Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>Big Tesla move up may help sentiment for Panasonic, although gains are largely Trump related.</li>
<li>Lumentum strong numbers and big move up will continue to help sentiment for optical related plays in Japan.</li>
<li>Good numbers from Sony with solid performance from its mainstay games and imaging segments.</li>
</ul>


Big Tesla move up may help sentiment for Panasonic, although gains are largely Trump related.
Lumentum strong numbers and big move up will continue to help sentiment for optical related plays in Japan.
Good numbers from Sony with solid performance from its mainstay games and imaging segments.


Japan Morning Connection: Strong Earnings from Sony's Games and Sensors

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

Event-Driven

<ul>
<li>Up to 9 stocks could be deleted from global passive portfolios in November. The deletion will lead to liquidity events where trackers will need to sell multiple days of ADV.</li>
<li>There has been a buildup of shorts on nearly all these stocks though the extent of the pre-positioning varies.</li>
<li>The increase in shorts is smaller than the estimated passive selling, though there is a fair amount of variability across the names.</li>
</ul>


Up to 9 stocks could be deleted from global passive portfolios in November. The deletion will lead to liquidity events where trackers will need to sell multiple days of ADV.
There has been a buildup of shorts on nearly all these stocks though the extent of the pre-positioning varies.
The increase in shorts is smaller than the estimated passive selling, though there is a fair amount of variability across the names.


Japan: Potential Passive Selling in November

<ul>
<li>Don't expect initial 'sell the fact' reaction to Fed's best-case 50 bps cut to weigh on Japan, with a lot of money on the sidelines in Asia to be deployed.</li>
<li>Shin-Etsu via its PVC sub Shintech and the Japanese home builders with high US exposure continue to look attractive as rate cut plays.</li>
<li>Further US export controls for allies on chip making equipment are imminent and names with lower China sales ratios remain the safer SPE plays.</li>
</ul>


Don't expect initial 'sell the fact' reaction to Fed's best-case 50 bps cut to weigh on Japan, with a lot of money on the sidelines in Asia to be deployed.
Shin-Etsu via its PVC sub Shintech and the Japanese home builders with high US exposure continue to look attractive as rate cut plays.
Further US export controls for allies on chip making equipment are imminent and names with lower China sales ratios remain the safer SPE plays.


Japan Morning Connection: Market Expected to Recover After Fed Announcement

Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Ingenuity

Our focus is exclusively on in-depth research & consulting in the broader semiconductor industry. We focus on the key players, namely Intel, Micron, Qualcomm, Apple, Samsung, NVIDIA, AMD, TSMC & Global Foundries - as well as some of the lesser known, but nonetheless critical, companies such as ASML (for EUV), Mellanox, Cavium, Xilinx etc. We specialise in their products, roadmaps, process technologies, competitive advantages & threats etc. We also help our clients understand the implications of new and emerging technologies, e.g. 3D X-Point, 3D NAND, Carbon Nanotubes, Autonomous Driving, Graphene, Silicon Photonics, Wafer-Level Optics, Artificial Intelligence, FPGA, GPU, ASIC etc. 

Semiconductor Analysis & Research

<ul>
<li>During Q224, the top 4 silicon wafer manufacturers saw their revenues increase 12.3% QoQ to ~$2.5 billion. This was down 3% YoY.</li>
<li>Silicon wafer area shipments in Q224 amounted to 3,035 million square inches (MSI), an increase of 7.1% QoQ but a decline of 8.9% YoY.</li>
<li>The Silicon wafer segment is entering a recovery phase.</li>
</ul>


During Q224, the top 4 silicon wafer manufacturers saw their revenues increase 12.3% QoQ to ~$2.5 billion. This was down 3% YoY.
Silicon wafer area shipments in Q224 amounted to 3,035 million square inches (MSI), an increase of 7.1% QoQ but a decline of 8.9% YoY.
The Silicon wafer segment is entering a recovery phase.


Silicon Wafers. Recovery Is Nigh Yet Valuations Have Slumped To 5 Year Lows. But Why?

