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Smartkarma Daily Briefs

May 21
0

Daily Brief Crypto: A Dive Into DeFi and more

By | Crypto, Daily Briefs

In today’s briefing:

  • A Dive Into DeFi

A Dive Into DeFi

By Etherbridge

  • As technology continues to shape our lives and work environments, one significant innovation is ready to transform the financial landscape: smart contracts.
  • These self-executing digital agreements, powered by blockchain technology, are set to redefine financial services by extending their availability, increasing their scope, and transforming the very foundation of how we manage our financial lives.
  • While still in the early stages of development, smart contracts have already begun to showcase their potential through promising use cases and working products, offering a tantalizing glimpse into the future of finance.

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May 21
0

Daily Brief Event-Driven: Last Week in Event SPACE: Shinsei Bank and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Last Week in Event SPACE: Shinsei Bank, China Everbright, Rakuten, Sony Corp
  • Official Results of KOSPI 200 Sector Indices Rebalancing: Kakao Pay’s Sector Change Confirmed
  • EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Bad Data Is Good?
  • (Mostly) Asia-Pac Weekly Risk Arb Wrap: InvoCare, Newcrest/Newmont, Penguin Int’l, Golden Energy

Last Week in Event SPACE: Shinsei Bank, China Everbright, Rakuten, Sony Corp

By David Blennerhassett

Official Results of KOSPI 200 Sector Indices Rebalancing: Kakao Pay’s Sector Change Confirmed

By Sanghyun Park

  • The fact that KS200 IT has a significantly higher AUM provides a flow trading opportunity. This is due to the change in GICS for Kakao Pay from IT to Financials.
  • It has been observed that Kakao Pay’s DTV has recently decreased significantly. This may result in the flow size reaching up to 1.4 times DTV.
  • It is advisable to design an outright short position for day trading purposes. Additionally, a more aggressive approach can be considered by combining a long position on Samsung SDS.

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Bad Data Is Good?

By Simon Harris

  • Weekly summary of vol changes and moves across Global Markets
  • Analysing ATM volatility and skew changes over the last 5 days
  • We suggest a few trades to take advantage of the implied vol surfaces

(Mostly) Asia-Pac Weekly Risk Arb Wrap: InvoCare, Newcrest/Newmont, Penguin Int’l, Golden Energy

By David Blennerhassett

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May 21
0

Daily Brief Equity Bottom-Up: Tokyo Electron. Betting Big On MAGIC Despite The Downturn and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Tokyo Electron. Betting Big On MAGIC Despite The Downturn
  • KPIT Tech: Strong Q4FY23 and Upbeat FY24 Guidance
  • Kazatomprom (KAP LI): Revelation Of A Silent Uranium Deal
  • Krafton: India & Improving Shareholder Return Policy Likely to Lead to Further Outperformance
  • China Healthcare Weekly (May.19) – “Hedge Logic” Of CXO, Beijing’s DRG+VBP Policy, Zylox-Tonbridge

Tokyo Electron. Betting Big On MAGIC Despite The Downturn

By William Keating

  • Q1’23 revenues of ¥558.2 billion, up 19% sequentially and up 1% YoY
  • FY24 outlook down 23% YoY with H2 showing a modest improvement compared to H1
  • R&D & CapEx investment increasing significantly while YoY revenue set to decline by 23%

KPIT Tech: Strong Q4FY23 and Upbeat FY24 Guidance

By Ankit Agrawal, CFA

  • KPIT reported a strong Q4FY23 with 8.5% QoQ growth in CC (Constant Currency) terms. Q4FY23 EBITDA margin at 19.1% came in higher than 18.5%+ expected.
  • Deal TCV came in highest ever helped by a mega deal of INR $250mm. Even excluding the mega deal, the deal TCV was healthy at $173mm vs $150mm+ typically.
  • KPIT has guided for an upbeat FY24. FY24 revenue growth is guided to be 27-30% in CC terms. FY24 EBITDA margin is guided at 19-20% vs 18.9% in FY23.

Kazatomprom (KAP LI): Revelation Of A Silent Uranium Deal

By Mohit Surana

  • The Kazakh government silently allowed Russia to buy 49% stake in JV Budenovskoye sometime in 2021-H2.
  • Kazatomprom owned 51% in the JV, but the deal was not properly disclosed in Kazatomprom reports.
  • Many company officials resigned since the deal fearing breach of legal duty on disclosure.

