|Bid||506.90 x 0|
|Ask||508.30 x 0|
|Day's Range||506.40 - 511.10|
|52 Week Range||422.90 - 716.90|
|Beta (3Y Monthly)||1.00|
|PE Ratio (TTM)||13.20|
|Earnings Date||Oct 30, 2019|
|Forward Dividend & Yield||18.00 (3.54%)|
|1y Target Est||730.00|
SK Kim of Daiwa Securities says Samsung's first-quarter earnings could be poor because of weak memory business and slower demand for OLED panels.
SK Kim of Daiwa Securities has a "buy" rating for both SK Hynix and Samsung Electronics, saying the stocks appear cheap compared to their semiconductor peers in the U.S.
(Bloomberg) -- The Bank of Japan made sweeping cuts to bond purchases a day after saying it wants a steeper curve and won’t allow a prolonged decline in yields.Having kept its policy settings unchanged on Thursday, the central bank used its regular operation on Friday to lower buying across three maturity zones by a combined 50 billion yen ($463 million). That’s the first time it has cut purchases in three segments simultaneously since introducing the yield-curve control in 2016.The BOJ is stepping up its fight against lower yields after a global debt rally saw Japan’s 10-year benchmark breach the bottom of its targeted range and slip to the brink of a record low of minus 0.3%. The central bank wouldn’t allow yields to fall for a prolonged period, and it was desirable for the yield curve to steepen a bit, Governor Haruhiko Kuroda said at a news conference Thursday.“Reducing purchases right after Kuroda’s comments on the 10-year and super-long yields Thursday leaves a stronger impression that the BOJ is ready to act even if markets aren’t expecting it,” said Takenobu Nakashima, a senior rates strategist at Nomura Securities Co. in Tokyo.Japan’s yield curve steepened in response to the action. The 10-year yield rose as much as two basis points before being half a basis point higher for the day at minus 0.22% as of 5:27 p.m. in Tokyo. It slid to a three-year low of minus 0.295% on Sept. 4, dropping further out of the BOJ’s targeted band of about 20 basis points above or below zero percent.The 20-year yield increased as much as three basis points while that on 30-year securities climbed as much as 4.5 basis points before paring their advance. The yen was 0.1% higher at 107.93 per dollar.The BOJ’s decision to stay put this week followed rate cuts by the Federal Reserve and the European Central Bank to prop up growth amid a global slowdown. An easing action now looks more likely in October after the BOJ also ordered a review next month.With Friday’s move, the BOJ may have sought to reinforce the impression that its framework of targeting short and long-term rates, including the 10-year yield, is robust and sustainable.The yield curve control policy for stimulating the economy and prices has looked increasingly strained in recent weeks. With yields plunging, some economists have cast doubt on whether the central bank could effectively maintain a floor on the loose trading range of the 10-year yield it permits around its 0% target.“Coming a day after it said it will reexamine conditions next month means the cut in purchases has a message: the BOJ is aiming for a steeper curve,” said Mari Iwashita, chief market economist at Daiwa Securities Co. in Tokyo. “It’s not only the yield levels they are watching.”‘Breathing Room’Long-term rates that fall too much may squeeze profit margins for pension funds and insurers, as well as affect consumer sentiment, Kuroda said on Thursday.Friday’s reduction in purchases of bonds maturing in more than 25 years was the BOJ’s first since April 19. Buying in the key five-to-10 year zone was lowered for the third time in six weeks, while the 10-25 year zone saw purchases being cut the second time this month.The expansive reduction should lend some “breathing room” for the BOJ, said Nakashima of Nomura. “It may not be so aggressive in cutting bond purchases” in coming operations, he said.(Updates prices throughout.)\--With assistance from Brett Miller and Christopher Anstey.To contact the reporter on this story: Chikako Mogi in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Tan Hwee Ann at email@example.com, Shikhar Balwani, Paul JacksonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- It’s rare to be able to say that a Japanese bank is getting something right. It’s even rarer when the institution in question is Nomura Holdings Inc.The jump in trading revenue that drove Nomura’s first profit increase in six quarters contrasts with declines at Wall Street rivals, which have struggled with their fixed-income businesses amid persistent low interest rates since the global financial crisis more than a decade ago. Japan’s biggest brokerage was profitable in all three of its overseas markets – Europe, Asia outside Japan, and the U.S. – in a sign that repeated waves of cost-cutting are finally bearing fruit.That offers some respite for Chief Executive Officer Koji Nagai, who won reappointment