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

<ul>
<li>The MSCI EM vs.EAFE ratio (local currency) shows EM has outperformed relative to EAFE since the DXY peaked in November 2022, and also shows signs of reversing the 2-year downtrend.</li>
<li>As long as the DXY remains below $103.50-$106, we expect outperformance from EM to continue.</li>
<li>China/Hong Kong, Greece, South Africa, and Mexico stand out as attractive countries. Our top actionable Sectors include Communications, Consumer Discretionary, and Technology. We highlight 76 attractive EM stocks.</li>
</ul>


The MSCI EM vs.EAFE ratio (local currency) shows EM has outperformed relative to EAFE since the DXY peaked in November 2022, and also shows signs of reversing the 2-year downtrend.
As long as the DXY remains below $103.50-$106, we expect outperformance from EM to continue.
China/Hong Kong, Greece, South Africa, and Mexico stand out as attractive countries. Our top actionable Sectors include Communications, Consumer Discretionary, and Technology. We highlight 76 attractive EM stocks.


EM Outperformance to Continue (Vs. EAFE) -- Add on a Pullback; DXY Needs to Hold Below $106

Insurance & Central Asia-focused Analyst, KT Capital Group

Alec Tseung

Insurance & Central Asia-focused Analyst

Thematic (Sector/Industry)

<p>This Original aims to identify the key investment opportunities among the listed brokers in the three major East Asian countries - China, Japan, and Korea. </p><p>By looking at the development of the brokerage sectors in these three countries, we observe a general trend where upstart online brokers first compete against the more established brokers based on their cost and technological advantages. This then pushes the more established brokers to either focus on more lucrative wholesale businesses or adopt and invest in tech initiatives in order to stay competitive in the retail market.</p><p>After further establishing themselves in the retail market, these upstart online brokers then also diversify and expand into the more lucrative wealth/asset management or even wholesale businesses.  By gauging at which phase the broker is in this cycle, investors can have a good understanding of its future outlook.</p><p>In our opinion, Korean brokers currently offer the best value, while the Chinese pure-play online brokers offer the highest growth potential. As such, our pecking order, in terms of investment attractiveness, is <a href="https://www.smartkarma.com/entities/kiwoom-securities-co-ltd" target="_blank" data-smartkarma-citation="entities:20418:1" rel="noopener">Kiwoom Securities (039490 KS)</a>, <a href="https://www.smartkarma.com/entities/east-money-information-co-a" target="_blank" data-smartkarma-citation="entities:8075:1" rel="noopener">East Money Information Co A (300059 CH)</a>, <a href="https://www.smartkarma.com/entities/futu-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27858:1" rel="noopener">Futu Holdings Ltd (FUTU US)</a>, <a href="https://www.smartkarma.com/entities/monex-group-inc" target="_blank" data-smartkarma-citation="entities:14211:1" rel="noopener">Monex Group Inc (8698 JP)</a> / <a href="https://www.smartkarma.com/entities/huatai-securities-co-ltd-h" target="_blank" data-smartkarma-citation="entities:449:1" rel="noopener">Huatai Securities Co Ltd (H) (6886 HK)</a>.  </p><h2>What is Original?</h2><p>In this Original, we look into the competitive landscape of the brokerage sectors in China, Japan, and Korea. 55 listed brokers from these three countries are included in this Original as the company universe for regression analysis. </p><p>Among them, a total of 8 brokers are chosen, with their company profiles separately presented, to further showcase and contrast the impact of competition and technological disruption. Based on this, a pecking order is then developed, both on a country and a company basis.</p>

This Original aims to identify the key investment opportunities among the listed brokers in the three major East Asian countries - China, Japan, and Korea. By looking at the development of the brokerage sectors in these three countries, we observe a general trend where upstart online brokers first compete against the more established brokers based on their cost and technological advantages. This then pushes the more established brokers to either focus on more lucrative wholesale businesses or adopt and invest in tech initiatives in order to stay competitive in the retail market.After further establishing themselves in the retail market, these upstart online brokers then also diversify and expand into the more lucrative wealth/asset management or even wholesale businesses.  By gauging at which phase the broker is in this cycle, investors can have a good understanding of its future outlook.In our opinion, Korean brokers currently offer the best value, while the Chinese pure-play online brokers offer the highest growth potential. As such, our pecking order, in terms of investment attractiveness, is Kiwoom Securities (039490 KS), East Money Information Co A (300059 CH), Futu Holdings Ltd (FUTU US), Monex Group Inc (8698 JP) / Huatai Securities Co Ltd (H) (6886 HK).  What is Original?In this Original, we look into the competitive landscape of the brokerage sectors in China, Japan, and Korea. 55 listed brokers from these three countries are included in this Original as the company universe for regression analysis. Among them, a total of 8 brokers are chosen, with their company profiles separately presented, to further showcase and contrast the impact of competition and technological disruption. Based on this, a pecking order is then developed, both on a country and a company basis.

