In today’s briefing:
- NVIDIA. Yikes! Have We Missed The Boat?
- CES China Semiconductor Chips Index Rebalance: Six Changes in June
- Assessing the Canon Buyback and Follow-On Performance
- CSI500 Index Rebalance: Adds Starting to Outperform
- EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Tech Leads the Way
- Taiwan Dual-Listings: ADR Premiums Surge to Near All-Time Highs on ‘Nvidia-Rally’
- The Future of Insurance
NVIDIA. Yikes! Have We Missed The Boat?
- Q1’23 revenues of $7.19 billion, down 13% from a year ago but up 19% sequentially and ~10% higher than the guided midpoint.
- Current quarter outlook for revenues of $11 billion, a ~55% sequential increase, sparked mayhem in the markets and sent NVIDIA’s stock soaring over 24% in after hours trading
- Don’t go chasing waterfalls, there are many other ways to rise with the tide
CES China Semiconductor Chips Index Rebalance: Six Changes in June
- There are 6 changes for the CES China Semiconductor Chips Index that will be implemented at the close on 9 June.
- All the inclusions are also additions to the CSI 500 Index and the passive flows will come from multiple trackers.
- The adds have outperformed the deletes over the last couple of weeks and there could be further outperformance over the next two weeks.
Assessing the Canon Buyback and Follow-On Performance
- 10 days ago Canon Inc (7751 JP) announced its 18th ¥50bn buyback in 15yrs. They have a pattern, both in execution and outperformance.
- Historically, they are reasonably aggressive. It may pay to observe market data to see when they are done. It may also pay to look at peer outperformance cycles.
- Here I look at both – buyback cycle performance and cycle outperformance. Good so far, and now I see a tactical trade but it’s not overwhelming.
CSI500 Index Rebalance: Adds Starting to Outperform
- There are 50 changes a side for the CSI Smallcap 500 Index at the upcoming rebalance that will be implemented at the close of trading on 9 June.
- One way turnover at the rebalance is estimated at 9.45% leading to a one-way trade of CNY 5.93bn. The IT and Industrials sectors gain the most index spots.
- 8 adds to the CSI 500 Index are deletes from the CSI 300 Index while 3 deletes from the CSI 500 Index are adds to the CSI 300 Index.
EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Tech Leads the Way
- 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
Taiwan Dual-Listings: ADR Premiums Surge to Near All-Time Highs on ‘Nvidia-Rally’
- The semiconductor stock rally in the U.S. caused by Nvidia’s monster results and guidance last week has caused multiple ADR premiums to surge to near all-time highs.
- TSMC and UMC’s ADR premiums don’t appear sustainable given their trading history.
- Telecom CHT wasn’t affected by the Nvidia rally and now has one of the lowest ADR discounts in its history.
The Future of Insurance
- SPACs are often synonymous with high-risk, cash-intensive early-stage companies making their public debut, but occasionally, a SPAC deal like CCC Intelligent Solutions emerges and shifts the narrative.
- CCC is a SaaS business with four decades of operational history in the property and casualty insurance sector that went public through a SPAC in 2021.
- Over the company’s history, it has processed over $1 trillion in transactions for 30,000 businesses.
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