<ul>
<li>ARM +11% after a broker upgrade yesterday will see <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> rebound sharply off heavily sold levels yesterday, despite its surprise Y500bn buyback.</li>
<li>Tech wide relief rally in the US sets the tone for a very strong day in Japan, helped by strong earnings by the likes of <a href="https://www.smartkarma.com/entities/tokyo-electron-ltd" target="_blank" data-smartkarma-citation="entities:280:1" rel="noopener">TEL (8035)</a> and <a href="https://www.smartkarma.com/entities/kokusai-electric-corp" target="_blank" data-smartkarma-citation="entities:40152:1" rel="noopener">Kokusai (6525).</a>
</li>
<li>Jobs data saw leisure and powersports names in the US rally which should help the likes of <a href="https://www.smartkarma.com/entities/yamaha-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:7411:1" rel="noopener">Yamaha Motor (7272 JP)</a> and <a href="https://www.smartkarma.com/entities/kawasaki-heavy-industries" target="_blank" data-smartkarma-citation="entities:8790:1" rel="noopener">KHI (7012 JP)</a> rebound sharply also.</li>
</ul>


ARM +11% after a broker upgrade yesterday will see Softbank Group (9984 JP) rebound sharply off heavily sold levels yesterday, despite its surprise Y500bn buyback.
Tech wide relief rally in the US sets the tone for a very strong day in Japan, helped by strong earnings by the likes of TEL (8035) and Kokusai (6525).

Jobs data saw leisure and powersports names in the US rally which should help the likes of Yamaha Motor (7272 JP) and KHI (7012 JP) rebound sharply also.


Japan Morning Connection: 9984 JP, 8035 JP, 6525 JP

Japan

SUMCO Corporation manufactures silicon wafers for the semiconductor industry. The Company produces silicon wafers used to produce solar batteries as well as ultra-high purity quartz used to produce vessels for silicon manufacturing process. SUMCO markets its products worldwide.

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SUMCO Corp (3436 JP)

Japan Morning Connection: Strong Earnings from Sony's Games and Sensors

Tesla's move may boost Panasonic sentiment, Lumentum's strong numbers will benefit optical plays, Sony reports good numbers driven by games and...

Andrew Jackson

Japan: Potential Passive Selling in November

There are a bunch of stocks in Japan that could be sold by passive global investors in November. Shorts have increased on nearly all stocks and the...

Brian Freitas

Japan Morning Connection: Market Expected to Recover After Fed Announcement

Japan expected to recover this morning after Fed announcement. Japanese home builders continue to look attractive. Companies with lower China...

Andrew Jackson

Silicon Wafers. Recovery Is Nigh Yet Valuations Have Slumped To 5 Year Lows. But Why?

Silicon wafer area shipments increased 7.1% QoQ in Q224 while revenues of the top 4 players increased 12.3%. The segment is finally recovering but...

William Keating

Japan Morning Connection: 9984 JP, 8035 JP, 6525 JP

ARM stock surges after broker upgrade, Softbank Group rebounds, tech rally in US boosts Japan market, leisure and powersports names rally in US...

Andrew Jackson

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Japan Morning Connection: Strong Earnings from Sony's Games and Sensors

​Tesla's move may boost Panasonic sentiment, Lumentum's strong numbers will benefit optical plays, Sony reports good numbers driven by games and...

Andrew Jackson

Japan: Potential Passive Selling in November

There are a bunch of stocks in Japan that could be sold by passive global investors in November. Shorts have increased on nearly all stocks and the...

Brian Freitas

Japan Morning Connection: Market Expected to Recover After Fed Announcement

​Japan expected to recover this morning after Fed announcement. Japanese home builders continue to look attractive. Companies with lower China...

Andrew Jackson

Silicon Wafers. Recovery Is Nigh Yet Valuations Have Slumped To 5 Year Lows. But Why?

Silicon wafer area shipments increased 7.1% QoQ in Q224 while revenues of the top 4 players increased 12.3%. The segment is finally recovering but...

William Keating

Japan Morning Connection: 9984 JP, 8035 JP, 6525 JP

​ARM stock surges after broker upgrade, Softbank Group rebounds, tech rally in US boosts Japan market, leisure and powersports names rally in US...

Andrew Jackson

Tesla's move may boost Panasonic sentiment, Lumentum's strong numbers will benefit optical plays, Sony reports good numbers driven by games and...

Japan expected to recover this morning after Fed announcement. Japanese home builders continue to look attractive. Companies with lower China...

ARM stock surges after broker upgrade, Softbank Group rebounds, tech rally in US boosts Japan market, leisure and powersports names rally in US...