 JP). CONTRARIAN SELLS- In the DETAIL below, we shall review the current 'crop' of Contrarian Sells for potential opportunities. Subsequent Insights in this mini-series will look at the Turnarounds and Ex-Growth quadrants before concluding with one '2021 High Conviction' recommendation. The first Insight in the Series can be found here - Contrarian Buys.

🇯🇵 JAPAN • Four Quadrants - Contrarian Sells

Independent Asian Credit Research, Bondcritic

Warut Promboon

Independent Asian Credit Research

Asian Fixed Income/Frontier Market Research

Bondcritic

Bondcritic, established in 2009, is designed to be an independent credit research voice that helps investors gain insights and unbiased analyses on Asian fixed income market. Our mission is to discover deep-value Asian high-yield and distressed bonds with a bottom-up approach, together with the help of our proprietary ESG (Environmental, Social Development, and Governance) model. At the same time, we focus on bringing investment cases of unrated and unloved issuers to the general public.

<p style="text-align: justify;">In this Smartkarma Original, we seek to study how diversity and incentives influence stock performance and profitability. We tallied diversity and incentive data related to the board of directors, management, and employees across major economies in Asia and picked top 10 companies of each country in terms of market capitalization. We chose to exclude major companies listed in exchanges of other economies such as Tencent and Alibaba to limit our sample size.</p>
<p style="text-align: justify;">Then we devised diversity and incentive scores to assign to those companies and compare those scores against a 5-year trend of their return on shareholders’ equity (ROE) ratios and 1-year stock performance from 1-July-19 to 30-June-20 over its corresponding exchange indices.</p>
<p style="text-align: justify;">The report covers diversity vs. incentives in Asia, diversity score vs. 1-year stock performance and ROE trend, incentives vs. 1-year stock performance and ROE trend, diversity + incentives scores vs. 1-year stock performance and ROE trend, companies with top and bottom diversity + incentive scores, countries with top and bottom average diversity + incentive scores, and incentive score vs. staffing cost trend. </p>
<p style="text-align: justify;">The results show that companies with high diversity scores do perform well. A high diversity score also has a positive impact on the ROE trend, based on our regression analysis at 95% confidence level. We found that employee incentives are not significant as staff diversity but they can still have an influence on company performances at a lower 90% confidence level.</p>
<p style="text-align: justify;">We note that this study is at the preliminary stage and stock performance is a function of many factors, not only the diversity scores that we concluded. Needless to say, our diversity and incentive scores also reflect the level of disclosures by selected companies, not necessarily the actual practice within each company. Our diversity and incentive scores are also not a credit rating or ranking with peers and, hence, do not reflect default probability of selected companies.</p>
<p style="text-align: justify;">We caution that in Asia, many diversity trends in the West may not apply. The fact that many Asian business communities may remain less sensitive to equal opportunities for females, disabled persons, or LGBTQ communities could make returns of Asian companies less correlated to diversity than in the West. Likewise, additional incentives in some countries in Asia may not be necessary as employees’ strong performance (i.e. in Japan) is a norm, according to the prevalent work culture.</p>
<p style="text-align: justify;">Bondcritic is developing a scoring model, which includes environment, social development, and corporate governance; the last of which cover diversity and incentives. This report is the first of the series to uncover shenanigans in the Asian corporate sector.</p>

In this Smartkarma Original, we seek to study how diversity and incentives influence stock performance and profitability. We tallied diversity and incentive data related to the board of directors, management, and employees across major economies in Asia and picked top 10 companies of each country in terms of market capitalization. We chose to exclude major companies listed in exchanges of other economies such as Tencent and Alibaba to limit our sample size.
Then we devised diversity and incentive scores to assign to those companies and compare those scores against a 5-year trend of their return on shareholders’ equity (ROE) ratios and 1-year stock performance from 1-July-19 to 30-June-20 over its corresponding exchange indices.
The report covers diversity vs. incentives in Asia, diversity score vs. 1-year stock performance and ROE trend, incentives vs. 1-year stock performance and ROE trend, diversity + incentives scores vs. 1-year stock performance and ROE trend, companies with top and bottom diversity + incentive scores, countries with top and bottom average diversity + incentive scores, and incentive score vs. staffing cost trend. 
The results show that companies with high diversity scores do perform well. A high diversity score also has a positive impact on the ROE trend, based on our regression analysis at 95% confidence level. We found that employee incentives are not significant as staff diversity but they can still have an influence on company performances at a lower 90% confidence level.
We note that this study is at the preliminary stage and stock performance is a function of many factors, not only the diversity scores that we concluded. Needless to say, our diversity and incentive scores also reflect the level of disclosures by selected companies, not necessarily the actual practice within each company. Our diversity and incentive scores are also not a credit rating or ranking with peers and, hence, do not reflect default probability of selected companies.
We caution that in Asia, many diversity trends in the West may not apply. The fact that many Asian business communities may remain less sensitive to equal opportunities for females, disabled persons, or LGBTQ communities could make returns of Asian companies less correlated to diversity than in the West. Likewise, additional incentives in some countries in Asia may not be necessary as employees’ strong performance (i.e. in Japan) is a norm, according to the prevalent work culture.
Bondcritic is developing a scoring model, which includes environment, social development, and corporate governance; the last of which cover diversity and incentives. This report is the first of the series to uncover shenanigans in the Asian corporate sector.

