EM PM, Ecstrat

Emad Mostaque

EM PM

Ecstrat

Ecstrat is a consultancy advising on asset allocation between global equity markets, with a focus on the intersection of governments, geopolitics, governance and markets.
 
Over the past few years and more especially since the Great Financial Crisis (GFC), investors have become more focused on short-term market movements and real-time returns and have consequently neglected the analysis of the underlying structural themes that underpin longer term performance.
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More specifically we believe that the evolution of governance-based relationships between investors, controlling shareholders, labour and the state is one of the primary determinants of both relative and absolute performance between individual equity markets.
 
We will endeavour to provide investors with some of the context surrounding governance-related issues which encompass many different disciplines including history, economics and political science, as well as the financial metrics which are the most obvious manifestation of the structural characteristics of each market.
 
We will pay particular attention to the shifts and potential inflection points for governance in individual markets as these are often the best lead indicators for both economic and market performance.

Thematic (Sector/Industry)

<ol><li>Align yourself with the Qatar government, $200bn in GDP, $200bn in assets for 200,000 civilians&nbsp;who own 96% of the stock market. Qatar Investment Fund, a $200m closed end fund listed in&nbsp;London run by Qatar Insurance giving you exposure to the Qatar index at a discount to NAV.&nbsp;Returned over 20% last year (dollar pegged) despite oil prices halving, will likely return double&nbsp;digits over the next 7-10 years annually.</li><li>Buy Iran as soon as it opens, currently under 6x PE with double digit dividends. I believe an Iran&nbsp;deal is likely in the next few months. One of the funds I advise hopes to have an easy to access&nbsp;listed fund to make things easier once SWIFT sanctions are removed</li><li>Buy oil for delivery in 2 years either direct or through options. You may not make as much as&nbsp;spot, but if I (and more importantly T Boone Pickens) are right, it should offer 20%+ return at the&nbsp;least with minimal downside risk unless someone decides to spend hundreds of billions in&nbsp;exploration or the world economy completely collapses. Buy Brent as the Brent-WTI spread will&nbsp;gap out into the middle of the year on Cushing inventory build due to the contango in the curve.</li></ol>

Align yourself with the Qatar government, $200bn in GDP, $200bn in assets for 200,000 civilians&nbsp;who own 96% of the stock market. Qatar Investment Fund, a $200m closed end fund listed in&nbsp;London run by Qatar Insurance giving you exposure to the Qatar index at a discount to NAV.&nbsp;Returned over 20% last year (dollar pegged) despite oil prices halving, will likely return double&nbsp;digits over the next 7-10 years annually.Buy Iran as soon as it opens, currently under 6x PE with double digit dividends. I believe an Iran&nbsp;deal is likely in the next few months. One of the funds I advise hopes to have an easy to access&nbsp;listed fund to make things easier once SWIFT sanctions are removedBuy oil for delivery in 2 years either direct or through options. You may not make as much as&nbsp;spot, but if I (and more importantly T Boone Pickens) are right, it should offer 20%+ return at the&nbsp;least with minimal downside risk unless someone decides to spend hundreds of billions in&nbsp;exploration or the world economy completely collapses. Buy Brent as the Brent-WTI spread will&nbsp;gap out into the middle of the year on Cushing inventory build due to the contango in the curve.

Macro Strategist, Saxo Capital Markets

Kay Van-Petersen

Macro Strategist

Saxo Capital Markets

<ul><li>With CHF last at 0.9033, we are +5% (unlevered) on the cross since the Fri Jan 16th call where it closed at 0.8587. I continue to believe and feel this is a big trade for the year, I am a lot more relaxed now that we are on the other side of the ECB and Greek election and think we are north of 1.02-1.05 in the 2nd half of the year </li><li>The size of ECB QE is not priced in – There is massive European Equities Upside!&nbsp;The case here is simple, we’ve just come out of a greater than anticipated QE from the ECB, that is open ended and set to run until Sep 2016.&nbsp;Whilst the market was more likely thinking we’d get a Euros 500-700bn handle, we got over a trillion euros worth, with a lot fewer parameters or caps than would have been expected by those pesky conservative Bundesbankers – who keep wanting to turn off the taps (I know I know, how dare they). </li></ul>