Krafton: India & Improving Shareholder Return Policy Likely to Lead to Further Outperformance

By Douglas Kim

  • There is a high likelihood of the Indian authorities fully approving the BGMI game after three months of trial. Plus, it has a solid pipeline of new games under development. 
  • Krafton is improving its shareholder return policy. In addition, the consensus is likely to raise the company’s earnings estimates post its excellent results in 1Q 2023. 
  • We maintain our Positive view of Krafton and its shares are likely to continue to outperform the market this year. 

China Healthcare Weekly (May.19) – “Hedge Logic” Of CXO, Beijing’s DRG+VBP Policy, Zylox-Tonbridge

By Xinyao (Criss) Wang

  • The Beijing Medical Insurance Bureau issued a notice soliciting opinions on the linkage program of DRG payment and VBP policy in the city, involving sports medicine, neuro-intervention, and electrophysiology.
  • The basic logic of CXO is that there should be no significant fluctuations with the success or failure of a specific drug, unless this drug significantly increases total medical expenditure.
  • Zylox-Tonbridge Medical Technology (2190 HK) achieved high performance growth in 2022, and is a beneficiary of centralized procurement policy at the current stage.However, it still has to face some challenges.

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May 21
0

Daily Brief Macro: China May Nullify World Recession and more

By | Daily Briefs, Macro

In today’s briefing:

  • China May Nullify World Recession
  • Positioning Watch: The Mystery Behind the Massive Shorts in Equities and Bonds

China May Nullify World Recession

By Michael J. Howell

  • Several indicators point to approaching World recessionary trough and early pick-up. Chinese economic recovery since late-2022 ‘re-opening’ may help explain this
  • Chinese Liquidity injections have slowed from their early year pace, but no evidence of deliberate tightening. Also visible acceleration in shadow bank lending
  • Switch from last year’s Chinese tightening to this year’s policy easing may lift the World economy higher over coming months. We should look for confirming evidence from other Asian markets

Positioning Watch: The Mystery Behind the Massive Shorts in Equities and Bonds

By Andreas Steno

  • Both equity market shorts and US Treasury shorts are close to all time highs in futures positioning data
  • But is the positioning data a true indication of the underlying market sentiment?
  • We doubt it and discuss why both equity and curve positioning could be skewed by technicalities here

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May 21
0

Most Read: Neuren Pharmaceuticals, Kum Yang, Stockland, Yunsung F&C, Suruga Bank Ltd, Alibaba Group, Nifty Next 50 Index, Tokyo Electron, Kakao Pay and more

By | Daily Briefs, Most Read

In today’s briefing:

  • S&P/​​​​​​​ASX Index Rebalance Preview: Potential Changes, Impact, Shorts & Positioning
  • KOSPI200 Index Rebalance: Two Sets of Changes
  • MVIS Australia A-REITs Index Rebalance Preview: Capping Changes & Flows
  • KOSDAQ150 Index Rebalance: 8 Changes with Some Surprises; Performance Deteriorating
  • Postcard from HK <> SG | “The Frog in the Well”
  • Suruga Bank (8358) To Sell, Then Buy Back 17% of the Bank, but HOW Is Key.
  • Alibaba Potential IPOs – Part 3 – An Early Look at Cloud, Easy US$10bn+
  • Asia Long/Short Update
  • Tokyo Electron. Betting Big On MAGIC Despite The Downturn
  • Official Results of KOSPI 200 Sector Indices Rebalancing: Kakao Pay’s Sector Change Confirmed

S&P/​​​​​​​ASX Index Rebalance Preview: Potential Changes, Impact, Shorts & Positioning

By Brian Freitas

  • The review period for the June rebalance of the S&P/ASX family of indices ends tomorrow and we expect two changes for the S&P/ASX 200 (AS51 INDEX). 
  • Impact of passive trading on the stocks varies between 4.3-11 days of ADV. Short interest on the potential adds is small while there are significant shorts on the potential deletes.
  • We expect there is pre-positioning on at least three of the four stocks. In some cases that is small, while it could be a lot larger in other stocks.

KOSPI200 Index Rebalance: Two Sets of Changes

By Brian Freitas

MVIS Australia A-REITs Index Rebalance Preview: Capping Changes & Flows

By Brian Freitas

  • We do not expect any constituent changes in June (that could change though!). The only flows are likely to be from capping the constituents at 10% of the index weight.
  • Capping changes will lead to a one-way turnover of 2.15% resulting in a one-way trade of A$14m. There are two stocks with over A$5m to trade.
  • Stockland (SGP AU) will be the most affected stock with passive trackers needing to sell over 1 day of ADV. The stock has run up and shorts are increasing.