Asian Governance: Diversity & Incentives Through the Cultural Lens

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/133/748/original/2020-05-16_08-18-15.png?1589584720" class="editor-image img-responsive" data-smartkarma-image-id="133748"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>"WORSENING"</strong> - The Cabinet Office updated their Business Condition Leading Indicator for March this week, confirming the trend already apparent from our Results &amp; Revision Score data series. The correlation between the series is 0.80, with the only significant deviation occurring in 2016, Coincident conditions are assessed as "worsening" wording that is unchanged since August 2019. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/133/788/original/2020-05-16_12-10-50.png?1589598664" class="editor-image img-responsive" data-smartkarma-image-id="133788"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>DECOMPOSED</strong> - Our Score is decomposed into a Results Score, an Annual Forecast/Revision Score and an Interim Forecast Revision Score.  The last two are ten-year lows; the first should join them next week. A notable limiting factor is the shortage of forecasts being made. Without this reticence, both forecast Scores would be considerably lower.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/133/795/original/2020-05-16_12-47-02.png?1589600841" class="editor-image img-responsive" data-smartkarma-image-id="133795"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>RETICENCE</strong> - 77% by number and 81% by value of companies with year-ends in  March, June, September, or December have already reported. Of these 2,464 companies representing ¥438 trillion of market cap, just 1,119 have issued annual forecasts for the current year, and 583 have made interim forecasts. Of all listed companies, one-third by market value are currently unable to see ahead twelve months and only 16% by value and 23% by number are prepared to look forward four-and-a-half months. This unusual degree of reticence leaves the sell-side without their regular anchoring comfort blanket.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/133/802/original/2020-05-16_13-27-57.png?1589605282" class="editor-image img-responsive" data-smartkarma-image-id="133802"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>NOT CHEAP</strong> -  Even allowing for the lack of a full complement of forecasts, the market's forward multiple is at a five-year high with Net Income expected to reach levels first seen in 2015, 37% below the December 2018 peak. The ten-year peak trailing multiple was 29 on aggregate Net Income of  ¥14.6 trillion, which was ten times the 2009 trough.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/133/801/original/2020-05-16_14-00-16.png?1589605245" class="editor-image img-responsive" data-smartkarma-image-id="133801"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>FIDDLING ABOUT</strong> - The Bank of Japan has reduced the amount of its daily ETF program for a second time; however, intervened for the last three days of last week seemingly intent on keeping the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> above 20,000. The cumulative total of BoJ purchases represents over 5% of the Total Market Value.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/133/884/original/2020-05-17_12-54-22.png?1589687679" class="editor-image img-responsive" data-smartkarma-image-id="133884"></figure><div class="content-caption">Source • Japan Analytics</div><p>In the <strong>DETAIL</strong> below, we review some market data trends, look at the Results &amp; Revision Score trends by Sector (a 15-year timeline is shown above), apply some KPMG 'recovery analysis' to Japan and look at Friday's results and revisions.</p><div><ul>
<li>The balance between positive/neutral/negative of the <strong>490</strong> results announcements was <strong>206:45:239</strong>. The average change in Results Score was <strong>-0.2</strong>.</li>
<li>For the <strong>205</strong> revisions/initial forecasts, the split was <strong>49:10:146</strong>, and the average Revision Score was <strong>-7.5</strong>. Of the <strong>364</strong> companies declaring full-year results, <strong>47%</strong> made forecasts for the current year.</li>
<li>Fifty-one will announce today, the largest of which by market capitalisation will be <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a>, <a href="https://www.smartkarma.com/entities/terumo-corp" target="_blank" data-smartkarma-citation="entities:6708:1" rel="noopener">Terumo Corp (4543 JP)</a>, and <a href="https://www.smartkarma.com/entities/komatsu-ltd" target="_blank" data-smartkarma-citation="entities:8416:1" rel="noopener">Komatsu (6301 JP).</a>
</li>
</ul></div>