to the board last month by the narrowest margin of his seven-year reign. Scrutiny of Nagai has intensified after Nomura’s first fiscal-year loss in a decade and an information leak at a research affiliate led to regulatory penalties. The brokerage’s shares rose as much as 9.8% on Thursday morning in Tokyo.Nomura said it’s halfway through plans announced in April to slash $1 billion of costs. These have fallen heavily on Europe, with Nagai at the same time beefing up Nomura’s operations in the U.S. The June quarter results vindicated that strategy, as U.S. mortgage bond trading picked up. The brokerage has cut 629 employees since June last year, 255 of them in Europe.The contrast with Wall Street is stark. Trading revenue at the five biggest U.S. investment banks, including JPMorgan Chase & Co., dropped 8% in the April-June quarter, following a 14% slide in the first three months. European rivals have done better: An upturn in bond trading helped spur improved results at Credit Suisse Group AG and BNP Paribas SA this week.Some caution is warranted. This quarter was free of legal issues that beset Nomura in the year-earlier period, flattering the comparison. And crucially, its home market shows few signs of improving. Japanese investors aren’t trading much, with the firm’s brokerage fees and commissions dropping 14% in the three months through June. Daiwa Securities Group Inc., with a smaller overseas business, posted a 13% drop in fiscal first-quarter profit.Nomura also faces a looming demographic challenge. Its high-net worth client base, while Japan’s most affluent, is also probably also the oldest, according to Morningstar analyst Michael Makdad. Nagai’s challenge will to be to draw in younger customers while keeping free of scandals such as last month’s Nomura Research Institute leak, which cost the firm many big deals.For now, though, the brokerage at least looks to be on the right track. To contact the author of this story: Nisha Gopalan at firstname.lastname@example.orgTo contact the editor responsible for this story: Matthew Brooker at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- SoftBank Group Corp.’s founder Masayoshi Son unveiled a second enormous fund for technology investments, seeking to keep his place as the most influential investor in the industry.The Japanese conglomerate aims to raise a total of $108 billion for the second Vision Fund, which would make it even larger than the first, unprecedented $100 billion effort. SoftBank is also taking more control this time around, committing $38 billion in capital itself and replacing Saudi Arabia as the largest investor. Saudi Arabia’s Public Investment Fund, which chipped in $45 billion for the initial effort, was not mentioned in the announcement Friday.SoftBank said the second fund is expected to collect money from Apple Inc., Microsoft Corp., Foxconn Technology Group and the sovereign wealth fund of Kazakhstan. Son also won broad support from Japanese financial institutions with seven identified as signing memorandums of understanding to participate.Son is aiming to raise a new massive fund every two or three years to take advantage of opportunities he sees in cutting-edge technologies such as artificial intelligence and autonomous driving. SoftBank in June disclosed the initial Vision Fund had earned 62% returns so far after investing $64.2 billion in 71 deals.“I wasn’t sure it would be possible to raise $100 billion without Saudi money, but it looks like it is,” said Chris Lane, an analyst with Sanford C. Bernstein & Co. “I think it was a conscious decision by SoftBank to decrease the influence of the Saudis.”Saudi Arabia and Crown Prince Mohammed bin Salman came under fire last year after the murder of journalist Jamal Khashoggi in a Saudi consulate in Istanbul. While Saudi officials have said the killing was carried out by rogue agents and have denied that the prince had any knowledge of their plan, U.S. politicians continue to press for further action in the case.“I think Masa personally was quite horrified by what happened,” said Lane.Saudi Arabia’s PIF and Mubadala Investment Co., both key partners in the first fund, are still in talks about possible investments, said Daisuke Sawatake, a SoftBank spokesman.The Japanese financial firms that have signed MOUs are Mizuho Financial Group Inc., Sumitomo Mitsui Financial Group Inc., Mitsubishi UFJ Financial Group Inc., Dai-ichi Life Holdings Inc., Sumitomo Mitsui Trust Holdings Inc., Daiwa Securities Group Inc., and SMBC Nikko Securities Inc. Other contributors will include Standard Chartered Plc, an unnamed Taiwanese investor and the fund’s management, according to the release.Satoru Kikuchi, an analyst at SMBC Nikko Securities in Tokyo, wrote in a research report that the broader group of investors and SoftBank’s contribution will grant the Japanese company more influence. Kikuchi also wrote that SoftBank may sell stakes in Alibaba Group Holding