KOSDAQ150 Index Rebalance: 8 Changes with Some Surprises; Performance Deteriorating

By Brian Freitas

  • There are 8 inclusions and 8 exclusions for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the June rebalance to be implemented at the close on 8 June.
  • There is one surprise on the deletions and there are a few surprise non-deletions. Smaller surprise on some non-inclusions.
  • Short interest is non-existent on the adds and is a lot larger on the deletes. Shorts on the deletes will be covered in the next few weeks.

Postcard from HK <> SG | “The Frog in the Well”

By Pranav Bhavsar

  • Over the last week, we engaged in fruitful interactions with fellow analysts and portfolio managers in Hong Kong and Singapore.
  • In this insight, we share perspectives we picked up on India as a market, along with regional market dynamics.
  • The way ahead involves embracing a glass well approach, combining our deep focus on Indian equities with a broader understanding of regional markets and consumer trends.

Suruga Bank (8358) To Sell, Then Buy Back 17% of the Bank, but HOW Is Key.

By Travis Lundy

  • Suruga Bank Ltd (8358 JP) today signed an MOU (with board resolution) to form a business and capital alliance with Credit Saison (8253 JP). 
  • Suruga will sell (post-dilution) 15+% of voting rights to Credit Saison, and buy 4.44% of CreditSaison. Then Suruga will try to buy back the shares it sold to Credit Saison.
  • A look at the history is instructive, as is a look at the shareholder structure and the change in business model post-2019. Not as easy as it looks. 

Alibaba Potential IPOs – Part 3 – An Early Look at Cloud, Easy US$10bn+

By Sumeet Singh

  • On 28th Mar 2023, Alibaba Group (9988 HK)  announced that it would adopt a new organizational and governance structure, splitting into six major business groups and other investments.
  • Alibaba also stated that each of the business groups would be set up as an independent entity with its own board and the groups will eventually seek to list.
  • In our previous note, we highlighted which division could list. In this note, we will look at the Cloud segement.

Asia Long/Short Update

By Thomas Schroeder

  • Top longs have been India and Australia. Top shorts HSI and Korea. Korea’s bearish wedge is maturing and stands out as macro risk.
  • Turned neutral the Nikkei above 29,200. 29,500 represents from buy support to threaten 31,000. Near term top at 31k for a pullback try.
  • USD upside breakout is front running a softer equity bias in Asia for June. SPX 4,200/20 top zone throw over probable.

Tokyo Electron. Betting Big On MAGIC Despite The Downturn

By William Keating

  • Q1’23 revenues of ¥558.2 billion, up 19% sequentially and up 1% YoY
  • FY24 outlook down 23% YoY with H2 showing a modest improvement compared to H1
  • R&D & CapEx investment increasing significantly while YoY revenue set to decline by 23%

Official Results of KOSPI 200 Sector Indices Rebalancing: Kakao Pay’s Sector Change Confirmed

By Sanghyun Park

  • The fact that KS200 IT has a significantly higher AUM provides a flow trading opportunity. This is due to the change in GICS for Kakao Pay from IT to Financials.
  • It has been observed that Kakao Pay’s DTV has recently decreased significantly. This may result in the flow size reaching up to 1.4 times DTV.
  • It is advisable to design an outright short position for day trading purposes. Additionally, a more aggressive approach can be considered by combining a long position on Samsung SDS.

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May 21
0

Daily Brief Industrials: Hong Kong Hang Seng Index and more

By | Daily Briefs, Industrials

In today’s briefing:

  • EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Bad Data Is Good?

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Bad Data Is Good?

By Simon Harris

  • Weekly summary of vol changes and moves across Global Markets
  • Analysing ATM volatility and skew changes over the last 5 days
  • We suggest a few trades to take advantage of the implied vol surfaces

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May 21
0

Daily Brief Industrials: Hong Kong Hang Seng Index and more

By | Daily Briefs, Industrials

In today’s briefing:

  • EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Bad Data Is Good?

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Bad Data Is Good?

By Simon Harris

  • Weekly summary of vol changes and moves across Global Markets
  • Analysing ATM volatility and skew changes over the last 5 days
  • We suggest a few trades to take advantage of the implied vol surfaces

💡 Before it’s here, it’s on Smartkarma

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May 21
0

Daily Brief Energy/Materials: NAC Kazatomprom JSC and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • Kazatomprom (KAP LI): Revelation Of A Silent Uranium Deal

Kazatomprom (KAP LI): Revelation Of A Silent Uranium Deal

By Mohit Surana

  • The Kazakh government silently allowed Russia to buy 49% stake in JV Budenovskoye sometime in 2021-H2.
  • Kazatomprom owned 51% in the JV, but the deal was not properly disclosed in Kazatomprom reports.
  • Many company officials resigned since the deal fearing breach of legal duty on disclosure.

