What Worked Asia - 02 Sep 2016 - Nothing really stood out in HK/China, but good selloff in Size in Taiwan

What Worked – Nothing really stood out in Hong Kong / China this week. There was a slight move into momentum names in China and a slight move into high Beta names in Hong Kong. High Beta names in Hong Kong that did well were Luen Wong Group up 30% and Melco International Development up 15%. Singapore saw a move into high growth names this week, with a slight sell off in high Beta names. Singapore Post is up 3% and Mapletree Commercial is up 3%. There was a good move in Value and large cap names in South Korea this week. Samsung Card is up 17% and Pan Ocean is up 11%.

In Taiwan there was a big selloff in large cap names. Evergreen Marine is up 16% and Epistar Corp is up 12%. Beta and low PBR names did not do well in Indonesia this week. Low PBR names that did not do well were Bank CIMB Niaga is down 22% and Holcim Indonesia is down 9%. India saw a slight move into high Beta and momentum names. Momentum names that were up this week were Dr. LaiPathLabs up 26% and Aegis Logistics up 20%. Positive EPS revisions names did well in the Philippines this week. San Miguel Pure Foods was up 4% and LT Group was up 3%.

Who Moved – 182 names moved on volume this week in Asia. At the sector level, a good amount of the spikes came in the Financial and Health Technology sectors. At the regional level, HK/China made up almost half of the volume spikes, despite no factor really standing out in HK/China. On the positive side, Plaza Indonesia Realty is up 21%, China Aircraft Leasing Group is up 17% and Korean Air Lines is up 20%. On the other side, Hon Hai Precision Industry is down 13%, China Goldjoy Group is down 13% and Creative China Holdings is down 10%.

Summary

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What Worked Japan - 02 Sep 2016 - Value and Beta very strong after a good month in August

What Worked – Value did very well this week. PBR names came in with an over 50% IC this week. PBR has not been consistently strong since February 2015, however recently PBR has worked 6 out of the last 8 weeks. Low PBR names that did well were Iyo Bank (8385) up 17%, Tokyo Electric Power Company (9501) up 19% and Juroku Bank (8356) up 16%. Low PE names also continued to do well this week. Low PE names have outperformed since the beginning of August. Joyo Bank (8333) is up 15%, Unipres Corp (5949) is up 13% and Chiba Bank is up 13%.

As with Value, high Beta names did very well in August and this last week. Beta has not consistently done this well in the last 2 years. High Beta names that did well were Minebea (6479) up 14%, Hyakugo Bank (8368) was up 14% and Dai-Ichi Life Insurance was up 13%. Names down over the last year bounced nicely this week, particularly in the Banks sector. Gunma Bank (8334) is up 14% and Bank of Kyoto (8369) is up 13%. There has been a clear shift away from Growth and into Value/Beta since the beginning of August. COSMOS Pharma (3349) was down 7% and Square Enix was down 5%

Who Moved – Only 21 names moved on volume this week. Banks and Retail names made up almost half of the volume spikes. Iyo Bank (8385) is up 17%, Tokyo Electric Power Company (9501) is up 19% and Juroku Bank (8356) is up 16%. On the other side, AEON Financial Service (8570) is down 9%, CALBEE is down 9% and Lawson (2651) was down 8%.

Summary

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What Worked Japan - 26 Aug 2016 - High Beta and Low PBR names were hurt as Retail names benefited

What Worked – Pretty good sell off in names that were up over the last month and high Beta names. This is the first week high Beta names have not done well since the middle of July. Names that did well over the last month that were hurt this week were Sumco (3436) down 7%, Sony Financial (8729) down 7% and Tokyo Ohka Kogyo (4186) down 7%. High Beta names that did not do well this week were Unipres Corp (5949) down 10%, Alps Electric (6770) down 9% and Sumitomo Heavy Industries (6302) down 7%.

Looking at Value, PE was pretty much insignificant but we did see a selloff in low PBR names. Japan Petroleum Exploration (1662) was down 9%, Inpex (1605) was down 8% and J.Front Retailing (3086) was down 7%. On the other side, names with a high % of Retail Investors did well this week after poor performance since the beginning of July. Capcom (9697) was up 8%, Kyowa Exeo (1951) was up 6% and Iida Group (3291) was up 6%.

Who Moved – Not a strong week for volume this week. Only 12 names moved on volume. On the positive side, UNY Group was up 10%, Familymart (8028) was up 9% and Shochiku (9601) was up 3%. On the other side, Cosmo Energy (5021) was down 11%, Sumco (3436) was down 7% and SHIMAMURA (8227) was down 6%.

