In today’s briefing:
- Hitachi Transport System (9086) – Not a Clear Outcome But Interesting Possibilities
- Mitsui OSK Lines Bear Impulse
- Japan’s Governance: Hitachi Construction Machinery: Additional Notes and Ownership Factor
- Macro; Rating Changes; New Issues; Talking Heads; Top Gainers and Losers
Hitachi Transport System (9086) – Not a Clear Outcome But Interesting Possibilities
- Hitachi is, as the media fuss suggests, in the last stages of its re-formation after ridding itself of nearly two-dozen listed subs over the last decade-plus.
- Hitachi Transport System (9086) is the last major sub/affiliate without a new home. Hitachi owns just under 40%. SG Holdings (9143 JP) owns just under 10%. Both want to sell.
- It is not clear HTS wants to be taken private, but there could be an interesting financial engineering solution to suit the sellers.
Mitsui OSK Lines Bear Impulse
- Mitsui OSK Lines impulsive decline as sell volumes rise is a big negative and sets up a short on a bounce, which may be limited.
- 8,500 is near resistance. 7,000 is tactical support (trendline) where a reaction rise is due. Watch RSI near/below 30 for a short term low.
- Major support at 6,500 targeted representing key dual lows, 200 dma and congestion support.
Japan’s Governance: Hitachi Construction Machinery: Additional Notes and Ownership Factor
- More important than the continuity of the Hitachi brand is how HCM can increase the competitive advantage of its products and how quickly it can respond to changes in market.
- Changes in major shareholders and the presence of major shareholders have been shown to have statistically significant correlations in ROA, Tobin’s q (and changes in market capitalization).
- The existence of the Ownership factor doesn’t necessarily predict the future of HCM, but in construction equipment market with strong competition, having a reliable partner is encouraging in business decisions.
Macro; Rating Changes; New Issues; Talking Heads; Top Gainers and Losers
US equity markets dropped again after with the S&P and Nasdaq down 1% and 1.2%. The latter is down 10% from its November 2021 high. Most sectors were in the red with Consumer Discretionary, Financials and IT down 1.4-1.8%. US 10Y Treasury yields eased 3bp to 1.85%. European markets closed higher with the DAX, CAC and FTSE up 0.2%, 0.6% and 0.4% respectively. Brazil’s Bovespa closed 1.3% higher. In the Middle East, UAE’s ADX and Saudi TASI were up 1.6% and 0.5%. Asian markets have opened broadly higher – HSI, STI and Nikkei were up 1.9%, 0.1% and 0.5% while Shanghai was down 0.2%. US IG CDS spreads were 0.6bp wider and HY CDS spreads were 3.5bp wider, EU Main CDS spreads were 0.1bp tighter and Crossover CDS spreads were 1.7bp tighter. Asia ex-Japan CDS spreads were 4.7bp tighter.
Before it’s here, it’s on Smartkarma