Source • Japan Analytics"WORSENING" - The Cabinet Office updated their Business Condition Leading Indicator for March this week, confirming the trend already apparent from our Results &amp; Revision Score data series. The correlation between the series is 0.80, with the only significant deviation occurring in 2016, Coincident conditions are assessed as "worsening" wording that is unchanged since August 2019. Source • Japan AnalyticsDECOMPOSED - Our Score is decomposed into a Results Score, an Annual Forecast/Revision Score and an Interim Forecast Revision Score.  The last two are ten-year lows; the first should join them next week. A notable limiting factor is the shortage of forecasts being made. Without this reticence, both forecast Scores would be considerably lower.Source • Japan AnalyticsRETICENCE - 77% by number and 81% by value of companies with year-ends in  March, June, September, or December have already reported. Of these 2,464 companies representing ¥438 trillion of market cap, just 1,119 have issued annual forecasts for the current year, and 583 have made interim forecasts. Of all listed companies, one-third by market value are currently unable to see ahead twelve months and only 16% by value and 23% by number are prepared to look forward four-and-a-half months. This unusual degree of reticence leaves the sell-side without their regular anchoring comfort blanket.Source • Japan AnalyticsNOT CHEAP -  Even allowing for the lack of a full complement of forecasts, the market's forward multiple is at a five-year high with Net Income expected to reach levels first seen in 2015, 37% below the December 2018 peak. The ten-year peak trailing multiple was 29 on aggregate Net Income of  ¥14.6 trillion, which was ten times the 2009 trough.Source • Japan AnalyticsFIDDLING ABOUT - The Bank of Japan has reduced the amount of its daily ETF program for a second time; however, intervened for the last three days of last week seemingly intent on keeping the Nikkei 225 (NKY INDEX) above 20,000. The cumulative total of BoJ purchases represents over 5% of the Total Market Value.Source • Japan AnalyticsIn the DETAIL below, we review some market data trends, look at the Results &amp; Revision Score trends by Sector (a 15-year timeline is shown above), apply some KPMG 'recovery analysis' to Japan and look at Friday's results and revisions.
The balance between positive/neutral/negative of the 490 results announcements was 206:45:239. The average change in Results Score was -0.2.
For the 205 revisions/initial forecasts, the split was 49:10:146, and the average Revision Score was -7.5. Of the 364 companies declaring full-year results, 47% made forecasts for the current year.
Fifty-one will announce today, the largest of which by market capitalisation will be Softbank Group (9984 JP), Terumo Corp (4543 JP), and Komatsu (6301 JP).



🇯🇵 JAPAN MARKET UPDATE 18th May - "Worsening"

Japan

KEYENCE CORPORATION develops, manufactures, and sells sensors and measuring instruments used for factory automation (FA) and high technology hobby products. The Company's products include fiber optic sensors, photoelectric sensors, programmable logic controllers (PLC), laser scan micrometers, bar code readers, and radio-controlled model cars.

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Keyence Corp (6861 JP)

Global Fund Positioning in Japan: Underweight and Underowned

With the Nikkei 225 index breaking 30k this month, Global managers remain under-invested and underweight Japan versus the benchmark MSCI All...

Steven Holden

🇯🇵 JAPAN • January Relative Price Scores - Actionable Mean Reversion Trades

As the Japanese equity market continues to rise the 'spread' between the percentage of listed companies that are OverSold and those that are...

Campbell Gunn

🇯🇵 JAPAN • Four Quadrants - Contrarian Sells

CONTRARIAN SELLS - In the DETAIL below, we shall review the current 'crop' of Contrarian Sells for potential opportunities.

Campbell Gunn

Asian Governance: Diversity & Incentives Through the Cultural Lens

In this Smartkarma Original, we seek to study how diversity and incentives influence stock performance and profitability. We tallied diversity and...

Bondcritic

🇯🇵 JAPAN MARKET UPDATE 18th May - "Worsening"

"WORSENING" - The Cabinet Office updated their Business Condition Leading Indicator for March this week, confirming the trend already apparent from...

Campbell Gunn

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