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

<ul>
<li>RHB Bank is our Malaysian bank top pick, with its real turnaround potential for returns; CIMB remains a buy but is less compelling than RHB given its marked re-rating year-to-date</li>
<li>Our new buy RHB Bank is stand-out value versus its Malaysian peers and it is improving returns from low levels; its main delinquency challenges are concentrated in small overseas portfolios</li>
<li>We reiterate our buy on CIMB; management continues to drive credit quality with cost of risk improvements, and we see potential for operating efficiency gains, combined with its attractive valuations</li>
</ul>


RHB Bank is our Malaysian bank top pick, with its real turnaround potential for returns; CIMB remains a buy but is less compelling than RHB given its marked re-rating year-to-date
Our new buy RHB Bank is stand-out value versus its Malaysian peers and it is improving returns from low levels; its main delinquency challenges are concentrated in small overseas portfolios
We reiterate our buy on CIMB; management continues to drive credit quality with cost of risk improvements, and we see potential for operating efficiency gains, combined with its attractive valuations


Malaysian Banks Screen; RHB Bank Upgraded to a Buy, Alongside Existing Buy on CIMB

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>The WisdomTree Emerging Markets High Dividend Index is a fundamentally weighted index that measures the performance of high dividend yield stocks within emerging markets.</li>
<li>The changes at the October rebalance were announced after market close on 4 October with implementation scheduled at the close on 16 October.</li>
<li>There are 241 adds and 208 deletes for the index with an estimated round-trip trade of US$2.5bn. There are many stocks with over 2x ADV to trade.</li>
</ul>


The WisdomTree Emerging Markets High Dividend Index is a fundamentally weighted index that measures the performance of high dividend yield stocks within emerging markets.
The changes at the October rebalance were announced after market close on 4 October with implementation scheduled at the close on 16 October.
There are 241 adds and 208 deletes for the index with an estimated round-trip trade of US$2.5bn. There are many stocks with over 2x ADV to trade.


WisdomTree Emerging Markets High Dividend Index Rebalance: US$2.5bn Round-Trip Trade

<ul>
<li>Of the six Malaysian banks screened, we keep value play CIMB, whose share price has positive momentum, and quality play Maybank on the buy list</li>
<li>Value pick CIMB has undemanding valuations whilst second from top in post-provision profitability; it has strong capital adequacy and its cost of risk is now more in line with peers</li>
<li>Quality pick Maybank also has relatively undemanding PE multiples and PBV ratio, as well as strong balance sheet credentials and improving returns</li>
</ul>


Of the six Malaysian banks screened, we keep value play CIMB, whose share price has positive momentum, and quality play Maybank on the buy list
Value pick CIMB has undemanding valuations whilst second from top in post-provision profitability; it has strong capital adequacy and its cost of risk is now more in line with peers
Quality pick Maybank also has relatively undemanding PE multiples and PBV ratio, as well as strong balance sheet credentials and improving returns


Malaysian Banks Screener; Stick with Value Pick CIMB and Maybank as the Quality Pick

<ul>
<li>Of the six Malaysian banks screened, we keep quality play Maybank on the buy list and switch our prior buy RHB for CIMB</li>
<li>CIMB is our value pick for its undemanding PE and PBV whilst second from top in post-provision profitability; its credit quality is improving, a positive trend we expect will continue</li>
<li>We maintain quality pick Maybank as a buy for its relatively undemanding valuations, and strong balance sheet credentials in terms of credit quality and capital adequacy</li>
</ul>


Of the six Malaysian banks screened, we keep quality play Maybank on the buy list and switch our prior buy RHB for CIMB
CIMB is our value pick for its undemanding PE and PBV whilst second from top in post-provision profitability; its credit quality is improving, a positive trend we expect will continue
We maintain quality pick Maybank as a buy for its relatively undemanding valuations, and strong balance sheet credentials in terms of credit quality and capital adequacy


Malaysian Banks Screener; Value Pick CIMB Has Momentum, Maybank Is the Quality Pick

Thematic (Sector/Industry)