Asian Brokers: A Competition Between Value and Growth

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Cross Asset Strategy

<p>KRX announced the rebalance to the KOSPI200 index today. There was not much surprise among the new 10 additions, which included stocks such as Samyang Foods, Zinus, and Kiwoom Securities. However, there was some surprises among the deletions including Unid, <a href="https://www.smartkarma.com/entities/dong-a-socio-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:4271:1" rel="noopener">Dong A Socio Holdings (000640 KS), </a>and <a href="https://www.smartkarma.com/entities/dong-a-st-co-ltd" target="_blank" data-smartkarma-citation="entities:16873:1" rel="noopener">Dong A St (170900 KS)</a>.</p><p>Among the newly included companies, in terms of their fundamental business outlook and reasonable valuations, we think Samyang Foods, Zinus, and Hanwha Systems fit into these categories. We would be cautious on Big Hit Entertainment, CS Wind, and Shinpoong Pharm as we think there could be some sellers on investors that trade on the "sell on news" strategy of being included in KOSPI 200.  </p>

KRX announced the rebalance to the KOSPI200 index today. There was not much surprise among the new 10 additions, which included stocks such as Samyang Foods, Zinus, and Kiwoom Securities. However, there was some surprises among the deletions including Unid, Dong A Socio Holdings (000640 KS), and Dong A St (170900 KS).Among the newly included companies, in terms of their fundamental business outlook and reasonable valuations, we think Samyang Foods, Zinus, and Hanwha Systems fit into these categories. We would be cautious on Big Hit Entertainment, CS Wind, and Shinpoong Pharm as we think there could be some sellers on investors that trade on the "sell on news" strategy of being included in KOSPI 200.  

KOSPI 200 Index Rebalances: No Surprises Among Additions, A Few Surprises Among Deletions

<p>The Korea Exchange introduced a new, strange-sounding index called <strong>"KOSPI Ex-KOSPI 200"</strong> on April 27th. In the past one month, this KOSPI Ex-KOSPI 200 index is up 8.51%, far <strong>outperforming</strong> KOSPI 200 index which is up 4.1%. in the same period. Over the past three months, KOSPI Ex-KOSPI 200 index is up 1.0%, again<strong> outperforming</strong> KOSPI 200 which is down 12.5% in the same period. Over a longer period (past one year), KOSPI Ex-KOSPI 200 index is down 10.9%,<strong> underperforming</strong> KOSPI 200 which is down 2.4% in the same period. </p><p>So far, the new KOSPI Ex-KOSPI 200 index's performance has been excellent since its launch on April 27th, 2020. This index has clearly benefited from the strong market rebound from the crushing market decline in February to the third week of March. </p><p>The rebalancing for KOSPI Ex-KOSPI 200 index is conducted twice a year (June and December at the same regular rebalancing day of KOSPI 200, the last trading day of the June and December delivery month for KOSPI 200 futures contracts).</p>

The Korea Exchange introduced a new, strange-sounding index called "KOSPI Ex-KOSPI 200" on April 27th. In the past one month, this KOSPI Ex-KOSPI 200 index is up 8.51%, far outperforming KOSPI 200 index which is up 4.1%. in the same period. Over the past three months, KOSPI Ex-KOSPI 200 index is up 1.0%, again outperforming KOSPI 200 which is down 12.5% in the same period. Over a longer period (past one year), KOSPI Ex-KOSPI 200 index is down 10.9%, underperforming KOSPI 200 which is down 2.4% in the same period. So far, the new KOSPI Ex-KOSPI 200 index's performance has been excellent since its launch on April 27th, 2020. This index has clearly benefited from the strong market rebound from the crushing market decline in February to the third week of March. The rebalancing for KOSPI Ex-KOSPI 200 index is conducted twice a year (June and December at the same regular rebalancing day of KOSPI 200, the last trading day of the June and December delivery month for KOSPI 200 futures contracts).

The New "KOSPI Ex-KOSPI 200 Index" Outperforming KOSPI 200 Index In the Past Month

