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

Index Rebalance

Sprott Physical Uranium Trust / Index Rebalance

<ul>
<li>Solactive has announced the constituent changes for the Global Uranium &amp; Nuclear Components Index with implementation at the close on 31 July.</li>
<li>
<a href="https://www.smartkarma.com/entities/oklo-inc" target="_blank" data-smartkarma-citation="entities:38840" rel="noopener">Oklo (OKLO US)</a> and <a href="https://www.smartkarma.com/entities/western-uranium-vanadium-corp" target="_blank" data-smartkarma-citation="entities:43774" rel="noopener">Western Uranium &amp; Vanadium (WUC CN)</a> will be added to the index. Estimated one-way turnover is 7.9% resulting in a round-trip trade of US$486m.</li>
<li>There are only 4 trading days to implementation of the changes and we'd watch out for big moves on stocks that have more than 2x ADV to trade.</li>
</ul>


Solactive has announced the constituent changes for the Global Uranium &amp; Nuclear Components Index with implementation at the close on 31 July.

Oklo (OKLO US) and Western Uranium &amp; Vanadium (WUC CN) will be added to the index. Estimated one-way turnover is 7.9% resulting in a round-trip trade of US$486m.
There are only 4 trading days to implementation of the changes and we'd watch out for big moves on stocks that have more than 2x ADV to trade.


Solactive Global Uranium & Nuclear Components Index Rebalance: Two Adds & US$500m Trade

Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Senior Technology Analyst, Japanese Equities

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.

Equity Bottom-Up

Mitsubishi Heavy Industries / Equity Bottom-Up

<ul>
<li>MHI was sold off last week as FY Mar-24 operating profit fell short of guidance and management guided for a decline in new orders this fiscal year.</li>
<li>Orders momentum has peaked. Sales and profits will follow. But the latter are still rising and guidance could once again be conservative.</li>
<li>Consolidation of the share price is likely to continue until orders and profit trends are confirmed.</li>
</ul>


MHI was sold off last week as FY Mar-24 operating profit fell short of guidance and management guided for a decline in new orders this fiscal year.
Orders momentum has peaked. Sales and profits will follow. But the latter are still rising and guidance could once again be conservative.
Consolidation of the share price is likely to continue until orders and profit trends are confirmed.


Mitsubishi Heavy Industries (7011 JP): Orders Momentum Has Peaked

Japan Specialist

Mark Chadwick

<ul>
<li>MHI's stock fell 7% following the announcement of results. Guidance for FY3/25 missed analyst expectations</li>
<li>Even so, MHI remains a key beneficiary of the global shift to clean energy and national policies aimed at bolstering national security </li>
<li>We remain bullish. The stock has performed well this year and but 13x EV/EBIT seems reasonable given the structural drivers</li>
</ul>


MHI's stock fell 7% following the announcement of results. Guidance for FY3/25 missed analyst expectations
Even so, MHI remains a key beneficiary of the global shift to clean energy and national policies aimed at bolstering national security 
We remain bullish. The stock has performed well this year and but 13x EV/EBIT seems reasonable given the structural drivers


<ul>
<li>MHI's share price has risen more than 60% year-to-date and nearly tripled over the past 12 months on the improving outlook for Japanese defense contractors.</li>
<li>A huge increase in new orders, prospects for a doubling of sales and a rapidly rising operating margin on Aircraft, Defense &amp; Space have been factored into the price.</li>
<li>The shares do not look expensive compared with international comparables, but neither are they particularly cheap. Potential problems, from Japanese defense budget constraints to production glitches, have been ignored. </li>
</ul>


MHI's share price has risen more than 60% year-to-date and nearly tripled over the past 12 months on the improving outlook for Japanese defense contractors.
A huge increase in new orders, prospects for a doubling of sales and a rapidly rising operating margin on Aircraft, Defense &amp; Space have been factored into the price.
The shares do not look expensive compared with international comparables, but neither are they particularly cheap. Potential problems, from Japanese defense budget constraints to production glitches, have been ignored. 


Mitsubishi Heavy Industries (7011 JP): Take Profits and Wait for Reality to Catch Up

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>Global equites (MSCI ACWI) have pulled back some following the FOMC's hawkish-leaning announcement. Short-term support is at $102 on ACWI-US--last week's breakout level-- while longer-term support remains at $98-$99.</li>
<li>A break below $102 would indicate more consolidation is likely but, if ACWI-US remains above $98, we remain bullish on global equities, and we view pullbacks as buying opportunities.</li>
<li>Europe remains bullish, and we remain overweight Japan and India. Actionable Themes: many stocks highlighted within Consumer Discretionary, Energy, Industrials, Services, and Technology</li>
</ul>


Global equites (MSCI ACWI) have pulled back some following the FOMC's hawkish-leaning announcement. Short-term support is at $102 on ACWI-US--last week's breakout level-- while longer-term support remains at $98-$99.
A break below $102 would indicate more consolidation is likely but, if ACWI-US remains above $98, we remain bullish on global equities, and we view pullbacks as buying opportunities.
Europe remains bullish, and we remain overweight Japan and India. Actionable Themes: many stocks highlighted within Consumer Discretionary, Energy, Industrials, Services, and Technology


MSCI ACWI, EURO STOXX 50, TOPIX Remain Bullish; Buys in Cons Disc, Industrials, Services, Technology

Japan

Mitsubishi Heavy Industries, Ltd. is a comprehensive heavy machinery maker. The Company manufactures machinery, ships, turbines and engines, prime movers, aircrafts, and machine parts for military and commercial use.  Mitsubishi Heavy Industries also researches and develops nuclear power plants.

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Mitsubishi Heavy Industries (7011 JP)

Solactive Global Uranium & Nuclear Components Index Rebalance: Two Adds & US$500m Trade

The changes for the Global Uranium & Nuclear Components Index will be implemented at the close tomorrow. There is a fair bit to trade on some...

Brian Freitas