The Must Read PSA Weekly Research Round-up (week to 18 May)

The PSA Must Read Weekly Research Round-Up: Reports published this week on SBI Holdings (8473 JP) / Fanuc (6954 JP) / What now for Video Game Stocks / Julie Boote expects another tough year for Nissan (7201 JP) / Pelham Smithers looks at the 5G Antenna market and how it could help Murata (6981 JP) – (week to May 18)

The Weekly Comment by Pelham Smithers

During the 2000s, gold has been a pretty good lead indicator of US monetary policy, with the price of gold moving two years ahead of changes to US monetary base (see chart below). While not a perfect indicator of the “value of the dollar”, in these times of a monetary race to the bottom, it is a pretty good one. If gold is right, then we are not looking for any let up in US monetary base tightening any time soon. Now, it is worth noting that US monetary base is actually declining at present and has been since 2015, with a small blip in 1H 2017 when there was nervousness over the impact of the Trump presidency. Gold would have this continuing for at least another two years. This makes sense in terms of broader liquidity and inflation. Although it is slowing, M1 is still up 6.5% YoY, so there is still some way to go before that indicator normalizes……..

Reports / Flash Notes Published This Week: Headlines at a Glance

1. SBI Holdings (8473 JP): Switching Earnings Focus from Broking to Asset Management
2. Fanuc (6954 JP): China Robotics and Non-China FA to Boost Earnings

Company / Sector / Thematic Comments at a Glance

Technology: Consumer Electronics, Gaming

1. What Now for Video Game Stocks?
2. eSports Selected for 2018 Asian Games
3. Nintendo (7974 JP) Making eSports Push with Smash Bros for Switch
4. Panasonic (6752 JP) Showing Understandable Lack of Commitment to Chinese Tesla Factory
5. Sony (6758 JP): Buys into Peanuts Brand and Announces Layoffs at Sony Pictures

Technology: Electronic Components and Precision

6. Might Murata’s (6981 JP) MetroCirc be Core to the 5G Antenna Market?
7. Toshiba (6502 JP) FY17 Results / China Approves Memory Sale
8. Fujifilm (4901 JP) / Xerox (XRX US) Deal Off

Technology: Cryptocurrency / Bit Coin / Blockchain

9. Cryptocurrency Stocks to the Fore

Autos

10. Little Enthusiasm for Truck Makers
11. Nissan (7201 JP) Expects Further Profit Decline Despite Low Base of Comparison

Auto Parts / Machinery

12. Automation / Smartphone-Plays Bounce
13. SMC (6273 JP): Strong FY17 and Continued FY18 Uptrend / Can SMC Sustain the Record OPMs?
14. Position Building in NOK (7240 JP)

Telecomms

15. IIJ (3774 JP) Delivers Highest OP Since FY12
16. Recruit (6098 JP) Beats Guidance
17. DeNA (2432 JP) Guides for Further Earnings Deterioration
18. mixi (2121 JP) to Invest ¥100bil over the Next Few Years
19. Kakaku.com (2371 JP): FY17 Results Missed Guidance

Pharmaceuticals

20. Takeda (4502 JP) Forecasts Earnings Decline
21. Cyberdyne (7779 JP): Arithmetic Progression, When Exponential Progression Expected / Needed

Miscellaneous

22. FY17 Results Season Overview
23. Japan GDP Negative in 1Q

PSA Company Visits, Tours and Interviews

• Visited Teijin (3401 JP), Kaneka (4118 JP)
• Attended earnings meetings at Sumitomo Dainippon Pharma (4506 JP), Sumitomo Bakelite (4203 JP), Konica Minolta (4902 JP), Central Glass (4044 JP), Kuraray (3405 JP), Mitsui Chemicals (4183 JP), Japan Display (6740 JP), Sumitomo Chemical (4005 JP), Fujifilm Holdings (4901 JP), Tosoh (4042 JP), Fujimi (5384 JP), SMC (6273 JP), GS Yuasa (6674 JP), Lifenet (7157 JP), Netyear (3622 JP), Kureha (4023 JP), Daifuku (6383 JP)
• Attended information meetings at Kaneka (4118), JSR (4185 JP), Taiyo Nippon Sanso (4091 JP), Sumitomo Metal Mining (5713 JP), TDK (6762 JP)

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