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>Among bigger cap GEM banks, we pick four longs and one short as our conviction calls for 2024</li>
<li>Our core buys are Bank Mandiri from Indonesia, KB Financial from South Korea, China Merchants Bank and Banco do Brasil</li>
<li>Our key sell is Kotak Mahindra Bank from India which is richly valued, exposed to low prospective earnings growth and has low credit quality coverage</li>
</ul>


Among bigger cap GEM banks, we pick four longs and one short as our conviction calls for 2024
Our core buys are Bank Mandiri from Indonesia, KB Financial from South Korea, China Merchants Bank and Banco do Brasil
Our key sell is Kotak Mahindra Bank from India which is richly valued, exposed to low prospective earnings growth and has low credit quality coverage


Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>We remain constructive on global equities as long as the MSCI ACWI (ACWI-US) holds above major support at $90.50-91.50.</li>
<li>We continue to monitor for whether ACWI-US and EEM-US break supports at $90.50-91.50 and $37, or if broken indexes (EURO STOXX 50, MSCI ACWI ex-US, EAFE) can reclaim supports.</li>
<li>Neither has happened yet, so we remain in wait-and-see mode. We are downgrading non-US small-caps to market weight. Non-US Value remains leadership -- remain overweight/buys in Financials and Communications</li>
</ul>


We remain constructive on global equities as long as the MSCI ACWI (ACWI-US) holds above major support at $90.50-91.50.
We continue to monitor for whether ACWI-US and EEM-US break supports at $90.50-91.50 and $37, or if broken indexes (EURO STOXX 50, MSCI ACWI ex-US, EAFE) can reclaim supports.
Neither has happened yet, so we remain in wait-and-see mode. We are downgrading non-US small-caps to market weight. Non-US Value remains leadership -- remain overweight/buys in Financials and Communications


MSCI ACWI, MSCI EM Still Above Supports; Buys in Global Value - Financials and Communications

Equity Bottom-Up

<ul>
<li>Our focus charts this month are on Brazil banks’ liquidity and capital adequacy trends, which seem reassuring to us, as these are currently topical bank ratios in investors’ minds</li>
<li>The February NPL trends due to seasonal factors, we are concerned at the pace of NPL ratio worsening and arrears, especially in household credit</li>
<li>YoY system loan growth to February decelerated further to +12.6%, largely due to slower corporate loan growth; credit spread trends were mixed with individual spreads widening, and corporate spreads eroding</li>
</ul>


Our focus charts this month are on Brazil banks’ liquidity and capital adequacy trends, which seem reassuring to us, as these are currently topical bank ratios in investors’ minds
The February NPL trends due to seasonal factors, we are concerned at the pace of NPL ratio worsening and arrears, especially in household credit
YoY system loan growth to February decelerated further to +12.6%, largely due to slower corporate loan growth; credit spread trends were mixed with individual spreads widening, and corporate spreads eroding


February Brazil Bank Data in Charts – NPL Trends a Concern, yet Liquidity and Solvency Seem Sound

Research Firm with a Qualitative Overlay, Pearl Gray Equity and Research

Pearl Gray Equity and Research

Research Firm with a Qualitative Overlay

Quantitative fund & research firm with a qualitative overlay. 

Our coverage: General U.S. with a skew towards the primary sector. 

Methods: Smart Beta/Factor Pricing, Neural Networks, Street Gossip, and Common Sense.

<ul><li>Banco do Brasil S.A. is an emerging market banking stock that presents a cyclical opportunity to risk-seeking investors.</li><li>The bank's operational prowess and dominant market position allow it to monetize high-yielding credit.</li><li>In addition, the bank's fee-based business is head above shoulders.</li></ul>

Banco do Brasil S.A. is an emerging market banking stock that presents a cyclical opportunity to risk-seeking investors.The bank's operational prowess and dominant market position allow it to monetize high-yielding credit.In addition, the bank's fee-based business is head above shoulders.

