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

Rikki Malik

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.

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

<ul>
<li>Of the nearly 200 financials in Japan, on average shares outstanding are up 3% over the past several years </li>
<li>Japan Post Insurance, Japan Post Holdings, and Yamaguchi Financial are at the extreme opposite end with shares outstanding at -22%</li>
<li>MS&amp;AD features well ranking #11 of financials in our sample, with shares outstanding at -7%, adding well to its commitment on dividends, cross-shareholdings sales</li>
</ul>


Of the nearly 200 financials in Japan, on average shares outstanding are up 3% over the past several years 
Japan Post Insurance, Japan Post Holdings, and Yamaguchi Financial are at the extreme opposite end with shares outstanding at -22%
MS&amp;AD features well ranking #11 of financials in our sample, with shares outstanding at -7%, adding well to its commitment on dividends, cross-shareholdings sales


Japan Financials - Buybacks Strongest at Japan Post Insurance, Japan Post Holdings, Yamaguchi

<ul>
<li>Japan's banks can benefit from continued strong loan demand, with signals from the Tankan Survey and from the loan officer survey</li>
<li>The story for Japan's banks is not only about unwinding cross shareholdings and rising interest rates, but it's also about core lending</li>
<li>With bettering loan volume, with more demand and inclination to lend, banks can see benign credit metrics, further supporting profit delta</li>
</ul>


Japan's banks can benefit from continued strong loan demand, with signals from the Tankan Survey and from the loan officer survey
The story for Japan's banks is not only about unwinding cross shareholdings and rising interest rates, but it's also about core lending
With bettering loan volume, with more demand and inclination to lend, banks can see benign credit metrics, further supporting profit delta


Japan's Banks - Lending Is Strong, Loan Officer Survey Suggests More, Credit Costs Can Be Low

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>We discussed last week (Feb. 27 Int'l Compass) how both ACWI-US and the S&amp;P 500 displayed false breakouts, and to look for near-term pullbacks</li>
<li>We said expect pullbacks to range supports at $116 on ACWI-US and 5770-5850 or 5600-5670 on the S&amp;P 500 in the coming weeks, where we would be buyers.</li>
<li>The S&amp;P 500 is testing the 5770-5850 range now, while ACWI-US is testing its 200-day MA at $117. It is possible ACWI-US finds support here. Upgrading Europe to overweight</li>
</ul>


We discussed last week (Feb. 27 Int'l Compass) how both ACWI-US and the S&amp;P 500 displayed false breakouts, and to look for near-term pullbacks
We said expect pullbacks to range supports at $116 on ACWI-US and 5770-5850 or 5600-5670 on the S&amp;P 500 in the coming weeks, where we would be buyers.
The S&amp;P 500 is testing the 5770-5850 range now, while ACWI-US is testing its 200-day MA at $117. It is possible ACWI-US finds support here. Upgrading Europe to overweight


Upgrading Europe to Overweight; Monitoring U.S. (S&P 500) For a Downgrade; Buy Gold Miners and More

Japan

Mizuho Financial Group, Inc. provides comprehensive financial services through its subsidiaries. The Group provides variety of financial services such as general banking, securities brokerage, trust banking, and assets management.

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Mizuho Financial Group (8411 JP)

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 Financials - Buybacks Strongest at Japan Post Insurance, Japan Post Holdings, Yamaguchi

Japan Post Bank in spotlight now, and new data shows improving credit growth and demand, from Tankan Survey and from loan officer survey.

Daniel Tabbush

Japan's Banks - Lending Is Strong, Loan Officer Survey Suggests More, Credit Costs Can Be Low

Japan's banks are seeing good loan volume and diffusion index on Tankan Survey and loan officer survey suggests there is more to come. Selling...

Daniel Tabbush

Upgrading Europe to Overweight; Monitoring U.S. (S&P 500) For a Downgrade; Buy Gold Miners and More

Upgrading Europe to Overweight; Monitoring U.S. $SPX for a Downgrade to Market Weight. $ACWI and $SPX likely bottoming here at 200-day MAs. Bullish...

Vermilion Research

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