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.

Thematic (Sector/Industry)

<ul>
<li>Norinchukin Bank plans to sell JPY10 trillion of foreign government bonds, crystallising a chunk of the JPY2.19 trillion of unrealized bond losses, as it also looks to raise JPY1.2 trillion</li>
<li>We explore the bigger cap banks’ foreign bond holding and unrealized gains or losses, including those of Japan Post Bank; Norinchukin is clearly the negative outlier of this peer group</li>
<li>We do not see Norinchukin as a canary in the coalmine for the big-caps’ risks on foreign bond exposure; we stick with buys on Resona, Mizuho, SMFG and Concordia</li>
</ul>


Norinchukin Bank plans to sell JPY10 trillion of foreign government bonds, crystallising a chunk of the JPY2.19 trillion of unrealized bond losses, as it also looks to raise JPY1.2 trillion
We explore the bigger cap banks’ foreign bond holding and unrealized gains or losses, including those of Japan Post Bank; Norinchukin is clearly the negative outlier of this peer group
We do not see Norinchukin as a canary in the coalmine for the big-caps’ risks on foreign bond exposure; we stick with buys on Resona, Mizuho, SMFG and Concordia


Norinchukin Bank – Sector Outlier Rather than Big-Cap Bank Canary in the Coalmine

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

Equity Bottom-Up

<ul>
<li>Short term borrowing rose 2.3x in the past four quarters, alongside rising interest rates</li>
<li>During this time, long term borrowings were actually down, so no locking in of low rates</li>
<li>As such, Chiba is not fully, or hardly benefiting from BOJ policy changes, with NIM down</li>
</ul>


Short term borrowing rose 2.3x in the past four quarters, alongside rising interest rates
During this time, long term borrowings were actually down, so no locking in of low rates
As such, Chiba is not fully, or hardly benefiting from BOJ policy changes, with NIM down


Chiba Bank - Short Term Borrowing Surges, Just at the Wrong Time

Sumitomo Mitsui Financial Group / Equity Bottom-Up

<ul>
<li>The continued “higher for longer” interest rates in the US, along with widening JGB yields adds weight to the Bank of Japan potentially raising benchmark rates further</li>
<li>In this report, we expand our coverage of the bigger cap banks’ metrics to include the equity holdings of the top six market caps and the banks’ BoJ deposits</li>
<li>We see further upside for Japanese bank shares, especially those geared into higher domestic rates and with the potential for equity holdings disposals; we like Resona, Mizuho, SMFG and Concordia</li>
</ul>


The continued “higher for longer” interest rates in the US, along with widening JGB yields adds weight to the Bank of Japan potentially raising benchmark rates further
In this report, we expand our coverage of the bigger cap banks’ metrics to include the equity holdings of the top six market caps and the banks’ BoJ deposits
We see further upside for Japanese bank shares, especially those geared into higher domestic rates and with the potential for equity holdings disposals; we like Resona, Mizuho, SMFG and Concordia


Japanese Bigger-Cap Banks – Rates Story Continues, with the Prospect of Equity Holdings Disposals

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/inageya-co-ltd" target="_blank" data-smartkarma-citation="entities:13994:1" rel="noopener">Inageya Co Ltd (8182 JP)</a> announced a share exchange offer by <a href="https://www.smartkarma.com/entities/united-super-markets-holdings" target="_blank" data-smartkarma-citation="entities:26107:1" rel="noopener">United Super Markets (3222 JP)</a> at 1.46 USMH shares per Inageya share.</li>
<li>The share exchange aligns with <a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon Co Ltd (8267 JP)</a>’s well-flagged intention of making Inageya a wholly-owned subsidiary of USMH.</li>
<li>Aeon’s 50%+ shareholding in Inageya and USMH facilitates the two EGM votes. The deal metrics are broadly fair for both sets of shareholders. </li>
</ul>



Inageya Co Ltd (8182 JP) announced a share exchange offer by United Super Markets (3222 JP) at 1.46 USMH shares per Inageya share.
The share exchange aligns with Aeon Co Ltd (8267 JP)’s well-flagged intention of making Inageya a wholly-owned subsidiary of USMH.
Aeon’s 50%+ shareholding in Inageya and USMH facilitates the two EGM votes. The deal metrics are broadly fair for both sets of shareholders. 


