Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

Late Friday evening, the Ministry of Finance released a notification in the Gazette of India regarding the Yes Bank Reconstruction Scheme where one of the main takeaways apart from the change in share capital was a lock-in period of three years on 75% of the shares held by existing shareholders of <a href="https://www.smartkarma.com/entities/yes-bank-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:767:1">Yes Bank (YES IN)</a> and on shares allotted to new investors as part of the Scheme.This retrospective imposition of a lock-in is unprecedented and will create problems for ETF issuers, arbitrage traders, options traders, long/short investors, as well as investors that have pledged the stock as collateral towards loans.The moratorium will cease to have effect from 6pm IST on 18 March 2020.

Late Friday evening, the Ministry of Finance released a notification in the Gazette of India regarding the Yes Bank Reconstruction Scheme where one of the main takeaways apart from the change in share capital was a lock-in period of three years on 75% of the shares held by existing shareholders of Yes Bank (YES IN) and on shares allotted to new investors as part of the Scheme.This retrospective imposition of a lock-in is unprecedented and will create problems for ETF issuers, arbitrage traders, options traders, long/short investors, as well as investors that have pledged the stock as collateral towards loans.The moratorium will cease to have effect from 6pm IST on 18 March 2020.

YES Bank Shareholder Lock-Up: Hotel California

India focused Portfolio Advisory - Exp of 40+years, Das Capital Management and Advisors

Arun Thirumalai

India focused Portfolio Advisory - Exp of 40+years

Das Capital Management and Advisors

Das Capital is a research boutique with an aim to continuously map and plan the investment needs of investors focused on India. We have a six member research team with a combined experience of over 40 years as a part of our investment wing. Our team assisted in the setup of Premji Investments, which was one of India’s first family offices focused to managing Mr.Azim Premji personal wealth. We also serve as a research team to two Indian private equity energy funds “Small is Beautiful” and “KSK Emerging India Energy Fund”.

We recently wrote a report on IDFC bank's (IDFCB) proposed merger with Shriram group <a href="https://www.smartkarma.com/insights/idfc-shriram-group-merger-a-sweet-deal-for-idfc-bank-shareholders" target="_blank" data-smartkarma-citation="insights:12035">IDFC- Shriram Group Merger, a Sweet Deal for IDFC Bank Shareholders</a> that eventually got called-off due to a disagreement in valuation. Shriram group, the bigger of the two entities, did not agree to the swap ratio proposed by IDFCB, thereby scrapping the deal.In a fresh turn of events, IDFCB found a new partner in Capital First Ltd (CAFL) which is one of the fastest growing NBFC in the country with an AUM of…

We recently wrote a report on IDFC bank's (IDFCB) proposed merger with Shriram group IDFC- Shriram Group Merger, a Sweet Deal for IDFC Bank Shareholders that eventually got called-off due to a disagreement in valuation. Shriram group, the bigger of the two entities, did not agree to the swap ratio proposed by IDFCB, thereby scrapping the deal.In a fresh turn of events, IDFCB found a new partner in Capital First Ltd (CAFL) which is one of the fastest growing NBFC in the country with an AUM of…

IDFC Bank-Capital First Merger, Win-Win for Both Entities

Value investor- India mid & small caps

Bhaskar Chakraborty

Equity Bottom-Up

<ul><li>Induction of senior management from top private banks in the country driving a turnaround in business quality and growth</li><li>Senior management compensation has moved away from the IBA platform enabling talent accretion; compensation structure aligned to shareholders with meaningful ESOP grants</li><li>Loan growth accelerating with focus on retail (39% of loans) and higher rated corporate (38% of loans) under new management</li><li>Slippages and credit costs trending down, limited exposure to challenged sectors allows management to focus on growth</li><li>Adequately capitalized for growth with Tier1 @ 14.7%</li><li>We expect 25% earnings CAGR over FY17-19. ROE should improve from 9.8% in FY17 to 11.4% in FY19. Stock trades at an attractive 1.55x FY19 P/B. We have a target of Rs140 @ 2x FY19 P/B. BUY for 28% upside.</li></ul>

