Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Cross Asset Strategy

<ul>
<li>Act 1 of the US bear market is likely complete, with diverging price signals from stocks, bonds and the dollar.</li>
<li>This will be a rebound bounce to sell into, as we are not going back to previous highs.</li>
<li>Looking at companies servicing high-income consumers is a good hunting ground for shorts.</li>
</ul>


Act 1 of the US bear market is likely complete, with diverging price signals from stocks, bonds and the dollar.
This will be a rebound bounce to sell into, as we are not going back to previous highs.
Looking at companies servicing high-income consumers is a good hunting ground for shorts.


Investors Have that “Oh Sh#t Moment” - Part 2:  Trading Opportunities.

Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

<ul>
<li>
Market Reaction: The announcement of US reciprocal tariffs led to significantly lower market open throughout Asia-Pacific. In the US, <a href="https://www.smartkarma.com/entities/s-p-500-index" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500</a> futures dropped -3.5%, with the VIX spiking to 23.45.</li>
<li>
Impact on Japan: Japan faces a 24% tariff, with specific sectors like automobiles hit with 25%. This led to a 4.5% drop in the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225</a>, stabilizing at 34,600 (-3.2%).</li>
<li>
Volatility Increase: The Nikkei 225 VIX index jumped from previous levels in the low 20's to rise above 38 before retreating to 32.8, indicating the 99th percentile of implied volatility.</li>
</ul>



Market Reaction: The announcement of US reciprocal tariffs led to significantly lower market open throughout Asia-Pacific. In the US, S&amp;P 500 futures dropped -3.5%, with the VIX spiking to 23.45.

Impact on Japan: Japan faces a 24% tariff, with specific sectors like automobiles hit with 25%. This led to a 4.5% drop in the Nikkei 225, stabilizing at 34,600 (-3.2%).

Volatility Increase: The Nikkei 225 VIX index jumped from previous levels in the low 20's to rise above 38 before retreating to 32.8, indicating the 99th percentile of implied volatility.


Nikkei 225 (NKY INDEX) Drops Amid US Tariffs: Implied Volatility Hits Extreme Levels

Thematic (Sector/Industry)

<ul>
<li>Revisiting a sector we have liked for the last 2 years</li>
<li>We discuss current sector dynamics and why they could be  a potential short</li>
<li>Recent positive earning surprises from the banks have not moved the stocks</li>
</ul>


Revisiting a sector we have liked for the last 2 years
We discuss current sector dynamics and why they could be  a potential short
Recent positive earning surprises from the banks have not moved the stocks


Japanese Megabanks – Time to Get Short?

<ul>
<li>Asymmetric return opportunity in a short position in Japan - downside vs upside potential is skewed to the downside.</li>
<li>The weak JPY hasn’t helped the overall market and rising risk of a reversal similar to August 2024</li>
<li>We look at some sectors and stocks that are good short candidates</li>
</ul>


Asymmetric return opportunity in a short position in Japan - downside vs upside potential is skewed to the downside.
The weak JPY hasn’t helped the overall market and rising risk of a reversal similar to August 2024
We look at some sectors and stocks that are good short candidates


Tactical Trading - Time to Sell Japan. Again.

Japan Specialist

Mark Chadwick

<ul>
<li>The Japanese stock market posted solid gains over the past week, with the Topix rising 3.3% and the Nikkei advancing 1.7%</li>
<li>The Bank of Japan maintained its key short-term interest rate at  0.5% in March, given a cautious view over the global macro outlook</li>
<li>
 MHI shares rose 16% this week, driven by optimism over Japan’s nuclear energy expansion plans and rising defense commitments.</li>
</ul>


The Japanese stock market posted solid gains over the past week, with the Topix rising 3.3% and the Nikkei advancing 1.7%
The Bank of Japan maintained its key short-term interest rate at  0.5% in March, given a cautious view over the global macro outlook

 MHI shares rose 16% this week, driven by optimism over Japan’s nuclear energy expansion plans and rising defense commitments.


Japan Strategy Weekly | Banks & Traders Rally

Japan

Mitsubishi UFJ Financial Group, Inc. (MUFG) is a holding company established through the merger of Mitsubishi Tokyo Financial Group and UFJ Holdings. As a financial group, the Company provides a variety of financial and investment services including commercial banking, trust banking, international finance, and assets management services.

Mitsubishi UFJ Financial (MUFG) ADR (MUFG US)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Mitsubishi UFJ Financial (MUFG) ADR (MUFG US)

Investors Have that “Oh Sh#t Moment” - Part 2: Trading Opportunities.

US bear market Act 1 likely over, rebound is a selling opportunity as previous highs won't be reached. High-income consumer companies are good...

Rikki Malik

Nikkei 225 (NKY INDEX) Drops Amid US Tariffs: Implied Volatility Hits Extreme Levels

US reciprocal tariffs announcement led to lower market open in Asia-Pacific, with Japan facing a 24% tariff causing a drop in Nikkei 225 and a...

Gaudenz Schneider

Japanese Megabanks – Time to Get Short?

From a short-term trading perspective, we would look to cover half our shorts in the sector today as the stocks approach the 200-day Moving...

Rikki Malik

Tactical Trading - Time to Sell Japan. Again.

It's the perfect storm for the Japanese market. Tariffs, JPY, rising rates and inflation, with growth weakening. The 2,800 level on Topix has been...

Rikki Malik

Japan Strategy Weekly | Banks & Traders Rally

Japanese stock market sees solid gains, Bank of Japan holds interest rate, MHI shares surge on nuclear energy and defense optimism.

Mark Chadwick

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Investors Have that “Oh Sh#t Moment” - Part 2: Trading Opportunities.

​US bear market Act 1 likely over, rebound is a selling opportunity as previous highs won't be reached. High-income consumer companies are good...

Rikki Malik

Nikkei 225 (NKY INDEX) Drops Amid US Tariffs: Implied Volatility Hits Extreme Levels

​US reciprocal tariffs announcement led to lower market open in Asia-Pacific, with Japan facing a 24% tariff causing a drop in Nikkei 225 and a...

Gaudenz Schneider

Japanese Megabanks – Time to Get Short?

From a short-term trading perspective, we would look to cover half our shorts in the sector today as the stocks approach the 200-day Moving...

Rikki Malik

Tactical Trading - Time to Sell Japan. Again.

It's the perfect storm for the Japanese market. Tariffs, JPY, rising rates and inflation, with growth weakening. The 2,800 level on Topix has been...

Rikki Malik

Japan Strategy Weekly | Banks & Traders Rally

​Japanese stock market sees solid gains, Bank of Japan holds interest rate, MHI shares surge on nuclear energy and defense optimism.

Mark Chadwick

US bear market Act 1 likely over, rebound is a selling opportunity as previous highs won't be reached. High-income consumer companies are good...

US reciprocal tariffs announcement led to lower market open in Asia-Pacific, with Japan facing a 24% tariff causing a drop in Nikkei 225 and a...

Japanese stock market sees solid gains, Bank of Japan holds interest rate, MHI shares surge on nuclear energy and defense optimism.