Ltd. and Sprint Corp. to pay for its investment in the second vehicle.The original Vision Fund was announced in October 2016, but took another seven months for its first major closing. Saudi Arabia was the biggest investor with its $45 billion contribution, followed by SoftBank’s $28 billion and $15 billion from Mubadala, the Abu Dhabi wealth fund. Investors also included Qualcomm Inc. and Sharp Corp. The Saudis’ stake allowed them to act as something of a constraint on Son’s power at the original fund.Amir Anvarzadeh, strategist at Asymmetric Advisors, wrote in a research note that Saudi Arabia and Mubadala may not have yet committed to the second Vision Fund for simple business reasons: They may be leery of committing as much capital as last time because of Son’s appetite for enormous risk. In one example, Son briefly considered putting $16 billion into WeWork on top of an existing $8 billion investment -- an unheard of concentration for a single deal -- before deciding to add only $2 billion.After decades of building his telecom empire, the 61-year-old is spending more time on investing. He has handed over the day-to-day management of SoftBank’s domestic telecom operations, a cash-cow division that went public in December, to his long-term lieutenant Ken Miyauchi. He has also engineered the sale of his Sprint wireless business to T-Mobile US Inc., a deal that is pending regulatory approval in the U.S.In May, Son declared he is now spending the vast majority of this time on deals. “My heart and mind are full of energy for the Vision Fund, taking up 97% of my brain,” he said.SoftBank shares have climbed 55% this year, including a 1.1% gain on Friday.One question is whether Son will be able to keep up the pace and scale of investments. The first fund targeted stakes of over $100 million, in just two years amassing a portfolio of 82 leading technology companies, including Uber Technologies Inc. and WeWork Cos. Ride-hailing is the single biggest segment, including stakes in China’s Didi Chuxing, India’s Ola and Singapore’s Grab.According to data from market researcher CB Insights, SoftBank Group was an investor in 24 of 377 global unicorns, startups valued over $1 billion. While several of its portfolio companies -- Uber and Slack Technologies Inc. -- have gone public, profitable exits for many others might still be years away.Anvarzadeh is skeptical of SoftBank’s knack for making multi-billion investments in private tech companies before they try to go public. Venture firms in Silicon Valley historically have avoided such outsized bets for fear of driving up valuations and seeing returns tumble.“Softbank’s strategy of bulking up and using its size to muscle into buying big stakes in late stage start-ups and unicorns depends on the IPO boom in loss-making firms to continue while it continues to raise the value of its existing unlisted holdings by simply providing a next round of financing at higher levels,” he wrote.On Friday, S&P Global Ratings warned that SoftBank’s ambitions might hurt its finances. Its “plan to quickly launch a second investment megafund is a manifestation of an extremely aggressive growth strategy and underlying financial policy that are likely to continue to restrain its credit quality,” the agency wrote.Lane has argued that investors have underestimated the potential returns from Son’s investment efforts. In an in-depth report earlier this year, he estimated the initial fund’s net present value was $14 billion to $24 billion, assuming returns of 15% to 20%. He said the net present value of the current and future funds could be $50 billion to $85 billion.“The first round of investors were betting on a man and betting on his vision, but the idea hadn’t been tested,” Lane said in an interview. “For the second round of investors, you can see the facts, you can see the returns.”(Updates with analyst comments from fifth paragraph.)\--With assistance from Peter Elstrom.To contact the reporters on this story: Pavel Alpeyev in Tokyo at firstname.lastname@example.org;Takahiko Hyuga in Tokyo at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Asahi Group Holdings Ltd. is already getting a headache from its $11 billion Australian foray.Japan’s biggest brewer, seeking to escape a slow-growing, aging market at home, is buying the Australian assets of Anheuser-Busch InBev NV, which owns iconic but low-priced beers such as Victoria Bitter. To do so, Asahi will double its debt load and issue about 10% more in new shares. That’s becoming a hangover for investors, who lopped $2 billion from the brewer’s market value on Monday.The deal is the latest in an overseas buying spree by Asahi, which picked up Fuller, Smith & Turner Plc’s brewing business for $330 million earlier this year and made a $11 billion push into Europe two years ago. The Japanese brewer, along with Kirin Holdings Co. and Sapporo Holdings Ltd., has seen domestic beer shipments decline for 14 straight years as fewer people reach legal drinking age. To stay ahead of rivals, Asahi now appears to be more willing to weigh down its balance sheet.