Induction of senior management from top private banks in the country driving a turnaround in business quality and growthSenior management compensation has moved away from the IBA platform enabling talent accretion; compensation structure aligned to shareholders with meaningful ESOP grantsLoan growth accelerating with focus on retail (39% of loans) and higher rated corporate (38% of loans) under new managementSlippages and credit costs trending down, limited exposure to challenged sectors allows management to focus on growthAdequately capitalized for growth with Tier1 @ 14.7%We expect 25% earnings CAGR over FY17-19. ROE should improve from 9.8% in FY17 to 11.4% in FY19. Stock trades at an attractive 1.55x FY19 P/B. We have a target of Rs140 @ 2x FY19 P/B. BUY for 28% 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.

India’s real GDP growth continues to trend lower. We are doubtful that this is news or that people are unfamiliar with the chart of its regression.  What may be more interesting in the first instance is putting the country’s benign loan growth in perspective, and secondly long-term credit metrics of one the most aggressive lenders into this sustained downturn: <a href="https://www.smartkarma.com/entities/558" target="_blank" data-smartkarma-citation="entities:558:1">HDFC Bank Limited (HDFCB IN)</a>.  Domestic credit growth is running at 8% in India as at August 2017, year on year. This is half the average…

India’s real GDP growth continues to trend lower. We are doubtful that this is news or that people are unfamiliar with the chart of its regression.  What may be more interesting in the first instance is putting the country’s benign loan growth in perspective, and secondly long-term credit metrics of one the most aggressive lenders into this sustained downturn: HDFC Bank Limited (HDFCB IN).  Domestic credit growth is running at 8% in India as at August 2017, year on year. This is half the average…

A Long-Term Perspective on HDFC Bank Is Worthwhile as India's Slowdown Continues

India has cut interest rates again. The successive multiple rate cuts suggest to us that all is not well in the India economy. There will be inflated risk for those banks that have been especially aggressive at lending. For the listed banks with data through June 2017, <a href="https://www.smartkarma.com/entities/558" target="_blank" data-smartkarma-citation="entities:558:1">HDFC Bank Limited (HDFCB IN)</a> shows by far the most aggressive growth in credit. The concern ultimately is about the seasoning of loans into a worsening economic environment. Maybe this is why the bank is already showing some of…

India has cut interest rates again. The successive multiple rate cuts suggest to us that all is not well in the India economy. There will be inflated risk for those banks that have been especially aggressive at lending. For the listed banks with data through June 2017, HDFC Bank Limited (HDFCB IN) shows by far the most aggressive growth in credit. The concern ultimately is about the seasoning of loans into a worsening economic environment. Maybe this is why the bank is already showing some of…

India's 7th Rate Cut, HDFC's Defiant Loan Growth

India

Federal Bank is a major Indian private sector commercial bank offering a comprehensive suite of banking and financial services, including retail banking, wholesale banking, and treasury operations. It provides products such as savings and current accounts, loans, credit and debit cards, insurance, and wealth management. The bank is headquartered in Aluva, Kochi, Kerala, India, and was founded on April 23, 1931.

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Federal Bank (FB IN)

YES Bank Shareholder Lock-Up: Hotel California

Late Friday evening, the Ministry of Finance released a notification in the Gazette of India regarding the Yes Bank Reconstruction Scheme where one...

Brian Freitas

IDFC Bank-Capital First Merger, Win-Win for Both Entities

We recently wrote a report on IDFC bank's (IDFCB) proposed merger with Shriram group IDFC- Shriram Group Merger, a Sweet Deal for IDFC Bank...

Das Capital Management and Advisors

Federal Bank: Will You Bank on This One?

Induction of senior management from top private banks in the country driving a turnaround in business quality and growth Senior management...

Bhaskar Chakraborty

A Long-Term Perspective on HDFC Bank Is Worthwhile as India's Slowdown Continues

India’s real GDP growth continues to trend lower. We are doubtful that this is news or that people are unfamiliar with the chart of its...

Daniel Tabbush

India's 7th Rate Cut, HDFC's Defiant Loan Growth

India has cut interest rates again. The successive multiple rate cuts suggest to us that all is not well in the India economy. There will be...

Daniel Tabbush

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