Daily Brief Thematic (Sector/Industry): Good Morning Japan | Coordinated Fed "Attack" Tanks Markets; Compounds China Woes and more

In today’s briefing:

Good Morning Japan | Coordinated Fed “Attack” Tanks Markets; Compounds China Woes
2023 High Conviction: Semiconductor Down Market
EM Digital Banks Review – Inter and Bank Jago in the Negative Spotlight

Good Morning Japan | Coordinated Fed “Attack” Tanks Markets; Compounds China Woes

Good Morning Japan: We strive to provide the very best breaking macro, stock and thematic overnight news that will impact your trading day in Japan. FOLLOW US to keep abreast.
OVERSEAS: Coordinated Fed attack on sentiment tanks market; China locks continues to weigh in; MSFT-Activision-still in play; Aggressive EU taxes on big tobacco
JAPAN: BOJ takes hit on Bonds; Sony good news – MSFT+Apple; Notable broker downgrades across Autos (Nissan; Subaru) and Softbank; Regulators collusion clamp down on Japan Advertising firms; Eisai/Biogen -ve

The current semiconductor market meltdown can be expected to continue through the end of 2024
This will reduce 2022 market growth to 5%, and will drive a decline of 19% in 2023
Stocks will be unevenly influenced by this, with the most dramatic declines hitting makers of volume commodities, smaller declines in differentiated products, and a weak impact on older technology products.

Among the EM digital banks covered, we remain negative on Inter and continue to see Bank Jago as an over-valued growth play; we are neutral on Nubank and Kakaobank
Client penetration is improving, yet digital banks, with the exception of Nubank, need to achieve better product penetration to enhance digital efficiency and better leverage off their lower cost bases
Neobanks’ other key hurdles to enhanced profitability are delinquency and cost of risk charges along with increased regulatory risk; high capital absorption from fast loan growth is another investor concern

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