Summary

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What Worked Asia - 19 Aug 2016 - Value worked in HK/China with a slight selloff in Size

What Worked – Value was strong in China with a slight selloff in size this week. Low PE names that did well were Fufeng Group up 19% and Huadian Fuxin Energy up 12%. In Hong Kong, Value also did well but to a lesser degree. In Hong Kong, Nexteer Automotive was up 38% and APT Satellite was up 21%. In South Korea, Beta did well and ROE was hurt this week. Vieworks was up 9% and Emerson Pacific was up 8%. High ROE names that were hurt were Hanatour Service was down 7% and It’S Skin was down 7%.

In Taiwan there was a slight selloff in Size this week. Synnex Technology was down 6% and Simplo Technology was down 5%. In India Beta and PBR were strong this week. High Beta names that did well were NCC Limited up 10% and Edelweiss Financial Services up 9%. In Malaysia, PBR did well and high ROE/ROIC names were hurt this week. High ROE names that were down were Bursa Malaysia down 5% and Berjaya Auto also down 5%.

Who Moved – 227 names moved on volume this week. A good portion of those names spiked in the Financial and Electronic Technology Sectors. At the Country level, Hong Kong /  China dominated the volume spikes this week. On the positive side, Jubliant Life Sciences was up 32%, Bank Mayapada Internasional was up 28% and Hugel was up 25%. On the other side, Orion Corp was down 17%, China State Construction International was down 17% and Chularat Hospital was down 13%.

Summary

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What Worked Japan - 19 Aug 2016 - After weeks of weak but positive returns, strong moves in Value and Beta

What Worked – Strong move in Value and Beta this week. Value has done well over the last 3 weeks, but this week it really spiked up. PBR came in with an IC of 42%, followed by Dividend yield with an IC of  38%. Low PBR names that did well this week were Inpex Corp (1605) up 11%, Yokohama Rubber (5101) up 11% and Resona Holdings (8308) up 8%. High Beta names also did really well this week.

Beta has followed the same pattern as Value recently. Very strong in the beginning of July followed by positive but weak returns in the following weeks then a good spike up this week. Beta came in with an IC of 49%. High Beta names that did well were SUMCO (3436) up 13%, Unipres (5949) up 9% and Zeon (4205) up 8% this week. On the other side, high ROIC/ROE names were hurt this week. Iida Group (3291) was down 13%, Santen Pharma (4536) was down 13% and HOSHIZAKI (6465) was down 12%.

Who Moved – Only 23 names moved on volume this week. On the positive side, Toyo Tire & Rubber (5105) was up 7%, Hikari Tsushin (9435) was up 6% and Shimadzu Corp (7701) was up 6%. On the other side, Hokuetsu Kishu Paper (3865) was down 14%, Iida Group was down 13% and Shikoku Electric Power (9507) was down 11%. All moved on strong volume.

Summary

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End of 1Q FY3/17 Earnings Summary - Full-year Consensus numbers still a lot more bullish than Guidance

If we look at the 1Q Aggregate numbers, which Sectors are best and worst positioned for the rest of the year? On the positive side, names in the Information and Communication sector achieved 30% of the aggregate OP guidance. Toho (9602) achieved 39% of full-year OP and KONAMI (9766) achieved 36% of its full-year OP guidance. The Pharmaceutical Sector achieved 40% of its aggregate OP. Takeda Pharma (4502) has already achieved 113% of its full-year OP guidance and Eisai (4523) has already achieved 48% of full-year OP guidance. Transportation Equipment achieved 32% of full-year OP guidance. Honda (7267) is at the top with 45% of OP guidance achieved, followed by Toyota Motors (7203) with 38% achieved.

On the other side, only 18% of aggregate OP was achieved in the Machinery Sector. Sankyo (6417) has a negative 16% achieved and Ebara (6361) is basically at nothing achieved. Electronic Appliances companies were only able to achieve 18% of full-year OP guidance. NEC (6701) OP came in at negative 30¥bn OP so that is not a good start for them. Fujitsu (6702) is not much better losing 11¥bn at the OP level in the first quarter. Other Sectors that are not off to a good start are Construction with only 17% of full-year OP achieved, Nonferrous Metals with only 18% achieved and Oil & Coal Products with only 15% of full-year OP guidance achieved.

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What Worked Asia - 12 Aug 2016 - Size domintated a little and Quality was hurt this week

What Worked – In China there was a pretty good move into Size this week. Credit China Holdings was up 21% and Semiconductor Manufacturing was up 19%. In Hong Kong it was all about Beta and to a lesser degree Value. Guotai Junan International was up 15% and Shanghai Industrial Holdings was up 13%. In South Korea there was a huge reversal in momentum names, particularly 1-month momentum.  Names that were down over the last month bounced back this week. Yungin Pharm was up 11% and CJ E & M was up 13% this week.

