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

Thematic (Sector/Industry)

* Questionable Reduction in Reserve Coverage: Just as the wheels are about to fall off the bus, the China Bank Regulatory Commission (CBRC) - in their infinite wisdom – decided to allow Chinese banks to reduce the minimum NPL coverage ratio from 150% to 120%, and the minimum LLR cover of total loans from 2.5% to 1.5%.* Knee Jerk Reaction Is Silly – At Least For the 2nd Tier Banks:The 2nd tier banks carry the risk of substantially higher capital requirements and inadequate provisions as these…

* Questionable Reduction in Reserve Coverage: Just as the wheels are about to fall off the bus, the China Bank Regulatory Commission (CBRC) - in their infinite wisdom – decided to allow Chinese banks to reduce the minimum NPL coverage ratio from 150% to 120%, and the minimum LLR cover of total loans from 2.5% to 1.5%.* Knee Jerk Reaction Is Silly – At Least For the 2nd Tier Banks:The 2nd tier banks carry the risk of substantially higher capital requirements and inadequate provisions as these…

China Banks – Can You Say Capital Forbearance?

* Risk Increasing Within Tier 2 Banks:  The 2nd tier banks is looking increasingly vulnerable. Tighter asset management regulations are being implemented in March 2018 which should force the sector to abandon their high level of illiquid assets and promote “real” NAV-type products. This risk has now morphed into a size where confidence in the financial system could erode quickly. * Watch Your Insurers: Mainland Chinese insurers have 50%-60% of their investment portfolios exposed to the weakest…

* Risk Increasing Within Tier 2 Banks:  The 2nd tier banks is looking increasingly vulnerable. Tighter asset management regulations are being implemented in March 2018 which should force the sector to abandon their high level of illiquid assets and promote “real” NAV-type products. This risk has now morphed into a size where confidence in the financial system could erode quickly. * Watch Your Insurers: Mainland Chinese insurers have 50%-60% of their investment portfolios exposed to the weakest…

China Financials – The Accident About to Happen

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Agricultural Bank Of China / Event-Driven

This is a new H/A Spread monitor project offering a brief look at recent changes in H-Share and A-Share spreads, Southbound flow and impact, and where the spreads are trading within their own historical ranges.
Main notes this week are:
<ul>
<li>HK$13.5bn of net buying by Southbound flows, which was 1.46% of HKEx Turnover - about in line with the previous four full weeks of trading. </li>
<li>Net buying since the last net selling day has been HK$48.8bn, which is not an unusual streak. </li>
<li>Southbound flows in the…</li>
</ul>

This is a new H/A Spread monitor project offering a brief look at recent changes in H-Share and A-Share spreads, Southbound flow and impact, and where the spreads are trading within their own historical ranges.
Main notes this week are:

HK$13.5bn of net buying by Southbound flows, which was 1.46% of HKEx Turnover - about in line with the previous four full weeks of trading. 
Net buying since the last net selling day has been HK$48.8bn, which is not an unusual streak. 
Southbound flows in the…


Quiddity Weekly H/A: Discounts & Southbound Flows 20180126

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

MSCI Emerging Markets Index / Technical Analysis

Big-picture technicals offer a compelling outlook for equities -- in the long-run. Despite arguably stretched trends, especially in the U.S. and EM, one indicator in particular keeps us optimistic: monthly charts.  What is clear right now is: (1) Europe is on the doorstep of breaking above secular resistance; (2) Japan is breaking out above secular resistance; (3) and EM already has. Speaking of EM, we view this as the place to be, or overweight, in 2018. The EM/EAFE’s 20-year chart (below) reveals an in-progress trend reversal (which developed at a secular trendline) in favor of EM.In today’s report we review every global sector, highlighting actionable stocks within each.

Big-picture technicals offer a compelling outlook for equities -- in the long-run. Despite arguably stretched trends, especially in the U.S. and EM, one indicator in particular keeps us optimistic: monthly charts.  What is clear right now is: (1) Europe is on the doorstep of breaking above secular resistance; (2) Japan is breaking out above secular resistance; (3) and EM already has. Speaking of EM, we view this as the place to be, or overweight, in 2018. The EM/EAFE’s 20-year chart (below) reveals an in-progress trend reversal (which developed at a secular trendline) in favor of EM.In today’s report we review every global sector, highlighting actionable stocks within each.

Macro & Asian equity Technical Strategies, BBSP Asia

Federico D'Inca

Macro & Asian equity Technical Strategies

BBSP Asia

Sony Financial Group / Technical Analysis

Mid Term Country Allocation (Tactical view) in terms of Relative Value vs MXAP • HSCEI/MXAP ratio is moving in a range pattern. Therefore downgrade HSCEI from increase exposure to hold. While HSI/MXAP ratio remains above a trend line support (preference for a tactical HSI outperformance over HSCEI). • Keep “overweight” position on HSI, Nikkei, ASX and TWSE. • Maintain “Hold for KOSPI and Nifty vs MXAPShould you have any questions and wish to speak with one of our analysts, please don’t hesitate to…

Mid Term Country Allocation (Tactical view) in terms of Relative Value vs MXAP • HSCEI/MXAP ratio is moving in a range pattern. Therefore downgrade HSCEI from increase exposure to hold. While HSI/MXAP ratio remains above a trend line support (preference for a tactical HSI outperformance over HSCEI). • Keep “overweight” position on HSI, Nikkei, ASX and TWSE. • Maintain “Hold for KOSPI and Nifty vs MXAPShould you have any questions and wish to speak with one of our analysts, please don’t hesitate to…

BBSP Equity Asia Weekly Research 10th January 2018

China

Bank of China Limited provides banking services. The Company offers deposits, loans, foreign currency transaction, fund settlement, and other services. Bank of China provides its services to individuals, enterprises, and other clients.

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Bank of China (601988 CH)

China Banks – Can You Say Capital Forbearance?

* Questionable Reduction in Reserve Coverage: Just as the wheels are about to fall off the bus, the China Bank Regulatory Commission (CBRC) - in...

Thomas J. Monaco

China Financials – The Accident About to Happen

* Risk Increasing Within Tier 2 Banks: The 2nd tier banks is looking increasingly vulnerable. Tighter asset management regulations are being...

Thomas J. Monaco

Quiddity Weekly H/A: Discounts & Southbound Flows 20180126

This is a new H/A Spread monitor project offering a brief look at recent changes in H-Share and A-Share spreads, Southbound flow and impact, and...

Travis Lundy

Global Equity Strategy: Overweight EM

Big-picture technicals offer a compelling outlook for equities -- in the long-run. Despite arguably stretched trends, especially in the U.S. and...

Vermilion Research

BBSP Equity Asia Weekly Research 10th January 2018

Mid Term Country Allocation (Tactical view) in terms of Relative Value vs MXAP• HSCEI/MXAP ratio is moving in a range pattern. Therefore downgrade...

BBSP Asia

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