Inageya (8182 JP): Share Exchange Offer from USMH (3222 JP)

<ul>
<li>The current “higher for longer” interest rates in the US and other developed markets adds to the Bank of Japan potentially ending its negative interest rate policy</li>
<li>Domestically, news reports suggest that the BoJ's 2% inflation target is increasingly likely to be met in the short term, which further drives the potential normalization of interest rate policy</li>
<li>Growing expectation of the BoJ’s negative interest rate policy exit adds upside to Japanese bank shares, especially those geared into higher domestic interest rates; we like Resona, Mizuho and Concordia</li>
</ul>


The current “higher for longer” interest rates in the US and other developed markets adds to the Bank of Japan potentially ending its negative interest rate policy
Domestically, news reports suggest that the BoJ's 2% inflation target is increasingly likely to be met in the short term, which further drives the potential normalization of interest rate policy
Growing expectation of the BoJ’s negative interest rate policy exit adds upside to Japanese bank shares, especially those geared into higher domestic interest rates; we like Resona, Mizuho and Concordia


Japanese Bigger Cap Banks – Exit from BoJ’s Negative Interest Rate Policy Gathers Steam

Japan

Resona Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, provides financial services, including banking, trust operations, and credit card services. Resona Holdings also offers consulting services related to personal loans, asset management, and asset succession.

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Resona Holdings (8308 JP)

Norinchukin Bank – Sector Outlier Rather than Big-Cap Bank Canary in the Coalmine

Norinchukin's big unrealized bond portfolio losses are not representative of interest rate risk in the bigger cap banks, Norinchukin is an...

Victor Galliano

Chiba Bank - Short Term Borrowing Surges, Just at the Wrong Time

Chiba Bank has opted to grossly raise its short term borrowings as JPY rates start to rise while not locking in long term borrowings.

Daniel Tabbush

Japanese Bigger-Cap Banks – Rates Story Continues, with the Prospect of Equity Holdings Disposals

Bank of Japan should raise benchmark rates; we like Resona, Mizuho, SMFG, and Concordia, not just for their gearing to higher rates but also for...

Victor Galliano

Japanese Bigger Cap Banks – Exit from BoJ’s Negative Interest Rate Policy Gathers Steam

BoJ approaching the end its negative interest rate policy should act as a boost to Japanese bank shares, especially those geared into higher...

Victor Galliano

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Norinchukin Bank – Sector Outlier Rather than Big-Cap Bank Canary in the Coalmine

​Norinchukin's big unrealized bond portfolio losses are not representative of interest rate risk in the bigger cap banks, Norinchukin is an...

Victor Galliano

Chiba Bank - Short Term Borrowing Surges, Just at the Wrong Time

Chiba Bank has opted to grossly raise its short term borrowings as JPY rates start to rise while not locking in long term borrowings.

Daniel Tabbush

Japanese Bigger-Cap Banks – Rates Story Continues, with the Prospect of Equity Holdings Disposals

​Bank of Japan should raise benchmark rates; we like Resona, Mizuho, SMFG, and Concordia, not just for their gearing to higher rates but also for...

Victor Galliano

Inageya (8182 JP): Share Exchange Offer from USMH (3222 JP)

Aeon’s 50%+ shareholding in Inageya and USMH facilitates the two EGM votes. The deal metrics are broadly fair for both sets of shareholders.

Arun George

Japanese Bigger Cap Banks – Exit from BoJ’s Negative Interest Rate Policy Gathers Steam

​BoJ approaching the end its negative interest rate policy should act as a boost to Japanese bank shares, especially those geared into higher...

Victor Galliano

Norinchukin's big unrealized bond portfolio losses are not representative of interest rate risk in the bigger cap banks, Norinchukin is an...

Bank of Japan should raise benchmark rates; we like Resona, Mizuho, SMFG, and Concordia, not just for their gearing to higher rates but also for...

BoJ approaching the end its negative interest rate policy should act as a boost to Japanese bank shares, especially those geared into higher...