In Singapore there was also a slight move into Size this week. Sinarmas Land Limited was up 8% and Delfi Limited was up 2%. India saw a move into Quality names and away from high beta names. Bombay Burmah Trading was up 19% and Sundram Fasteners was up 22%. Taiwan also saw a slight move into large cap names and a move away from quality. Formosa Petrochemical was up 10% and PChome Online was up 7%. In the Philippines, names with positive EPS revisions did not do well this week. 

Who Moved

260 names moved on volume this week. At the sector level, Consumer Non-Durables and Health Technology picked up a good number of volume spikes. On the positive side, Oishi Group Public was up 29%, Merry Electronics was up 18% and Bombay Burmah Trading was up 19%. On the other side, Phison Electronics was down 15% and Grasim Industries was down 14% and Inox Wind was down 13%.

Summary

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What Worked Japan - 12 Aug 2016 - Nothing really. Stuck between Earnings Ending and O-Bon starting

What Worked – Nothing stood out this week except Beta. This is one of those weeks we have come to expect during Earnings season and or during a Holiday. Although this one came at the end of Earnings season and right before O-Bon. High Beta names that did well this week were Brothers Industries (6448) up 28%, Toyo Tire & Rubber (5105) up 25% and DeNA Co (2432) up 21%. All the other factors were basically insignificant.

Who Moved – Despite the lack of conviction in factors, there were still 16 names that moved on volume this week. This is compared to 108 names that moved on volume last week. On the positive side, Brother Industries (6448) was up 28%, COSMOS Pharmaceutical (3349) was up 10% and Sumitomo Warehouse (9303) was up 7%. On the other side, ONO Pharma (4528) was down 15%, Sawai Pharma (4555) was down 8% and Daifuku Co (6383) was down 7%.

Summary

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What Worked Japan - 05 Aug 2016 - Crazy volume this week as factors move at the extremes

What Worked – Usually during Earning season factors stop working and it is pretty boring. However that is not the case this season and the movements are happening at the extremes and on volume. If you look at the Quintile spreads (top 20% - bottom 20%) you can really see the movements this week. There was a good selloff in names that were up over the last 12 months. The quintile spread is negative 4%. Miura (6005) was down 16%, Morinaga Milk (2264) was down 9% and MEGMILK SNOW BRAND (2270) was down 11%.

High Beta names did well this week with a quintile spread of 3%. Mitsubishi Corp (8058) was up 11%, Mitsubishi UFJ Lease (8593) was up 7% and Rohm (6963) was up 7% this week. Value, particularly high dividend yield and low PBR, also did well this week.  Chiba Bank (8331) was up 6%, Mitsubishi Gas Chemical (4182) was up 5% and Jafco (8595) was up 3%. However, high ROE names saw a pretty good sell off this week. TOTO (5332) was down 16% and Meiji Holdings (2269) was down 13%.

Who Moved – Crazy volume this week. 108 names moved on volume. That is good number of volume spikes for any week and an insane number for Earnings season. 20% of TOPIX 500 moved on volume this week and a third of those were in the Banks. On the positive side, Glory (6457) was up 16%, Familymart (8028) was up 15% and UNY Group0 (8270) was up 15% on strong volume. On the negative side, Nihon Kohden (6849) was down 18%, Ushio (6925) was down 16% and San-in Godo Bank (8381) was down 15%.

Summary

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What Worked Asia - 29 Jul 2016 - Selloff in Value in Korea but nothing really stood

What Worked – Nothing really stood out in China /  Hong Kong. However there was a slight move into size in Hong Kong. Goldin Properties Holdings was up 20% and Wang On Properties was up 13%. Dividend Yield continues to drive the market in Singapore. High dividend yield names have done well in Singapore since the beginning of June. This week Sheng Siong Group was up 5% and Mapletree Industrial Trust was up 5%.

Korea was all about Value this week. Low PBR names that did well were Hyundai Heavy Industries up 17% and Hyundai Mipo Dockyard up 11% this week. In Taiwan there was a good rotation away from low PBR names and into positive EPS revision names. Walsin Technology is up 17% and Realtek Semiconductor is up 7%. 

Who Moved – 204 names moved on volume this week. A good number of the volume spikes came in Taiwan and India. At the Sector level, the Finance and Process Industries Sectors had a number of volume spikes. On the positive side, Jindal Steel & Power was up 23%, Bank Pembangunan Daerah Jawa Barat dan Banten was up 23% and Bangkok Expressway and Metro Public was up 22%. On the other side, Dr. Reddy’s Laboratories was down 18%, Hansae Co was down 13% and Gudang Garam was down 11%.

Summary

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