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May 21
0

Daily Brief Financials: Bitcoin, SBI Shinsei Bank, US 10Y and more

By | Daily Briefs, Financials

In today’s briefing:

  • A Dive Into DeFi
  • (Mostly) Asia-Pac Weekly Risk Arb Wrap: InvoCare, Newcrest/Newmont, Penguin Int’l, Golden Energy
  • US 10YR Yield (USGG10YR) – Weekly Close Confirms a Renewed MT Uptrend – Target 3.90/3.95

A Dive Into DeFi

By Etherbridge

  • As technology continues to shape our lives and work environments, one significant innovation is ready to transform the financial landscape: smart contracts.
  • These self-executing digital agreements, powered by blockchain technology, are set to redefine financial services by extending their availability, increasing their scope, and transforming the very foundation of how we manage our financial lives.
  • While still in the early stages of development, smart contracts have already begun to showcase their potential through promising use cases and working products, offering a tantalizing glimpse into the future of finance.

(Mostly) Asia-Pac Weekly Risk Arb Wrap: InvoCare, Newcrest/Newmont, Penguin Int’l, Golden Energy

By David Blennerhassett

US 10YR Yield (USGG10YR) – Weekly Close Confirms a Renewed MT Uptrend – Target 3.90/3.95

By David Coloretti, CMT

  • At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. •1) Response to key levels. •2) Price action. •3) Momentum confirmation.
  • US 10yr Yield broke above its 4 decade downtrend at 2.70 in 2022, confirming a positive multi-year outlook and target towards 6.24 (38.2% retracement of the LT downtrend).
  • Last week’s weekly close confirmed a renewal of the MT uptrend bias after a multi-month period of consolidation finally produced a definitive positive breakout above 3.57/3.64. Interim target at 3.90/3.95.

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May 21
0

Daily Brief TMT/Internet: Tokyo Electron, KPIT Technologies, Krafton Inc, Nasdaq-100 Stock Index and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Tokyo Electron. Betting Big On MAGIC Despite The Downturn
  • KPIT Tech: Strong Q4FY23 and Upbeat FY24 Guidance
  • Krafton: India & Improving Shareholder Return Policy Likely to Lead to Further Outperformance
  • NASDAQ 100 E-Mini Futures (NQ1) – Our 13740 Target Was Achieved Last Week – Ongoing Bullish Bias

Tokyo Electron. Betting Big On MAGIC Despite The Downturn

By William Keating

  • Q1’23 revenues of ¥558.2 billion, up 19% sequentially and up 1% YoY
  • FY24 outlook down 23% YoY with H2 showing a modest improvement compared to H1
  • R&D & CapEx investment increasing significantly while YoY revenue set to decline by 23%

KPIT Tech: Strong Q4FY23 and Upbeat FY24 Guidance

By Ankit Agrawal, CFA

  • KPIT reported a strong Q4FY23 with 8.5% QoQ growth in CC (Constant Currency) terms. Q4FY23 EBITDA margin at 19.1% came in higher than 18.5%+ expected.
  • Deal TCV came in highest ever helped by a mega deal of INR $250mm. Even excluding the mega deal, the deal TCV was healthy at $173mm vs $150mm+ typically.
  • KPIT has guided for an upbeat FY24. FY24 revenue growth is guided to be 27-30% in CC terms. FY24 EBITDA margin is guided at 19-20% vs 18.9% in FY23.

Krafton: India & Improving Shareholder Return Policy Likely to Lead to Further Outperformance

By Douglas Kim

  • There is a high likelihood of the Indian authorities fully approving the BGMI game after three months of trial. Plus, it has a solid pipeline of new games under development. 
  • Krafton is improving its shareholder return policy. In addition, the consensus is likely to raise the company’s earnings estimates post its excellent results in 1Q 2023. 
  • We maintain our Positive view of Krafton and its shares are likely to continue to outperform the market this year. 

NASDAQ 100 E-Mini Futures (NQ1) – Our 13740 Target Was Achieved Last Week – Ongoing Bullish Bias

By David Coloretti, CMT

  • At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. •1) Response to key levels. •2) Price action. •3) Momentum confirmation.
  • On 27 March 2023 we identified a pending 6.2% upswing in NQ1 and 13740 target. A further bullish outlook would hinge upon the response to 1yr range highs at 13740.
  • Our interim target at 13740 was achieved and exceeded last week. The weekly close above 13740 identifies an evolving MT uptrend. Interim target at 14350. Potential to 15000+ in 2023. 

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