“The question is whether Asahi can effectively manage the business, while improving profits and cash flows,” said Toshiyasu Ohashi, chief credit analyst at Daiwa Securities Group Inc., who added that Asahi’s credit profile will be hurt as debt grows faster than cash flow. “Can they generate synergies, and can they improve their financials after the deal?”Shares of Asahi dropped 8.9% in Tokyo trading on Monday, the biggest decline since 2011. The stock was up 18% this year before the deal with AB InBev was announced on Friday.Asahi said it’s securing a 1.2 trillion yen ($11.1 billion) bridge loan and selling 200 billion yen worth of shares to pay for AB InBev’s Melbourne-based Carlton & United Breweries. The Japanese brewer is already on the hook for about 1 trillion yen in interest-bearing debt. The company is betting that cash from the Australian business will help pay down debt. The purchase may lift Asahi’s per-share earnings by as much as 20%, according to SMBC Nikko Securities.There are already early signs of concern over Asahi’s creditworthiness. Moody’s Japan placed the company’s ratings on review for downgrade on Monday, saying the deal will “significantly raise Asahi’s financial leverage.” Rating & Investment Information Inc. said it would place the brewer on its rating monitor with a view to downgrading.A representative for Tokyo-based Asahi declined to comment on Monday.The timing of Asahi’s 200 billion yen share sale isn’t ideal, either. That figure represents about a fifth of total equity issued in Japan this year. Companies have issued 1.1 trillion yen of stock so far, down 43% from the same period last year, according to data compiled by Bloomberg.Asahi has been here before. In 2016, it agreed to buy European beers including Peroni, Grolsch and Pilsner Urquell in two transactions from AB InBev for about $11 billion. Since then, the Japanese brewer’s shares have climbed more than 30%, making it easier for Chief Executive Officer Akiyoshi Koji to justify the latest deal to shareholders.What Bloomberg Opinion Says“Asahi is paying a hefty price, almost 15 times the business’s $760 million of Ebitda in 2018. By comparison, Asahi, Kirin Holdings Co. Ltd. and Sapporo Holdings Ltd. trade on an average of about 11 times.”Andrea Felsted, consumer and retail columnistClick here to read the pieceAsahi said the Carlton purchase would give it greater access to distribution across the Australian market, letting it cross-sell its own brands, including Super Dry and Peroni. “Australia is an attractive market enjoying sustainable economic growth,” the brewer said in a statement.Tomonobu Tsunoyama, an analyst at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo, agreed. “It’s a mature market, but in terms of making money from premium brands, Australia is very similar to eastern Europe,” he said.Even so, total beer consumption in Australia has more than halved in the past four decades, to 84 liters per person a year, while lower-alcohol brews make up one fifth of the total. With total alcohol consumption declining, InBev had been pushing weaker ales on Australians.“The Australian market is very high margin, but very slow growth,” said Duncan Fox, a Bloomberg Intelligence analyst.Carlton’s portfolio of beers, which account for almost half the Australian market, has something for almost any palate. The collection is built on the 165-year-old Victoria Bitter, still portrayed as the brew of choice for hot and thirsty Aussie laborers, but also includes foreign brands such as Stella Artois and Beck’s. InBev has in recent years added craft beers including 4 Pines, which is made in the Sydney beachside suburb of Manly.Although Carlton fits with Asahi’s long-term strategy, it’s unlikely to deliver benefits beyond the continent, according to Naomi Takagi, an analyst at SMBC Nikko Securities.“The deal is unlikely to lead to expansion in other countries and thus synergies look thin,” Takagi wrote in a research note.(Updates shares, Australian market figures.)\--With assistance from Shiho Takezawa, Angus Whitley and Takashi Nakamichi.To contact the reporter on this story: Kantaro Komiya in Tokyo at email@example.comTo contact the editors responsible for this story: Rachel Chang at firstname.lastname@example.org, Reed Stevenson, Jeff SutherlandFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Sony is doubling down on the world of startup investment. While Sony launched a fund in 2016, this new vehicle -- which is called Innovation Growth Fund -- has been set up with others. Firstly, it is being run jointly with Daiwa Capital Holdings -- the VC arm of investment bank Daiwa Securities -- and early LPs confirmed include Sumitomo Mitsui Banking Corporation, Osaka Shoko Shinkin Bank and Mitsubishi UFJ Lease & Finance Company Limited.
