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

AngloGold Ashanti Spon Adr / Technical Analysis

<ul>
<li>We continue to see more global indexes/Sectors breaking out to new highs, with the latest being the MSCI Emerging Markets index (local currency), breaking out from a 2-year base--add exposure.</li>
<li>In terms of MSCI EM specifically, this is a huge risk-on signal for global equities, as EM is pretty much as risky as it gets across the global landscape.</li>
<li>Our bullish outlook (since early November 2023) remains intact; continue to ride this trend higher, and treat pullbacks as buying opportunities.</li>
</ul>


We continue to see more global indexes/Sectors breaking out to new highs, with the latest being the MSCI Emerging Markets index (local currency), breaking out from a 2-year base--add exposure.
In terms of MSCI EM specifically, this is a huge risk-on signal for global equities, as EM is pretty much as risky as it gets across the global landscape.
Our bullish outlook (since early November 2023) remains intact; continue to ride this trend higher, and treat pullbacks as buying opportunities.


MSCI Emerging Markets Finally Join the Rally; China/HK Improve; Upgrading Taiwan, Downgrading Brazil

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

Rikki Malik

Macroeconomics

<ul>
<li>US economic data while surprising on the upside fails to buoy the USD vs the JPY</li>
<li>BOJ awaiting shunto talks for more evidence of a sustained move out of deflation</li>
<li>What are the implications for global markets if mass repatriation of Japanese capital</li>
</ul>


US economic data while surprising on the upside fails to buoy the USD vs the JPY
BOJ awaiting shunto talks for more evidence of a sustained move out of deflation
What are the implications for global markets if mass repatriation of Japanese capital


The Bank of Japan Plays Footsie with the Market-Will They or Won’t They?

Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

<ul>
<li>It's true that the difference in profit margins between a listed subsidiary that focuses on specific business and a parent company that has different businesses is the difference in valuations. </li>
<li>It will be difficult for a parent company to reverse the valuations of its subsidiaries until the parent company dissolves the parent-subsidiary listing and increases its own profit margins.</li>
<li>With respect to corporate governance practices, companies with no major shareholders are included with relatively higher corporate governance scores, but this isn't as significant difference as it tends to be.</li>
</ul>


It's true that the difference in profit margins between a listed subsidiary that focuses on specific business and a parent company that has different businesses is the difference in valuations. 
It will be difficult for a parent company to reverse the valuations of its subsidiaries until the parent company dissolves the parent-subsidiary listing and increases its own profit margins.
With respect to corporate governance practices, companies with no major shareholders are included with relatively higher corporate governance scores, but this isn't as significant difference as it tends to be.


Will Parent Company Valuations Remain Undervalued Until the Parent-Subsidiary Listing Is Dissolved?

<ul>
<li>The fact that many companies have low actual returns is the crux of the problem; investors will likely increase pressure on the companies as ROEs haven't increased noticeably in 2023.</li>
<li>TSE may have indicated the points for disclosure, based in part on the experience of few companies that achieved the listing criteria by successfully disclosing their "plans" for transitional measures.</li>
<li>March 2023, TSE published "Request for Disclosure on the Status of Dialogue with Shareholders." However, mismatches between companies and investors makes it difficult to require all prime market companies this.</li>
</ul>


The fact that many companies have low actual returns is the crux of the problem; investors will likely increase pressure on the companies as ROEs haven't increased noticeably in 2023.
TSE may have indicated the points for disclosure, based in part on the experience of few companies that achieved the listing criteria by successfully disclosing their "plans" for transitional measures.
March 2023, TSE published "Request for Disclosure on the Status of Dialogue with Shareholders." However, mismatches between companies and investors makes it difficult to require all prime market companies this.


Will Disclosure for This P/B Rise Based on the Failure of Transitional Companies "Plan" Work?