<p>This is a follow-up to <a href="https://www.smartkarma.com/profiles/brian-freitas" target="_blank" data-smartkarma-citation="accounts:4091" rel="noopener">Brian Freitas</a>' insight <a href="https://www.smartkarma.com/insights/kospi200-rebalance-preview-the-early-bird-gets-the-worm" target="_blank" data-smartkarma-citation="insights:36427" rel="noopener">KOSPI200 Rebalance Preview - The Early Bird Gets the Worm</a>. In our analysis, we highlight 10 potential companies that could be included and 10 potential companies that could be excluded in the next round of KOSPI 200 rebalance in June. The tables below lists the 20 companies we believe could be excluded or included in the next round of KOSPI 200 rebalance in June. </p><table class="table table-striped">
<colgroup><col></colgroup>
<tbody>
<tr><td style="width: 519.2px;"><strong>10 Companies for KOSPI 200 Exclusion (Table 1)</strong></td></tr>
<tr><td style="text-align: left; width: 519.2px;">HYOSUNG HEAVY</td></tr>
<tr><td style="text-align: left; width: 519.2px;">SsangyongMtr</td></tr>
<tr><td style="text-align: left; width: 519.2px;">NamyangDairy</td></tr>
<tr><td style="text-align: left; width: 519.2px;">KISWire</td></tr>
<tr><td style="text-align: left; width: 519.2px;">HYUNDAILIVART</td></tr>
<tr><td style="width: 519.2px;">UNID</td></tr>
<tr><td style="width: 519.2px;">HankookShellOil</td></tr>
<tr><td style="width: 519.2px;">NamhaeChem</td></tr>
<tr><td style="width: 519.2px;">TONGYANG</td></tr>
<tr><td style="width: 519.2px;">AK Holdings</td></tr>
<tr><td style="width: 519.2px;">Source: Our Estimates</td></tr>
</tbody>
</table><div style="text-align: start;"><table class="table table-striped">
<colgroup><col></colgroup>
<tbody>
<tr><td style="width: 519.2px;"><strong>10 Companies for KOSPI 200 Inclusion (Table 5)</strong></td></tr>
<tr><td style="text-align: left; width: 519.2px;">Hanjin Kal Corp</td></tr>
<tr><td style="text-align: left; width: 519.2px;">POSCO Chemtech</td></tr>
<tr><td style="text-align: left; width: 519.2px;">Duzon Bizon</td></tr>
<tr><td style="text-align: left; width: 519.2px;">F&amp;F</td></tr>
<tr><td style="text-align: left; width: 519.2px;">NHN</td></tr>
<tr><td style="text-align: left; width: 519.2px;">Zinus</td></tr>
<tr><td style="text-align: left; width: 519.2px;">Kiwoom Securities</td></tr>
<tr><td style="width: 519.2px;">Hansol Chemical</td></tr>
<tr><td style="width: 519.2px;">Asiana Airlines</td></tr>
<tr><td style="width: 519.2px;">Hyundai Merchant Marine</td></tr>
<tr><td style="width: 519.2px;">Source: Our Estimates</td></tr>
</tbody>
</table></div>

This is a follow-up to Brian Freitas' insight KOSPI200 Rebalance Preview - The Early Bird Gets the Worm. In our analysis, we highlight 10 potential companies that could be included and 10 potential companies that could be excluded in the next round of KOSPI 200 rebalance in June. The tables below lists the 20 companies we believe could be excluded or included in the next round of KOSPI 200 rebalance in June. 


10 Companies for KOSPI 200 Exclusion (Table 1)
HYOSUNG HEAVY
SsangyongMtr
NamyangDairy
KISWire
HYUNDAILIVART
UNID
HankookShellOil
NamhaeChem
TONGYANG
AK Holdings
Source: Our Estimates




10 Companies for KOSPI 200 Inclusion (Table 5)
Hanjin Kal Corp
POSCO Chemtech
Duzon Bizon
F&amp;F
NHN
Zinus
Kiwoom Securities
Hansol Chemical
Asiana Airlines
Hyundai Merchant Marine
Source: Our Estimates



KOSPI200 Rebalance - What's In Store for Bottom 10%?

South Korea

KIWOOM Securities Co., Ltd. is an online financial institution.  The Company offers equity and fixed income securities brokerage, dealing, and underwriting services.  Kiwoom Securities provides its services to individual investors.

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Kiwoom Securities (039490 KS)

EM Outperformance to Continue (Vs. EAFE) -- Add on a Pullback; DXY Needs to Hold Below $106

EM vs. EAFE ratio (local currency) shows EM has outperformed relative to EAFE since the $DXY peaked in November 2022. If the DXY remains below...

Vermilion Research

Asian Brokers: A Competition Between Value and Growth

The Original looks into the current competitive landscape of the brokerage sectors in China, Japan, and Korea, with a view to developing a list of...

Alec Tseung

KOSPI 200 Index Rebalances: No Surprises Among Additions, A Few Surprises Among Deletions

KRX anounced its KOSPI200 index rebalance. There were no surprises among the new additions but a few surprises among the deletions.

Douglas Kim

The New "KOSPI Ex-KOSPI 200 Index" Outperforming KOSPI 200 Index In the Past Month

The Korea Exchange introduced a new, strange-sounding index called "KOSPI Ex-KOSPI 200" on April 27th. In the past one month, this KOSPI Ex-KOSPI...

Douglas Kim

KOSPI200 Rebalance - What's In Store for Bottom 10%?

This is a follow-up to Brian Freitas' insight KOSPI200 Rebalance Preview - The Early Bird Gets the Worm. In our analysis, we highlight 10 potential...

Douglas Kim

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52-week Range

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P/E

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