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Semiconductor-related stocks saw buying interest following a pullback the previous week, with the semiconductor index rising 8.05% week-on-week. Semiconductor stocks rallied globally; shares of companies including AMAT, Broadcom, Micron, AMD, Tokyo Electron, and TSMC each climbed by more than 10% over the week.
Meanwhile, shares of NVIDIA—which has been making headlines worldwide—fell 12.75% for the week.
Despite the decline in NVIDIA’s share price, the credit market remains calm; the “T-spread” (the yield differential between corporate bonds and government bonds) has not widened.
In the equity market, while NVIDIA has faced selling pressure, AMD’s share price has risen. However, given that NVIDIA’s revenue is approximately 5.5 times that of AMD, and its operating margin stands at 66.23% compared to AMD’s 21.17%, the disparity in strength is substantial. While capital may be flowing into AMD for the time being, NVIDIA’s share price is likely to see a rebound.
Regarding the highly anticipated Anthropic, the expected IPO price range is $70 to $78, implying a market capitalization of approximately 225 trillion yen. The expectations are simply too high for my taste, so I will not be buying. I believe that investing in recent large-scale IPOs is unlikely to yield the kind of share-price growth seen with companies like Google, Amazon, or Microsoft; the starting valuation is simply too high.
In the U.S., the coming week features several key data releases: October retail sales on the 17th (forecast: 0.2%; previous: 0.8%), October housing starts on the 18th (forecast: 3.2%; previous: -5.2%), and the release of the FOMC meeting minutes on the 19th. Given rising inflation, the market is anticipating an interest rate hike in December.
Regarding Nippon Steel: Conversion prices and share price.
Nippon Steel has issued two series of Euro-yen convertible bonds, with conversion prices set at 704 yen and 710.5 yen, respectively. Although the stock price briefly climbed above 704 yen, it was subsequently pushed back down. While this level does not trigger a conversion, the stock market appears to be mindful of the conversion price. This is because as the stock price approaches the conversion price, the “delta” of the convertible bonds (CBs) increases, leading to larger hedge-related sell positions.
〇 India: Things are looking up
Net foreign buying of Indian stocks has reached its highest level since November 2020—a period followed by a long-term rally in the Indian equity market. Although Indian stocks have performed poorly over the past two years, the likelihood of a turnaround starting next year or beyond has increased. While India’s trade balance remains in deficit, the growth in exports is outpacing that of imports, leading to a gradual improvement in the trade deficit. This may be an early sign that the “Make in India” policy is beginning to yield results.
The market capitalization of the National Stock Exchange of India (NSE) stands at 8.35 trillion yen—3.68 times the size of the Japan Exchange Group (JPX) at 2.266 trillion yen. In terms of revenue (for the most recent quarter), the NSE has also surpassed the JPX.
Among India-focused investment products sold in Japan, some have now recovered to their year-to-date price levels.
〇 Japanese Stocks: Yield spread suggests undervaluation
Japanese stocks—specifically the TOPIX—appear undervalued, with a yield spread of -3.39%.
Within the TOPIX sector indices, the “Textile Products” index saw the strongest gains this week, rising 10.81%, followed by the “Construction” index at 10.41%, and the “Banks” index at 9.18%.
Within the TOPIX Banks index, stocks with a price-to-book ratio (PBR) of less than 1.0x have shown particularly notable gains. Tsukuba Bank has seen a gain of 16.76% with a price-to-book ratio (PBR) of 0.7x; Hyakujushi Bank has recorded a gain of 15.83% with a PBR of 0.83x; and Juroku Financial Group has posted a gain of 15.22% with a PBR of 0.81x.
In Japan, too, rising inflation suggests that interest rate hikes are likely to continue into next year and beyond.
For information on India:
Orion Global Ventures – Orion Global Ventures
Data: Bloomberg
Certified International Investment Analyst (CIIA)
Certified Securities Analysts Association (CMA)
AFP
Tadashi Fujii
投稿者プロフィール
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大学時代から株式投資をはじめ、証券会社のトレーダーとなる。以後、30年
金融畑一筋。専門分野は債券、クレジット。
日本証券アナリスト協会検定会員（CMA）、国際公認投資アナリスト（CIIA)
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