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>The six Malaysian banks screen favourably on balance sheet and returns metrics to June 2022; we add CIMB to the buy list, keep RHB and we remove Maybank</li>
<li>We add CIMB with its positive post-provision return trends and further potential which combine constructively with CIMB’s undemanding valuations versus the peer group; its high NPL ratio is fully provisioned</li>
<li>We stick with RHB, with its attractive post-provision profitability and positive cost of risk trends, whilst also trading on attractive multiples versus peers and on a relatively low PEG</li>
</ul>


The six Malaysian banks screen favourably on balance sheet and returns metrics to June 2022; we add CIMB to the buy list, keep RHB and we remove Maybank
We add CIMB with its positive post-provision return trends and further potential which combine constructively with CIMB’s undemanding valuations versus the peer group; its high NPL ratio is fully provisioned
We stick with RHB, with its attractive post-provision profitability and positive cost of risk trends, whilst also trading on attractive multiples versus peers and on a relatively low PEG


Malaysian Banks June 2022 Screener; CIMB Is Our New Value Pick

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>Regional rebalance occurring among active EM funds. Out of EMEA and the major Asian nations and in to ASEAN, MENA and South America.</li>
<li>ASEAN reversal shows EM investors moving from underweight to overweight since late 2021, driven by a record ownership and a rising number of funds positioned overweight the benchmark.</li>
<li>Indonesia and Thailand the key drivers and to a lesser extent Malaysia.   The Philippines has been notably absent from the move higher, whilst Singapore allocations fell over the same period.</li>
</ul>


Regional rebalance occurring among active EM funds. Out of EMEA and the major Asian nations and in to ASEAN, MENA and South America.
ASEAN reversal shows EM investors moving from underweight to overweight since late 2021, driven by a record ownership and a rising number of funds positioned overweight the benchmark.
Indonesia and Thailand the key drivers and to a lesser extent Malaysia.   The Philippines has been notably absent from the move higher, whilst Singapore allocations fell over the same period.


<ul>
<li>As concerns over China persist, Asia Ex-Japan managers are becoming more constructive on the ASEAN Region and appear amenable to increasing allocations.</li>
<li>Indonesia and Singapore are the largest country allocations, Indonesia/Vietnam the key overweights and Malaysia/Thailand the key underweights. Only 20.4% of managers have any Malaysia exposure at all.</li>
<li>Sea Ltd and Bank Central Asia are the key overweights in the region.  Recent activity has favoured Cisarua Mountain Dairy, Central Pattana Pub and Telekomunikasi Indonesia.</li>
</ul>


As concerns over China persist, Asia Ex-Japan managers are becoming more constructive on the ASEAN Region and appear amenable to increasing allocations.
Indonesia and Singapore are the largest country allocations, Indonesia/Vietnam the key overweights and Malaysia/Thailand the key underweights. Only 20.4% of managers have any Malaysia exposure at all.
Sea Ltd and Bank Central Asia are the key overweights in the region.  Recent activity has favoured Cisarua Mountain Dairy, Central Pattana Pub and Telekomunikasi Indonesia.


ASEAN Reversal.  Asia Ex-Japan Managers Raise Allocations

Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

<ul>
<li>Maybank reported 4Q21 NPAT of MYR 2.1 bn, improving MYR 372 mn (22.1%) linked quarter, reflecting revenue improvement across the board and a provision cut; </li>
<li>Net new NPLs aggregate MYR 2.3 bn, intimates an 83.4% QOQ increase in problem loans on an annualized basis; and  </li>
<li>Maybank was less than aggressive provisioning, and now an MYR 8.0 bn reserve shortfall exists today in its loan loss reserve or three quarters of NPAT. </li>
</ul>


Maybank reported 4Q21 NPAT of MYR 2.1 bn, improving MYR 372 mn (22.1%) linked quarter, reflecting revenue improvement across the board and a provision cut; 
Net new NPLs aggregate MYR 2.3 bn, intimates an 83.4% QOQ increase in problem loans on an annualized basis; and  
Maybank was less than aggressive provisioning, and now an MYR 8.0 bn reserve shortfall exists today in its loan loss reserve or three quarters of NPAT. 


Malayan Banking – Heightened Credit Risk

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>CTOS Digital (CTOS) raised around US$291m in its Malaysian IPO in Jul 2021. It is majority owned by Creador, a PE firm.</li>
<li>The stock has done well since listing and is now trading 72% above its IPO price. </li>
<li>In this note, we talk about the updates since listing and the upcoming lock-up expiry.</li>
</ul>


CTOS Digital (CTOS) raised around US$291m in its Malaysian IPO in Jul 2021. It is majority owned by Creador, a PE firm.
The stock has done well since listing and is now trading 72% above its IPO price. 
In this note, we talk about the updates since listing and the upcoming lock-up expiry.


CTOS Digital Lock-Up Expiry:High Chance of Slow Motion Creador Exit but There Should Be Ample Buyers

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 June 2022 Screener; CIMB Is Our New Value Pick

We add CIMB to the buy list, keep RHB and we remove Maybank; CIMB has positive post-provision return trends and undemanding valuations; RHB has...

Victor Galliano

EM Funds Raise ASEAN Allocations

Regional rebalance occurring among active EM funds. Out of EMEA and the major Asian nations and in to ASEAN, MENA and South America.

Steven Holden

ASEAN Reversal. Asia Ex-Japan Managers Raise Allocations

As concerns over China persist, Asia Ex-Japan managers are becoming more constructive on the ASEAN Region and appear amenable to increasing...

Steven Holden

Malayan Banking – Heightened Credit Risk

MAYBANK: Maybank reported QOQ 4Q21 NPAT increase of 22.1%, reflecting revenue improvement and a provision cut. NPLs accelerated while reserves...

Thomas J. Monaco

CTOS Digital Lock-Up Expiry:High Chance of Slow Motion Creador Exit but There Should Be Ample Buyers

CTOS Digital (CTOS) raised around US$291m in its Malaysian IPO in Jul 2021. It is majority owned by Creador, a PE firm. In this note, we talk about...

Sumeet Singh

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52-week Range

Market Cap (USDm)

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