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>We stick with Brazilian exchange B3 as our core value pick; it has a growing share of data revenues, its post-trade revenues are understated and equity fee pressure is easing</li>
<li>We keep Hong Kong Exchange as a buy, with its high share of post-trade revenues; HKEx shares have been highly volatile, but they represent relative value combined with growth potential</li>
<li>Philippines Stock Exchange (PSE) and BSE are new additions to our coverage of EM exchanges with PSE being one to watch; MexBolsa is deep value, but lacking a re-rating catalyst</li>
</ul>


We stick with Brazilian exchange B3 as our core value pick; it has a growing share of data revenues, its post-trade revenues are understated and equity fee pressure is easing
We keep Hong Kong Exchange as a buy, with its high share of post-trade revenues; HKEx shares have been highly volatile, but they represent relative value combined with growth potential
Philippines Stock Exchange (PSE) and BSE are new additions to our coverage of EM exchanges with PSE being one to watch; MexBolsa is deep value, but lacking a re-rating catalyst


Emerging Market Exchanges – Brazilian Exchange B3 (B3SA3 BZ) Stands Out

Equity Bottom-Up

Bolsa Mexicana De Valores Sab / Equity Bottom-Up

Bolsa Mexicana De Valores Sab (BOLSAA MM)

<ul>
<li>We upgrade BolsaMex to a buy rating; we believe that it is too cheap to ignore and that it has sound growth credentials with its healthy share of post-trade revenues</li>
<li>We downgrade B3 Exchange to a neutral from buy, after its strong share price performance since mid-October lows; we feel it is still attractive but not as compelling as BolsaMex</li>
<li>We upgrade BSE to a neutral rating from sell despite it trading on rich fundamental valuations; India’s strong IPO pipeline is one major factor in de-railing our sell recommendation</li>
</ul>


We upgrade BolsaMex to a buy rating; we believe that it is too cheap to ignore and that it has sound growth credentials with its healthy share of post-trade revenues
We downgrade B3 Exchange to a neutral from buy, after its strong share price performance since mid-October lows; we feel it is still attractive but not as compelling as BolsaMex
We upgrade BSE to a neutral rating from sell despite it trading on rich fundamental valuations; India’s strong IPO pipeline is one major factor in de-railing our sell recommendation


GEM Exchanges –Bolsa Mexicana (BOLSAA MM) Is Our Top Pick

B3  - Brasil Bolsa Balcao / Equity Bottom-Up

<ul>
<li>We stick with Brazilian exchange B3 as our buy pick, as the scorecard indicates; data represents the highest share of total revenues versus peers and its post-trade revenues are understated</li>
<li>We downgrade Hong Kong Exchange to a neutral from buy, after its strong share price performance YTD; we feel much growth potential is discounted at current valuations</li>
<li>We downgrade BSE to a sell rating as it trades on rich fundamental valuations making it vulnerable to negative earnings surprises; its EBITDA margin no longer lags its peer group</li>
</ul>


We stick with Brazilian exchange B3 as our buy pick, as the scorecard indicates; data represents the highest share of total revenues versus peers and its post-trade revenues are understated
We downgrade Hong Kong Exchange to a neutral from buy, after its strong share price performance YTD; we feel much growth potential is discounted at current valuations
We downgrade BSE to a sell rating as it trades on rich fundamental valuations making it vulnerable to negative earnings surprises; its EBITDA margin no longer lags its peer group


GEM Exchanges –Scorecard Confirms Brazilian Exchange B3 (B3SA3 BZ) As Our Top Pick

<ul>
<li>Our core pick is Brazilian exchange B3; this is a contrarian call, given its poor share price performance year to date, but it is attractively priced versus its peers</li>
<li>B3’s share of post-trade revenue is understated, and it is a well-diversified exchange in terms of the product offering, which includes cash equities, equity derivatives, FX, interest rates and commodities</li>
<li>We also like Hong Kong Exchange, with its high share of post-trade revenues; HKEx should benefit from improving investor sentiment towards China, boosted by the Chinese government’s recent economic stimulus</li>
</ul>


Our core pick is Brazilian exchange B3; this is a contrarian call, given its poor share price performance year to date, but it is attractively priced versus its peers
B3’s share of post-trade revenue is understated, and it is a well-diversified exchange in terms of the product offering, which includes cash equities, equity derivatives, FX, interest rates and commodities
We also like Hong Kong Exchange, with its high share of post-trade revenues; HKEx should benefit from improving investor sentiment towards China, boosted by the Chinese government’s recent economic stimulus


