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

MSCI Emerging Markets Index / Technical Analysis

Big-picture technicals offer a compelling outlook for equities -- in the long-run. Despite arguably stretched trends, especially in the U.S. and EM, one indicator in particular keeps us optimistic: monthly charts.  What is clear right now is: (1) Europe is on the doorstep of breaking above secular resistance; (2) Japan is breaking out above secular resistance; (3) and EM already has. Speaking of EM, we view this as the place to be, or overweight, in 2018. The EM/EAFE’s 20-year chart (below) reveals an in-progress trend reversal (which developed at a secular trendline) in favor of EM.In today’s report we review every global sector, highlighting actionable stocks within each.

Big-picture technicals offer a compelling outlook for equities -- in the long-run. Despite arguably stretched trends, especially in the U.S. and EM, one indicator in particular keeps us optimistic: monthly charts.  What is clear right now is: (1) Europe is on the doorstep of breaking above secular resistance; (2) Japan is breaking out above secular resistance; (3) and EM already has. Speaking of EM, we view this as the place to be, or overweight, in 2018. The EM/EAFE’s 20-year chart (below) reveals an in-progress trend reversal (which developed at a secular trendline) in favor of EM.In today’s report we review every global sector, highlighting actionable stocks within each.

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>At the end of the further extended acceptance period, PMHH owns 93.11% of the shares of Swedish Match (obtained both through shares tendered and market purchases).</li>
<li>PMHH intends to initiate compulsory redemption under the Swedish Companies Act to acquire all remaining shares in Swedish Match and request delisting from Nasdaq Stockholm. PMI wins again.</li>
<li>Although the shares are still liquid, gross spread is 2 bps, and therefore there is no trade worth considering, in my view.</li>
</ul>


At the end of the further extended acceptance period, PMHH owns 93.11% of the shares of Swedish Match (obtained both through shares tendered and market purchases).
PMHH intends to initiate compulsory redemption under the Swedish Companies Act to acquire all remaining shares in Swedish Match and request delisting from Nasdaq Stockholm. PMI wins again.
Although the shares are still liquid, gross spread is 2 bps, and therefore there is no trade worth considering, in my view.


Philip Morris/​​Swedish Match: Squeeze-Out

Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

<ul>
<li>In this insight, we take a look at the names leading the race to become ADDs/DELs for the STOXX Europe 600 and EuroSTOXX Indices for the December 2022 Rebalance.</li>
<li>Including the addition of <a href="https://www.smartkarma.com/entities/dr-ing-h-c-f-porsche-aktiengesellschaft" target="_blank" data-smartkarma-citation="entities:36343:1" rel="noopener">Porsche AG (P911 GR)</a>, there could be around 7 ADDs/DELs during the December 2022 Rebalance. </li>
<li>In addition, there could be as many as five more intra-review changes before the end of the year.</li>
</ul>


In this insight, we take a look at the names leading the race to become ADDs/DELs for the STOXX Europe 600 and EuroSTOXX Indices for the December 2022 Rebalance.
Including the addition of Porsche AG (P911 GR), there could be around 7 ADDs/DELs during the December 2022 Rebalance. 
In addition, there could be as many as five more intra-review changes before the end of the year.


STOXX Europe Quiddity Leaderboard Dec 22: ~7 Regular ADDs/DELs & ~5 Intra-Review ADDs/DELs Possible

<ul>
<li>PMI has obtained acceptances of 82.59%, waives the 90% acceptance condition and extends the acceptance period until 25 November (settlement on 2 December).</li>
<li>SWMA shares are trading at an all-time high of SEK 115.8. Gross spread is 0.17% (estimated annual return is 2.52%). The market discounts that the offer will be successful.</li>
<li>Done deal. PMI is ready to wait until claiming final victory, quite possibly in the further extended acceptance period. It should be able to squeeze-out and delist. Accept offer.</li>
</ul>


PMI has obtained acceptances of 82.59%, waives the 90% acceptance condition and extends the acceptance period until 25 November (settlement on 2 December).
SWMA shares are trading at an all-time high of SEK 115.8. Gross spread is 0.17% (estimated annual return is 2.52%). The market discounts that the offer will be successful.
Done deal. PMI is ready to wait until claiming final victory, quite possibly in the further extended acceptance period. It should be able to squeeze-out and delist. Accept offer.