<ul>
<li>Even if TSE requires new listed companies to disclose the reasons for listing and the possibility of raising funds, it's questionable whether this will motivate them to grow their businesses.</li>
<li>Companies that are not eligible for investment in terms of market capitalization and trading liquidity criteria will not be effective if they seek contact with institutional investors.</li>
<li>If unlisted stock markets are created, IPOs will increase in size. If listing criteria are raised to tens billion yen in market capitalization, institutional interest in growth market will increase.</li>
</ul>


Even if TSE requires new listed companies to disclose the reasons for listing and the possibility of raising funds, it's questionable whether this will motivate them to grow their businesses.
Companies that are not eligible for investment in terms of market capitalization and trading liquidity criteria will not be effective if they seek contact with institutional investors.
If unlisted stock markets are created, IPOs will increase in size. If listing criteria are raised to tens billion yen in market capitalization, institutional interest in growth market will increase.


TSE Should Aim for a Quality Market Rather than a Market Where Listed Companies Can Easily Inhabit

Japan

The TOPIX, also known as the Tokyo Stock Price Index, is a capitalization-weighted index of all companies listed on the First Section of the Tokyo Stock Exchange. The index is supplemented by the subindices of the 33 industry sectors. The index calculation excludes temporary issues and preferred stocks, and has a base value of 100 as of January 4, 1968.

TSE Tokyo Price Index TOPIX (TPX INDEX)

MSCI Emerging Markets Finally Join the Rally; China/HK Improve; Upgrading Taiwan, Downgrading Brazil

MSCI EM Finally Joins the Rally; China/Hong Kong Continue to Improve; Downgrading Brazil to Market Weight; Upgrading Taiwan to Overweight;...

Vermilion Research

The Bank of Japan Plays Footsie with the Market-Will They or Won’t They?

Potential impact on global markets from Japanese capital repatriation. Despite positive US economic data, the USD is no longer strengthening...

Rikki Malik

Will Parent Company Valuations Remain Undervalued Until the Parent-Subsidiary Listing Is Dissolved?

I would like to discuss the issues on the analysis in groups of companies that have large shareholders and those that do not, and what...

Metrical Inc

Will Disclosure for This P/B Rise Based on the Failure of Transitional Companies "Plan" Work?

I would like to discuss the "Points and Examples of 'Management Conscious of Cost of Capital and Stock Price' from Investors' Perspective (Draft)"...

Metrical Inc

TSE Should Aim for a Quality Market Rather than a Market Where Listed Companies Can Easily Inhabit

I would like to discuss the issues on the document "Future Responses to the Functioning of the Growth Market (Draft)" disclosed by the TSE on...

Metrical Inc

MSCI Emerging Markets Finally Join the Rally; China/HK Improve; Upgrading Taiwan, Downgrading Brazil

MSCI EM Finally Joins the Rally; China/Hong Kong Continue to Improve; Downgrading Brazil to Market Weight; Upgrading Taiwan to Overweight;...

Vermilion Research

The Bank of Japan Plays Footsie with the Market-Will They or Won’t They?

Potential impact on global markets from Japanese capital repatriation. ​Despite positive US economic data, the USD is no longer strengthening...

Rikki Malik

Will Parent Company Valuations Remain Undervalued Until the Parent-Subsidiary Listing Is Dissolved?

I would like to discuss the issues on the analysis in groups of companies that have large shareholders and those that do not, and what...

Metrical Inc

Will Disclosure for This P/B Rise Based on the Failure of Transitional Companies "Plan" Work?

I would like to discuss the "Points and Examples of 'Management Conscious of Cost of Capital and Stock Price' from Investors' Perspective (Draft)"...

Metrical Inc

TSE Should Aim for a Quality Market Rather than a Market Where Listed Companies Can Easily Inhabit

I would like to discuss the issues on the document "Future Responses to the Functioning of the Growth Market (Draft)" disclosed by the TSE on...

Metrical Inc

Potential impact on global markets from Japanese capital repatriation. Despite positive US economic data, the USD is no longer strengthening...