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.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/banco-santander-sa" target="_blank" data-smartkarma-citation="entities:21296:1">Banco Santander Sa (SAN SM)</a> shares have underpeformed <a href="https://www.smartkarma.com/entities/banco-santander-mexico-b" target="_blank" data-smartkarma-citation="entities:27672:1">Banco Santander Mexico-B (BSMXB MM)</a> since the offer announcement in April, making the offer less appealing to SanMex minorities</li>
<li>In addition, SanMex delivered good results in 1Q19, and there is still some potential for results to improve at the margin</li>
<li>Santander parent management argues that SanMex minorities can benefit from risk diversification, especially in the current volatile political climate in Mexico and the uncertain outlook in the Mexico-US  trade wars</li>
<li>Yet SAN's poor share performance reflects the challenges that its core European operations face, and the soft share price may require SAN management to sweeten its all-share offer; the offer is expected to be launched in September or October 2019</li>
</ul>



Banco Santander Sa (SAN SM) shares have underpeformed Banco Santander Mexico-B (BSMXB MM) since the offer announcement in April, making the offer less appealing to SanMex minorities
In addition, SanMex delivered good results in 1Q19, and there is still some potential for results to improve at the margin
Santander parent management argues that SanMex minorities can benefit from risk diversification, especially in the current volatile political climate in Mexico and the uncertain outlook in the Mexico-US  trade wars
Yet SAN's poor share performance reflects the challenges that its core European operations face, and the soft share price may require SAN management to sweeten its all-share offer; the offer is expected to be launched in September or October 2019


Santander Parent for SanMex Offer Update; Wooing the Minorities?

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Equity Bottom-Up

<ul>
<li>A rising pro-market tide has lifted the big-cap banks, but now it is time to be more selective. We see further potential for stock re-rating among the Brazilian banks, as the new Bolosonaro administration executes its pro-market policies.</li>
<li>Our top pick is <a href="https://www.smartkarma.com/entities/24564" target="_blank">Banco Do Brasil Sa (BdoBAS3 BZ)</a> , with a target price of BRL57, which implies 19% re-rating potential. We believe that Banco do Brasil (BdoB) shareholders are set to benefit from less of a “social programme” agenda which in turn should help improve ROE going forward.</li>
<li>Yet the PBV discount between BdoB and its private sector peers - especially against Itaú Unibanco at 52% - has barely narrowed, and we believe that the discount has potential to narrow further as BdoB’s ROE expands and narrows the gap with its private sector peers.</li>
</ul>


A rising pro-market tide has lifted the big-cap banks, but now it is time to be more selective. We see further potential for stock re-rating among the Brazilian banks, as the new Bolosonaro administration executes its pro-market policies.
Our top pick is Banco Do Brasil Sa (BdoBAS3 BZ) , with a target price of BRL57, which implies 19% re-rating potential. We believe that Banco do Brasil (BdoB) shareholders are set to benefit from less of a “social programme” agenda which in turn should help improve ROE going forward.
Yet the PBV discount between BdoB and its private sector peers - especially against Itaú Unibanco at 52% - has barely narrowed, and we believe that the discount has potential to narrow further as BdoB’s ROE expands and narrows the gap with its private sector peers.


Brazil Banks: Banco Do Brasil Focus - Prospects for Improved Returns, Narrowing PBV Discount

Brazil

Banco Santander (Brasil) S.A. is the Brazilian subsidiary of the Spanish Santander Group, offering a comprehensive range of financial services including personal and commercial banking, investment banking, insurance, and asset management. It serves individuals, small and medium enterprises, and corporate clients through a multichannel network. The bank was founded in 1982 and is headquartered in São Paulo, Brazil.

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Banco Santander (Brasil) (SANB11 BR)

Santander Parent for SanMex Offer Update; Wooing the Minorities?

Banco Santander Sa (SAN SM) shares have underpeformed Banco Santander Mexico-B (BSMXB MM) since the offer announcement in April, making the offer...

Victor Galliano

Brazil Banks: Banco Do Brasil Focus - Prospects for Improved Returns, Narrowing PBV Discount

A rising pro-market tide has lifted the big-cap banks, but now it is time to be more selective. We see further potential for stock re-rating among...

Boost Research

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52-week Range

Market Cap (USDm)

P/E

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