<ul>
<li>4 November was the deadline to tender. PMI threatened to walk away if it didn't reach 90%. Some funds that opposed the deal trimmed their stakes, likely bought by arbs.</li>
<li>The FT has reported that Elliot (10.5% stake) has tendered and that by 4 November over 80% acceptances were recorded. PMI is very likely to reach now over 90% acceptances.</li>
<li>Results will be announced on 7 November, with settlement on 11 November. The squeeze-out procedure is likely be initialed as soon as possible after settlement. Gross spread is 0.87%.</li>
</ul>


4 November was the deadline to tender. PMI threatened to walk away if it didn't reach 90%. Some funds that opposed the deal trimmed their stakes, likely bought by arbs.
The FT has reported that Elliot (10.5% stake) has tendered and that by 4 November over 80% acceptances were recorded. PMI is very likely to reach now over 90% acceptances.
Results will be announced on 7 November, with settlement on 11 November. The squeeze-out procedure is likely be initialed as soon as possible after settlement. Gross spread is 0.87%.


Sweden

Swedish Match develops, manufactures, and sells smokefree products, including snus, nicotine pouches, and moist snuff, as well as cigars, matches, and lighters. The company focuses on niche tobacco products and other related items. It is headquartered in Stockholm, Sweden, and was founded in 1915.

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

Swedish Match (SWMA SS)

Global Equity Strategy: Overweight EM

Big-picture technicals offer a compelling outlook for equities -- in the long-run. Despite arguably stretched trends, especially in the U.S. and...

Vermilion Research

Philip Morris/Swedish Match: Squeeze-Out

The total stake of shares in Swedish Match held by PMHH, correspond to c. 93.11%. It intends to initiate squeeze-out and delisting from Nasdaq...

Jesus Rodriguez Aguilar

STOXX Europe Quiddity Leaderboard Dec 22: ~7 Regular ADDs/DELs & ~5 Intra-Review ADDs/DELs Possible

I expect the top ranked Potential ADDs to outperform the top ranked Potential DELs until the official Rebalance results are confirmed at the...

Janaghan Jeyakumar, CFA

Offer Becomes Unconditional

PMI has obtained acceptances of 82.59%, waives the 90% acceptance condition and extends the acceptance period until 25 November (settlement on 2...

Jesus Rodriguez Aguilar

Elliot Tenders Its Stake

The FT reported that Elliott Management had decided to tender its stake. This means that PMI should get very close to the 90% threshold to initiate...

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Global Equity Strategy: Overweight EM

Big-picture technicals offer a compelling outlook for equities -- in the long-run. Despite arguably stretched trends, especially in the U.S. and...

Vermilion Research

Philip Morris/​​Swedish Match: Squeeze-Out

The total stake of shares in Swedish Match held by PMHH, correspond to c. 93.11%. It intends to initiate squeeze-out and delisting from Nasdaq...

Jesus Rodriguez Aguilar

STOXX Europe Quiddity Leaderboard Dec 22: ~7 Regular ADDs/DELs & ~5 Intra-Review ADDs/DELs Possible

I expect the top ranked Potential ADDs to outperform the top ranked Potential DELs until the official Rebalance results are confirmed at the...

Janaghan Jeyakumar, CFA

Offer Becomes Unconditional

PMI has obtained acceptances of 82.59%, waives the 90% acceptance condition and extends the acceptance period until 25 November (settlement on 2...

Jesus Rodriguez Aguilar

Elliot Tenders Its Stake

The FT reported that Elliott Management had decided to tender its stake. This means that PMI should get very close to the 90% threshold to initiate...

Jesus Rodriguez Aguilar

Philip Morris/Swedish Match: Squeeze-Out