Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

Kyoto Financial Group  / Equity Bottom-Up

<ul>
<li>Kyoto Financial’s president has hinted at increasing disposals in strategic equity holdings; the prior target was a JPY100bn reduction in holdings by March 2029, now there is talk of JPY200-300bn</li>
<li>We estimate Kyoto Financial’s equity holdings relative to market cap at 140%+, well above its peer banks; yet, until very recently, the president had been against meaningfully reducing equity holdings</li>
<li>The president’s change of view leads us to upgrade Kyoto Financial to a buy; the change in outlook means that there is real potential to extract value for shareholders</li>
</ul>


Kyoto Financial’s president has hinted at increasing disposals in strategic equity holdings; the prior target was a JPY100bn reduction in holdings by March 2029, now there is talk of JPY200-300bn
We estimate Kyoto Financial’s equity holdings relative to market cap at 140%+, well above its peer banks; yet, until very recently, the president had been against meaningfully reducing equity holdings
The president’s change of view leads us to upgrade Kyoto Financial to a buy; the change in outlook means that there is real potential to extract value for shareholders


Kyoto Financial Group (TSE:5844) – Positive Shift in C-Suite Outlook

Thematic (Sector/Industry)

<ul>
<li>Global macro hurdles following “liberation day” have hit Japanese banks’ share prices hard; global recession risks are on the rise and BoJ monetary policy normalization is at best delayed</li>
<li>With investors betting on the safe haven of Japanese government bonds, the JGB yield curve has flattened since March-end which adds to the Japanese banks’ hurdles</li>
<li>Despite maintaining our constructive medium to long term view on Japanese banks, we expect challenges in the near-term and we would reduce long exposures to Resona, Mizuho, SMFG and Shizuoka</li>
</ul>


Global macro hurdles following “liberation day” have hit Japanese banks’ share prices hard; global recession risks are on the rise and BoJ monetary policy normalization is at best delayed
With investors betting on the safe haven of Japanese government bonds, the JGB yield curve has flattened since March-end which adds to the Japanese banks’ hurdles
Despite maintaining our constructive medium to long term view on Japanese banks, we expect challenges in the near-term and we would reduce long exposures to Resona, Mizuho, SMFG and Shizuoka


Japanese Big Cap Banks – Trump’s Trade War Headwinds

Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Cross Asset Strategy

<ul>
<li>Act 1 of the US bear market is likely complete, with diverging price signals from stocks, bonds and the dollar.</li>
<li>This will be a rebound bounce to sell into, as we are not going back to previous highs.</li>
<li>Looking at companies servicing high-income consumers is a good hunting ground for shorts.</li>
</ul>


Act 1 of the US bear market is likely complete, with diverging price signals from stocks, bonds and the dollar.
This will be a rebound bounce to sell into, as we are not going back to previous highs.
Looking at companies servicing high-income consumers is a good hunting ground for shorts.


Investors Have that “Oh Sh#t Moment” - Part 2:  Trading Opportunities.

<ul>
<li>Revisiting a sector we have liked for the last 2 years</li>
<li>We discuss current sector dynamics and why they could be  a potential short</li>
<li>Recent positive earning surprises from the banks have not moved the stocks</li>
</ul>


Revisiting a sector we have liked for the last 2 years
We discuss current sector dynamics and why they could be  a potential short
Recent positive earning surprises from the banks have not moved the stocks


Japanese Megabanks – Time to Get Short?

<ul>
<li>Asymmetric return opportunity in a short position in Japan - downside vs upside potential is skewed to the downside.</li>
<li>The weak JPY hasn’t helped the overall market and rising risk of a reversal similar to August 2024</li>
<li>We look at some sectors and stocks that are good short candidates</li>
</ul>


Asymmetric return opportunity in a short position in Japan - downside vs upside potential is skewed to the downside.
The weak JPY hasn’t helped the overall market and rising risk of a reversal similar to August 2024
We look at some sectors and stocks that are good short candidates


Tactical Trading - Time to Sell Japan. Again.

Japan

Sumitomo Mitsui Financial Group, Inc. manages financial operations for its subsidiaries. The Company provides commercial banking and a variety of financial services.

Sumitomo Mitsui Financial Group (8316 JP)

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Sumitomo Mitsui Financial Group (8316 JP)

Kyoto Financial Group (TSE:5844) – Positive Shift in C-Suite Outlook

Kyoto Financial plans to double or triple disposals in equity holdings, which could equate to 40%+ of market cap; we upgrade to a buy rating,...

Victor Galliano

Japanese Big Cap Banks – Trump’s Trade War Headwinds

Trade war means rising recession risks, delayed BoJ rate hike and flatter JGB yield curve; despite the banks' positive long-term outlook, reduce...

Victor Galliano

Investors Have that “Oh Sh#t Moment” - Part 2: Trading Opportunities.

US bear market Act 1 likely over, rebound is a selling opportunity as previous highs won't be reached. High-income consumer companies are good...

Rikki Malik

Japanese Megabanks – Time to Get Short?

From a short-term trading perspective, we would look to cover half our shorts in the sector today as the stocks approach the 200-day Moving...

Rikki Malik

Tactical Trading - Time to Sell Japan. Again.

It's the perfect storm for the Japanese market. Tariffs, JPY, rising rates and inflation, with growth weakening. The 2,800 level on Topix has been...

Rikki Malik

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Kyoto Financial Group (TSE:5844) – Positive Shift in C-Suite Outlook

​Kyoto Financial plans to double or triple disposals in equity holdings, which could equate to 40%+ of market cap; we upgrade to a buy rating,...

Victor Galliano

Japanese Big Cap Banks – Trump’s Trade War Headwinds

Trade war means rising recession risks, delayed BoJ rate hike and flatter JGB yield curve; despite the banks' positive long-term outlook, reduce...

Victor Galliano

Investors Have that “Oh Sh#t Moment” - Part 2: Trading Opportunities.

​US bear market Act 1 likely over, rebound is a selling opportunity as previous highs won't be reached. High-income consumer companies are good...

Rikki Malik

Japanese Megabanks – Time to Get Short?

From a short-term trading perspective, we would look to cover half our shorts in the sector today as the stocks approach the 200-day Moving...

Rikki Malik

Tactical Trading - Time to Sell Japan. Again.

It's the perfect storm for the Japanese market. Tariffs, JPY, rising rates and inflation, with growth weakening. The 2,800 level on Topix has been...

Rikki Malik

Kyoto Financial plans to double or triple disposals in equity holdings, which could equate to 40%+ of market cap; we upgrade to a buy rating,...

US bear market Act 1 likely over, rebound is a selling opportunity as previous highs won't be reached. High-income consumer companies are good...