<ul>
<li>Even though January usually shows poor NPL trends due to seasonal factors, we are concerned at the pace of NPL ratio worsening and arrears, especially in household credit</li>
<li>System loan growth over the last twelve months to January decelerated further (from +14% to December) but still grew by +13.6%, helped by a slight pick-up in consumer loan growth</li>
<li>New credit spreads rebounded MoM, along with lending rates; rising political risk is a concern so we turned cautious on Banco do Brasil, and we remain cautious on Santander Brasil</li>
</ul>


Even though January usually shows poor NPL trends due to seasonal factors, we are concerned at the pace of NPL ratio worsening and arrears, especially in household credit
System loan growth over the last twelve months to January decelerated further (from +14% to December) but still grew by +13.6%, helped by a slight pick-up in consumer loan growth
New credit spreads rebounded MoM, along with lending rates; rising political risk is a concern so we turned cautious on Banco do Brasil, and we remain cautious on Santander Brasil


January Brazil Bank Data in Charts –NPL Trends Are the Main Concern

Brazil

Banco do Brasil S.A. attracts deposits and offers retail and commercial banking services.  The Bank offers consumer, commercial, and agribusiness loans, asset management, foreign exchange, private pension, insurance, lease financing, credit cards, and Internet banking services.

Price Gauge
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Banco do Brasil (BBAS3 BZ)

GEM Banks; 2024 Conviction Calls

2024 GEM Bank picks: Longs in improving return Bank Mandiri, and value plays KB Financial, China Merchants Bank, and Banco do Brasil, with a short...

Victor Galliano

MSCI ACWI, MSCI EM Still Above Supports; Buys in Global Value - Financials and Communications

MSCI $ACWI, MSCI EM $EEM Still Above Supports at $90.50-$91.50 and $37, though being tested today. Meanwhile, broken indexes (EURO $STOXX 50,...

Vermilion Research

February Brazil Bank Data in Charts – NPL Trends a Concern, yet Liquidity and Solvency Seem Sound

We add Brazil banks’ liquidity & capital adequacy ratios, which seem reassuring, whilst the credit quality metrics are mixed with SME NPLs rising;...

Victor Galliano

Banco Do Brasil: A High-Yield Bombshell

Banco do Brasil S.A. is an emerging market banking stock that presents a cyclical opportunity to risk-seeking investors.

Pearl Gray Equity and Research

January Brazil Bank Data in Charts –NPL Trends Are the Main Concern

Seasonally, January data tends to show poor NPL trends but the pace of NPL ratio worsening are a concern; we became cautious on Banco do Brasil due...

Victor Galliano

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

GEM Banks; 2024 Conviction Calls

2024 ​GEM Bank picks: Longs in improving return Bank Mandiri, and value plays KB Financial, China Merchants Bank, and Banco do Brasil, with a short...

Victor Galliano

MSCI ACWI, MSCI EM Still Above Supports; Buys in Global Value - Financials and Communications

MSCI $ACWI, MSCI EM $EEM Still Above Supports at $90.50-$91.50 and $37, though being tested today. Meanwhile, broken indexes (EURO $STOXX 50,...

Vermilion Research

February Brazil Bank Data in Charts – NPL Trends a Concern, yet Liquidity and Solvency Seem Sound

We add Brazil banks’ liquidity & capital adequacy ratios, which seem reassuring, whilst the credit quality metrics are mixed with SME NPLs rising;...

Victor Galliano

Banco Do Brasil: A High-Yield Bombshell

Banco do Brasil S.A. is an emerging market banking stock that presents a cyclical opportunity to risk-seeking investors.

Pearl Gray Equity and Research

January Brazil Bank Data in Charts –NPL Trends Are the Main Concern

Seasonally, January data tends to show poor NPL trends but the pace of NPL ratio worsening are a concern; we became cautious on Banco do Brasil due...

Victor Galliano

2024 GEM Bank picks: Longs in improving return Bank Mandiri, and value plays KB Financial, China Merchants Bank, and Banco do Brasil, with a short...