With CHF last at 0.9033, we are +5% (unlevered) on the cross since the Fri Jan 16th call where it closed at 0.8587. I continue to believe and feel this is a big trade for the year, I am a lot more relaxed now that we are on the other side of the ECB and Greek election and think we are north of 1.02-1.05 in the 2nd half of the year The size of ECB QE is not priced in – There is massive European Equities Upside!&nbsp;The case here is simple, we’ve just come out of a greater than anticipated QE from the ECB, that is open ended and set to run until Sep 2016.&nbsp;Whilst the market was more likely thinking we’d get a Euros 500-700bn handle, we got over a trillion euros worth, with a lot fewer parameters or caps than would have been expected by those pesky conservative Bundesbankers – who keep wanting to turn off the taps (I know I know, how dare they). 

The size of ECB QE is not priced in – Massive European Equities Upside

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

Equity Bottom-Up

<ul>
<li>The 4Q24 results from JPM are strong with net profit up 50% YoY and 9% QoQ</li>
<li>The bank shows almost no deposit growth YoY but there is reasonable loan growth</li>
<li>While non-accrual loans are rising, JPM holds substantially and rising LLR for these</li>
</ul>


The 4Q24 results from JPM are strong with net profit up 50% YoY and 9% QoQ
The bank shows almost no deposit growth YoY but there is reasonable loan growth
While non-accrual loans are rising, JPM holds substantially and rising LLR for these


JPM - 4Q24 Results Show Continued Strength in Core Income, Rising Non-Accruals Well Covered by LLR

External reports (aggregated public sources), Value Investors Club

Value Investors Club (VIC)

External reports (aggregated public sources)

Value Investors Club

Key points<ul><li>Short shares of EWBC, a medium-sized regional bank serving the Chinese/Asian expat community</li><li>Trading at 1.5x price/TBV with compression in NIM and increased deposit costs</li><li>Concerns about CRE exposure, uninsured deposits, investments in China/HK, and creditworthiness due to uniquely correlated customer base and soft guidance from management</li></ul>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Key pointsShort shares of EWBC, a medium-sized regional bank serving the Chinese/Asian expat communityTrading at 1.5x price/TBV with compression in NIM and increased deposit costsConcerns about CRE exposure, uninsured deposits, investments in China/HK, and creditworthiness due to uniquely correlated customer base and soft guidance from managementThis content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

East West Bancorp Inc (EWBC) - Tuesday, Feb 6, 2024

United States

East West Bancorp, Inc. is the holding company for East-West Bank.  The Bank is a commercial bank specializing in commercial, construction, and real estate lending as well as financing international trade.  East-West operates throughout Los Angeles, Orange, San Francisco and Santa Clara counties.

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East West Bancorp (EWBC US)

Islam, Terror, Politics and Oil - Part 2

Align yourself with the Qatar government, $200bn in GDP, $200bn in assets for 200,000 civilians who own 96% of the stock market. Qatar Investment...

Emad Mostaque

The size of ECB QE is not priced in – Massive European Equities Upside

With CHF last at 0.9033, we are +5% (unlevered) on the cross since the Fri Jan 16th call where it closed at 0.8587. I continue to believe and...

Kay Van-Petersen

JPM - 4Q24 Results Show Continued Strength in Core Income, Rising Non-Accruals Well Covered by LLR

The 4Q24 results from JPM are just out, with very strong growth in net profit, good cost controls and strong ALM still, with LDR expansion. Rising...

Daniel Tabbush

East West Bancorp Inc (EWBC) - Tuesday, Feb 6, 2024

Short shares of EWBC, a medium-sized regional bank serving the Chinese/Asian expat community. Trading at 1.5x price/TBV with compression in NIM and...

Value Investors Club (VIC)

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