Emerging Market Exchanges – Attractive Valuations with Defensive Qualities

Asia Pac ECM and Index Rebal, DZT Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyzed the changes in short interest of Bursa stocks as of May 15th. The aggregated short interest is USD600m.</li>
<li>We tabulate league tables for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.</li>
<li>We highlight short interest changes in Top Glove, Public Bank, SP Setia, IOI Properties, Kossan Rubber Industries.</li>
</ul>


We analyzed the changes in short interest of Bursa stocks as of May 15th. The aggregated short interest is USD600m.
We tabulate league tables for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.
We highlight short interest changes in Top Glove, Public Bank, SP Setia, IOI Properties, Kossan Rubber Industries.


Bursa Short Interest Weekly (May 15th): Top Glove, Public Bank, SP Setia, IOI Properties

Malaysia

Bursa Malaysia Bhd is a fully integrated exchange, offering a wide range of exchange-related services, including trading, clearing, settlement, and depository services. The exchange also offers information services related to the Malaysian securities market.

Price Gauge
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Bursa Malaysia (BURSA MK)

Emerging Market Exchanges – Brazilian Exchange B3 (B3SA3 BZ) Stands Out

Our core value pick is B3 in Brazil, with its well spread product offering; buy HKEx with its high post-trade revenues, whilst PSE is one to watch,...

Victor Galliano

GEM Exchanges –Bolsa Mexicana (BOLSAA MM) Is Our Top Pick

We Upgrade BolsaMex to buy for its deep value, strong post-trade revenues, more attractive than downgraded-to-neutral B3; BSE upgraded to neutral...

Victor Galliano

GEM Exchanges –Scorecard Confirms Brazilian Exchange B3 (B3SA3 BZ) As Our Top Pick

In GEM exchanges, stick with B3 as our buy due to attractive value and low PEG, downgrade HKEx to neutral, and downgrade BSE to sell due to rich...

Victor Galliano

Emerging Market Exchanges – Attractive Valuations with Defensive Qualities

B3’s share of post-trade revenue is understated, it is a well-diversified exchange in terms of the product offering; HKEx has a high share of post...

Victor Galliano

Bursa Short Interest Weekly (May 15th): Top Glove, Public Bank, SP Setia, IOI Properties

We analyzed Bursa Malaysia short interest report for the past week and highlighted short interest changes in Top Glove, Public Bank, SP Setia, IOI...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Emerging Market Exchanges – Brazilian Exchange B3 (B3SA3 BZ) Stands Out

Our core value pick is B3 in Brazil, with its well spread product offering; buy HKEx with its high post-trade revenues, whilst PSE is one to watch,...

Victor Galliano

GEM Exchanges –Bolsa Mexicana (BOLSAA MM) Is Our Top Pick

​We Upgrade BolsaMex to buy for its deep value, strong post-trade revenues, more attractive than downgraded-to-neutral B3; BSE upgraded to neutral...

Victor Galliano

GEM Exchanges –Scorecard Confirms Brazilian Exchange B3 (B3SA3 BZ) As Our Top Pick

​In GEM exchanges, stick with B3 as our buy due to attractive value and low PEG, downgrade HKEx to neutral, and downgrade BSE to sell due to rich...

Victor Galliano

Emerging Market Exchanges – Attractive Valuations with Defensive Qualities

​B3’s share of post-trade revenue is understated, it is a well-diversified exchange in terms of the product offering; HKEx has a high share of post...

Victor Galliano

Bursa Short Interest Weekly (May 15th): Top Glove, Public Bank, SP Setia, IOI Properties

We analyzed Bursa Malaysia short interest report for the past week and highlighted short interest changes in Top Glove, Public Bank, SP Setia, IOI...

Ke Yan, CFA, FRM

We Upgrade BolsaMex to buy for its deep value, strong post-trade revenues, more attractive than downgraded-to-neutral B3; BSE upgraded to neutral...

In GEM exchanges, stick with B3 as our buy due to attractive value and low PEG, downgrade HKEx to neutral, and downgrade BSE to sell due to rich...

B3’s share of post-trade revenue is understated, it is a well-diversified exchange in terms of the product offering; HKEx has a high share of post...