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>We believe that, despite the macro-economic challenges of Indonesia, investor sentiment is no longer worsening and may even be improving as reflected in the banks’ PBV ratio trends</li>
<li>We re-iterate our buy rating on Bank Mandiri for its improving return trends, solid credit quality, attractive valuations and its asset-sensitivity at a time of higher benchmark rates</li>
<li>Mandiri also has relatively limited exposure to domestic government bonds, which should limit any hit to core capital at this time of high bond yields</li>
</ul>


We believe that, despite the macro-economic challenges of Indonesia, investor sentiment is no longer worsening and may even be improving as reflected in the banks’ PBV ratio trends
We re-iterate our buy rating on Bank Mandiri for its improving return trends, solid credit quality, attractive valuations and its asset-sensitivity at a time of higher benchmark rates
Mandiri also has relatively limited exposure to domestic government bonds, which should limit any hit to core capital at this time of high bond yields


Indonesian Banks – Re-Iterate Buy on Value and Growth-Potential Bank Mandiri (BMRI IJ)

Chief Executive Officer, Emmer Capital Partners Limited

Manishi Raychaudhuri

Chief Executive Officer

Emmer Capital Partners Limited

Emmer Capital Partners is an Asia Pacific focused financial advisory firm engaging in strategic financial asset allocation advice, bespoke thematic research and advising early-stage companies and connecting them to investors. Emmer Capital provides macro-economic and multi-asset investment strategy inputs to institutions, family offices, private wealth managers, private equity, and corporate boards directly and through independent research platforms. Emmer Capital also advises a wide range of startup companies on fund raising and business strategy. Emmer Capital's active engagement with the print and electronic media reaches a broad spectrum of investors across the globe.

Cross Asset Strategy

<ul>
<li>Malaysia's PE and P/BV are at significant discounts to their long-term means. Thailand is at a small discount. Indonesia and Philippines are at very large discounts to their long-term averages.</li>
<li>Singapore's PE and P/BV are at large premiums to long-term averages. Despite the improvement in governance and high dividend yield, they don't seem justified by forward EPS growth and ROE.</li>
<li>In the near term, Indonesia, Philippines, Malaysia could rerate. However, "higher for longer" US yields could prevent significant rerating of the first two. Thai valuations could stay flat for now.</li>
</ul>


Malaysia's PE and P/BV are at significant discounts to their long-term means. Thailand is at a small discount. Indonesia and Philippines are at very large discounts to their long-term averages.
Singapore's PE and P/BV are at large premiums to long-term averages. Despite the improvement in governance and high dividend yield, they don't seem justified by forward EPS growth and ROE.
In the near term, Indonesia, Philippines, Malaysia could rerate. However, "higher for longer" US yields could prevent significant rerating of the first two. Thai valuations could stay flat for now.


Asian Equities: Valuations in ASEAN Markets Are More Divergent than Rest of Asia

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>Following a market consultation, Indonesia could see its weight slashed in a global index and that will lead to passive selling in May.</li>
<li>Depending on the approach taken to computing free float, outflows could be in the range of US$925m and US$2.2bn.</li>
<li>The change in free float methodology could also lead to a few stocks being deleted from the index due to low free float market cap.</li>
</ul>


Following a market consultation, Indonesia could see its weight slashed in a global index and that will lead to passive selling in May.
Depending on the approach taken to computing free float, outflows could be in the range of US$925m and US$2.2bn.
The change in free float methodology could also lead to a few stocks being deleted from the index due to low free float market cap.


Global Index: Indonesia Likely to See Huge Outflows in May

External broker reports(aggregated public sources), BRI Danareksa Research

BRI Danareksa Research

External broker reports(aggregated public sources)

As a one-stop financial solution with the vision to be the most valuable securities house, BRI Danareksa Sekuritas (BRIDS) has maintained an excellent track record and extensive experience in the capital market as an underwriter, broker, and financial advisor for individual, institutional, foreign and domestic, private and government clients. Established in 1992, PT Danareksa Sekuritas is a securities company that performs activities as a securities broker, underwriter, or arranger and financial advisor.

<ul><li>Bank Mandiri (BMRI IJ)2Q26 Earnings: Beat; Lower CoC Offset NIM Compression.</li><li>BMRI posted 2Q26 net profit of Rp15.0tr (-2% qoq, +33% yoy), bringing 1H26 to Rp30.4tr (+24% yoy).</li><li>Management lowered FY26 NIM guidance to 4.3-4.5% (from 4.5-4.7%) while maintaining CoC, loan growth, and CIR guidance. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Bank Mandiri (BMRI IJ)2Q26 Earnings: Beat; Lower CoC Offset NIM Compression.BMRI posted 2Q26 net profit of Rp15.0tr (-2% qoq, +33% yoy), bringing 1H26 to Rp30.4tr (+24% yoy).Management lowered FY26 NIM guidance to 4.3-4.5% (from 4.5-4.7%) while maintaining CoC, loan growth, and CIR guidance. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Bank Mandiri (BMRI.IJ) 2Q26 Earnings: Beat; Lower CoC Offset NIM Compression

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

<ul>
<li>Average weights have fallen to an all-time low of 0.93%, with fund participation at a 15-year low of 80.45% — yet the majority of active EM managers remain invested.</li>
<li>Selling has been concentrated in domestic banks, with Bank Central Asia seeing the largest outright closures, while ASEAN allocations as a whole have dropped to their lowest level on record.</li>
<li>With MSCI’s verdict on Indonesia’s EM status still pending, the country sits firmly in negative momentum territory, but for many funds, much of the pain may already be behind them.</li>
</ul>


Average weights have fallen to an all-time low of 0.93%, with fund participation at a 15-year low of 80.45% — yet the majority of active EM managers remain invested.
Selling has been concentrated in domestic banks, with Bank Central Asia seeing the largest outright closures, while ASEAN allocations as a whole have dropped to their lowest level on record.
With MSCI’s verdict on Indonesia’s EM status still pending, the country sits firmly in negative momentum territory, but for many funds, much of the pain may already be behind them.


Indonesia

PT Bank Mandiri (Persero) Tbk is Indonesia's largest bank, providing a wide range of banking products and services to individuals and businesses. These offerings include savings and current accounts, various loans, credit and debit cards, e-banking, investment products, and insurance services. The bank was formed on October 2, 1998, through the merger of four state-owned banks and is headquartered in Jakarta, Indonesia.

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Bank Mandiri (BMRI IJ)

Indonesian Banks – Re-Iterate Buy on Value and Growth-Potential Bank Mandiri (BMRI IJ)

We reiterate our high conviction buy rating on Bank Mandiri for its improving return trends, solid credit quality, attractive valuations and its...

Victor Galliano

Asian Equities: Valuations in ASEAN Markets Are More Divergent than Rest of Asia

ASEAN valuations are divergent. MY & TH at moderate discounts to long-term means. ID & PH at large discounts; SG at a large premium. MY, ID, PH...

Manishi Raychaudhuri

Global Index: Indonesia Likely to See Huge Outflows in May

This is going be a huge theme today for Indonesia. The price movements of a lot of stocks have raised issues in the past with global index...

Brian Freitas