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Equity Bottom-Up

<ul>
<li>AI’s evolving every second of every day, and so are the boom’s best investing plays. Early this year, I called out SoftBank Group as a prime AI opportunity.</li>
<li>A wide discount to NAV offered a cheap way to invest in Arm and tech, but that's narrowed after Softbank's 150% share price rally - and more limited NAV growth.</li>
<li>So I’ve taken a fresh look at SoftBank, reviewed my original trade ideas, and found a new undervalued power play that could help you reap a tidy reward.</li>
</ul>


AI’s evolving every second of every day, and so are the boom’s best investing plays. Early this year, I called out SoftBank Group as a prime AI opportunity.
A wide discount to NAV offered a cheap way to invest in Arm and tech, but that's narrowed after Softbank's 150% share price rally - and more limited NAV growth.
So I’ve taken a fresh look at SoftBank, reviewed my original trade ideas, and found a new undervalued power play that could help you reap a tidy reward.


SoftBank Soared. And This Hidden AI Power Play Could Be Next

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

<ul>
<li>
<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>'s weight in 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> has broken through 10% and staying there will lead to capping at the March rebalance.</li>
<li>Nearly half of <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group</a>'s float is held by passive trackers, and the real float is much lower. Capping will increase the real float by a few percentage points.</li>
<li>
<a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group</a> has outperformed 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> significantly over the last 6 months and cumulative excess volume has started to increase sharply. Watch out for pullbacks.</li>
</ul>



Softbank Group (9984 JP)'s weight in the Nikkei 225 (NKY INDEX) has broken through 10% and staying there will lead to capping at the March rebalance.
Nearly half of Softbank Group's float is held by passive trackers, and the real float is much lower. Capping will increase the real float by a few percentage points.

Softbank Group has outperformed the Nikkei 225 (NKY INDEX) significantly over the last 6 months and cumulative excess volume has started to increase sharply. Watch out for pullbacks.


Softbank Group (9984 JP): Breaks Through the 10% Nikkei225 Cap

Senior Credit Analyst, Lucror Analytics

Trung Nguyen

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

<ul>
<li>In today's Morning Views publication we comment on developments of the following high yield issuers: Softbank Group</li>
<li>The UST curve twisted flatter slightly yesterday, albeit there were few material catalysts. The yield on the 2Y UST rose 2 bps to 3.58%, while that on the 10Y UST was unchanged at 4.12%. Equities rebounded from Tuesday’s dip, with the S&amp;P 500 and Nasdaq up 0.6% and 1.1%, respectively.</li>
<li>The September FOMC meeting minutes showed that most officials “judged that it likely would be appropriate to ease policy further over the remainder of this year”.</li>
</ul>


In today's Morning Views publication we comment on developments of the following high yield issuers: Softbank Group
The UST curve twisted flatter slightly yesterday, albeit there were few material catalysts. The yield on the 2Y UST rose 2 bps to 3.58%, while that on the 10Y UST was unchanged at 4.12%. Equities rebounded from Tuesday’s dip, with the S&amp;P 500 and Nasdaq up 0.6% and 1.1%, respectively.
The September FOMC meeting minutes showed that most officials “judged that it likely would be appropriate to ease policy further over the remainder of this year”.


Quantitative Researcher, MRM Research

Nico Rosti

Quantitative Researcher

MRM Research

Quantitative Research

Equity Derivatives

<ul>
<li>
<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> performed a strong 1-week rally 2 weeks ago, then went marginally higher. The stock is OVERBOUGHT according to our models, but the pattern is bullish. </li>
<li>We see two possible scenarios: a) the stock stalls and pulls back this week or b) it keeps rallying towards 20850.</li>
<li>The current pattern had rallies lasting up to 5 weeks in the past, so <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> could rally 2 more weeks, and get closer to 20850.</li>
</ul>



Softbank Group (9984 JP) performed a strong 1-week rally 2 weeks ago, then went marginally higher. The stock is OVERBOUGHT according to our models, but the pattern is bullish. 
We see two possible scenarios: a) the stock stalls and pulls back this week or b) it keeps rallying towards 20850.
The current pattern had rallies lasting up to 5 weeks in the past, so Softbank Group (9984 JP) could rally 2 more weeks, and get closer to 20850.


Softbank Group (9984 JP) Tactical Outlook: Momentum Strong but Stretched, Higher Targets Speculative

<ul>
<li>In today's Morning Views publication we comment on developments of the following high yield issuers: Softbank Group</li>
<li>UST yields rose 5-7 bps yesterday, unwinding earlier declines in the aftermath of the Fed’s widely expected 25 bps rate cut. This was as Chairman Jerome Powell struck a cautious tone during the press conference and signalled less support for larger rate decreases.</li>
<li>The yield on the 2Y UST was up 5 bps at 3.55%, while the yield on the 10Y UST climbed 6 bps to 4.09%. Equities retreated slightly, with the S&amp;P 500 and Nasdaq declining 0.1% and 0.3%, respectively.</li>
</ul>


In today's Morning Views publication we comment on developments of the following high yield issuers: Softbank Group
UST yields rose 5-7 bps yesterday, unwinding earlier declines in the aftermath of the Fed’s widely expected 25 bps rate cut. This was as Chairman Jerome Powell struck a cautious tone during the press conference and signalled less support for larger rate decreases.
The yield on the 2Y UST was up 5 bps at 3.55%, while the yield on the 10Y UST climbed 6 bps to 4.09%. Equities retreated slightly, with the S&amp;P 500 and Nasdaq declining 0.1% and 0.3%, respectively.


Japan

SoftBank Group Corp. provides telecommunication services. The Company also operates ADSL (Asymmetric Digital Subscriber Line) and fiber optic high-speed Internet connection, e-Commerce businesses, and Internet based advertising and auction businesses.

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Softbank Group (9984 JP)

SoftBank Soared. And This Hidden AI Power Play Could Be Next

In February, I called out SoftBank Group as a prime AI opportunity. So I've taken a fresh look, included OpenAI's potential contribution, and found...

Finimize Research