(Bloomberg) -- Sansan Inc., whose initial public offering on Wednesday was Japan’s biggest this year, plans to prioritize revenue growth rather than profitability in the near future, Chief Financial Officer Muneyuki Hashimoto said in an interview.Sansan, which scans business cards so that people can discover who within a company knows whom, should be able to increase revenue by 30% and 50% annually, Hashimoto said. Daiwa Securities estimates that sales will rise 37% in the fiscal year ending in May 2020 and will grow 42% the following year.Sansan raised 33.8 billion yen ($315 million) in the IPO, the biggest for a software company in Japan since mobile game maker Gumi Inc. went public in 2014. The shares soared 21% on its first day of trading Wednesday on the Tokyo Stock Exchange, underscoring investor optimism in its prospects. They climbed as much as 4.6% on Friday.“The decision to go public was in part driven by the confidence that we can reach profitability while still continuing to invest,” Hashimoto said. “That’s not far off.”He declined to give a specific timeline, saying the company plans to address the issue during the earnings announcement on July 12. Sansan has forecast an operating loss of 938 million yen for the year that just ended in May, as revenue climbs 38% to 10 billion yen. Daiwa analysts Taro Ishihara and Marina Oyama wrote in a report that the company will turn profitable this fiscal period thanks to a drop in advertising spending.Sansan operates two businesses. The eponymous Sansan unit, serving over 5,700 corporations accounts for more than 90% of its revenue and is profitable. The cloud-based software can generate sales leads, or suggest go-betweens for any business deals by tracking relationships that are forged every time a card changes hands. A service called Eight targets individuals and small companies and has more than 2 million users.“Sansan is the company that created this space,” said Osuke Honda, a general partner at DCM Ventures, an early investor in the company and its biggest outside shareholder. “They are an absolute leader.”The Tokyo-based company dominates the business-card management market in Japan with about 80% share. Rather than chasing a bigger portion of the pie, Hashimoto said the focus is on expanding the market itself. He estimates that for companies with over 1,000 employees about one in 10 is a Sansan customer, but only 1% of their staff make use of the service.“Right now the users are heavily sales staff, secretaries and executives,” Hashimoto said. “To make the service part of the infrastructure we need to get to rank-and-file and reach 10% or 20%.”(Updates with share reaction in third paragraph. An earlier version of this story was corrected to fix the currency conversion in the third paragraph.)To contact the reporters on this story: Pavel Alpeyev in Tokyo at email@example.com;Kazu Hirano in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The dollar drifted higher against the euro and British pound on Monday, supported by the relative strength of the U.S. economy, though moves remained small as many investors were still away for the long Easter weekend. Financial markets in Australia, Hong Kong and many major countries in Europe are closed on Monday for the Easter holiday. "It's better to say that the euro has been weak rather than that the dollar is strong," said Yukio Ishizuki, senior currency strategist at Daiwa Securities.
For Nomura Holdings Inc. and Daiwa Securities Group Inc., it has also left them with a hangover. After mobilizing their sales staff to promote the IPO, Nomura and Daiwa are now trying to get clients back on their side. “While a very wide range of investors participated in the IPO, the stock’s performance has been a disappointment,” Nomura Chief Financial Officer Takumi Kitamura said this week after announcing the firm’s biggest quarterly net loss in almost a decade.
SoftBank’s loan-to-value ratio, its net interest-bearing debt over the value of its investment portfolio, is less than 20 percent, according to separate calculations by Daiwa Securities Group Inc. and SMBC Nikko Securities Inc. The company’s own goal is to keep it under 35 percent, a level that Daiwa considers conservative. SoftBank, which controls the world’s biggest investment vehicle in the almost $100 billion Vision Fund, has been suggesting so-called LTV as a better measure of its leverage since at least mid-2017, when it was included in an earnings presentation.
As few as 630 UK-based finance jobs have been shifted or created overseas in response to the Brexit process, a far lower total than banks said could move after the surprise vote to leave the European Union two years ago. Germany's association of foreign banks expects about 20 banks to expand their presence in Germany as a result of Britain’s decision to leave the European Union. Bank of America (BAC.N) is merging its London-based subsidiary with its Dublin-based Irish entity, which will become its main EU base.
Japan's Nikkei was flat on Friday morning as investors braced for the results of the weekend meeting between the leaders of the United States and China, while the steel sector was dragged down by a brokerage's downgrade. Many investors stayed on the sidelines ahead of the G20 summit in Buenos Aires, where President Donald Trump was due to meet his Chinese counterpart Xi Jinping to discuss trade and other thorny issues. For the week, the Nikkei has gained 3 percent, and it was up 1.7 percent for the month, recouping some of October's 9.1 percent tumble.
Japan's stockbrokers are rubbing their hands ahead of SoftBank's record-breaking $21 billion share sale, banking on the telco's brand power and unprecedented marketing campaign to boost business in a country replete with IPO-hungry investors. The deal's lead underwriters, including Nomura Holdings Inc , Daiwa Securities Group Inc and SMBC Nikko Securities Inc have together launched what is widely believed to be Japan's first TV ads for a private company's initial public offering (IPO). The adverts joke how everyone, from breakfasting families to a humanoid future-predicting plant, is talking about the IPO - the country's largest-ever, and the world's biggest since 2014.