<ul>
<li>Among the large-cap EM Asia banks, we recommend CCB in China, HDFC Bank in India, Bank Mandiri in Indonesia and Hana Financial in South Korea</li>
<li>In LatAm, we turn positive on Banco do Brasil, for its big value attributes and lesser political risk; we turn cautious on Bradesco and stay cautious on Banorte in Mexico</li>
<li>Two large-cap names to watch are Credicorp in Peru and Standard Bank of South Africa; both have challenging macro-economic backdrops but sound “bottom up” credentials</li>
</ul>


Among the large-cap EM Asia banks, we recommend CCB in China, HDFC Bank in India, Bank Mandiri in Indonesia and Hana Financial in South Korea
In LatAm, we turn positive on Banco do Brasil, for its big value attributes and lesser political risk; we turn cautious on Bradesco and stay cautious on Banorte in Mexico
Two large-cap names to watch are Credicorp in Peru and Standard Bank of South Africa; both have challenging macro-economic backdrops but sound “bottom up” credentials


Large Cap GEM Bank Screener - Our Top Picks

Malaysia

Public Bank Berhad provides a range of banking and financial services which include leasing and factoring, stock and futures broking, financing for the purchase of licensed public vehicles, and other financial services. The Group's overseas operations include branches in Hong Kong, Sri Lanka, Laos, Cambodia, and Vietnam.

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Public Bank (PBK MK)

Malaysian Banks Screen; RHB Bank Upgraded to a Buy, Alongside Existing Buy on CIMB

RHB Bank is our top pick in Malaysian banks for its value attributes with strong turnaround potential, while CIMB remains the quality buy even...

Victor Galliano

WisdomTree Emerging Markets High Dividend Index Rebalance: US$2.5bn Round-Trip Trade

There are 241 adds/208 deletes for the WisdomTree Emerging Markets High Dividend Index. The round-trip trade is around US$2.5bn and there are a...

Brian Freitas

Malaysian Banks Screener; Stick with Value Pick CIMB and Maybank as the Quality Pick

Value play CIMB and quality play Maybank are top picks among Malaysian banks, both with strong financials and positive momentum in share price....

Victor Galliano

Malaysian Banks Screener; Value Pick CIMB Has Momentum, Maybank Is the Quality Pick

Maybank remains the quality buy, with its strong balance sheet; CIMB replaces RHB Bank as the new value pick given CIMB's improving credit quality...

Victor Galliano

Large Cap GEM Bank Screener - Our Top Picks

In EM Asia, we like CCB, HDFC Bank, Mandiri & Hana; in LatAm, we turn positive on Banco do Brasil, go cautious on Bradesco & remain cautious on...

Victor Galliano

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Malaysian Banks Screen; RHB Bank Upgraded to a Buy, Alongside Existing Buy on CIMB

​RHB Bank is our top pick in Malaysian banks for its value attributes with strong turnaround potential, while CIMB remains the quality buy even...

Victor Galliano

WisdomTree Emerging Markets High Dividend Index Rebalance: US$2.5bn Round-Trip Trade

There are 241 adds/208 deletes for the WisdomTree Emerging Markets High Dividend Index. The round-trip trade is around US$2.5bn and there are a...

Brian Freitas

Malaysian Banks Screener; Stick with Value Pick CIMB and Maybank as the Quality Pick

​Value play CIMB and quality play Maybank are top picks among Malaysian banks, both with strong financials and positive momentum in share price....

Victor Galliano

Malaysian Banks Screener; Value Pick CIMB Has Momentum, Maybank Is the Quality Pick

​Maybank remains the quality buy, with its strong balance sheet; CIMB replaces RHB Bank as the new value pick given CIMB's improving credit quality...

Victor Galliano

Large Cap GEM Bank Screener - Our Top Picks

In EM Asia, we like CCB, HDFC Bank, Mandiri & Hana; in LatAm, we turn positive on Banco do Brasil, go cautious on Bradesco & remain cautious on...

Victor Galliano

RHB Bank is our top pick in Malaysian banks for its value attributes with strong turnaround potential, while CIMB remains the quality buy even...

Value play CIMB and quality play Maybank are top picks among Malaysian banks, both with strong financials and positive momentum in share price....

Maybank remains the quality buy, with its strong balance sheet; CIMB replaces RHB Bank as the new value pick given CIMB's improving credit quality...