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 stick with our buy on BanBajio but we close out the short on Banorte; the PBV differential between the two narrowed largely due to Banorte’s share price action</li>
<li>BanBajio’s shares reflect that the market was underwhelmed by BanBajio 2Q 2025 results, especially in terms of credit quality, but we believe that this is now largely discounted</li>
<li>BanBajio continues to screen very well against Banorte and the rest of the Mexican bank peer group; in addition, BanBajio ranks top of our scorecard, with Gentera in bottom position</li>
</ul>


We stick with our buy on BanBajio but we close out the short on Banorte; the PBV differential between the two narrowed largely due to Banorte’s share price action
BanBajio’s shares reflect that the market was underwhelmed by BanBajio 2Q 2025 results, especially in terms of credit quality, but we believe that this is now largely discounted
BanBajio continues to screen very well against Banorte and the rest of the Mexican bank peer group; in addition, BanBajio ranks top of our scorecard, with Gentera in bottom position


Mexican Banks – Stick with Buy on BanBajio (BBAJIO:MM), Closing Out the Short on Banorte

<ul>
<li>We stick with our pairs trade long on BanBajio and short on Banorte; we remove BanRegio from buy, as we do not see it to be so compelling on valuations</li>
<li>BanBajio stands out versus both Banorte and Gentera in terms of its PBV ratio discount; in both cases, BanBajio’s PBV discount is c 40%</li>
<li>Based on our updated propietary scorecard, BanBajio remains top with Inbursa bottom of the ranking</li>
</ul>


We stick with our pairs trade long on BanBajio and short on Banorte; we remove BanRegio from buy, as we do not see it to be so compelling on valuations
BanBajio stands out versus both Banorte and Gentera in terms of its PBV ratio discount; in both cases, BanBajio’s PBV discount is c 40%
Based on our updated propietary scorecard, BanBajio remains top with Inbursa bottom of the ranking


Mexican Banks – BanBajio (BBAJIO:MM) Remains the Value Play

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

Cross Asset Strategy

<ul>
<li>Banorte, Wal-Mart de Mexico and B3 SA suffer closures from active Emerging Market funds.</li>
<li>All three suffer some of the larger declines in fund positioning across the LATAM region over the last 6-months.</li>
<li>Despite these closures, Banorte, Wal-Mart de Mexico and B3 SA remain among the top 15 most widely owned stocks in LATAM.</li>
</ul>


Banorte, Wal-Mart de Mexico and B3 SA suffer closures from active Emerging Market funds.
All three suffer some of the larger declines in fund positioning across the LATAM region over the last 6-months.
Despite these closures, Banorte, Wal-Mart de Mexico and B3 SA remain among the top 15 most widely owned stocks in LATAM.


LATAM Reversal: Banorte, Wal-Mart and B3 SA.

<ul>
<li>China, India, Saudi Arabia, and Taiwan remain key underweights.  Recovery in Malaysia, Thailand, Turkey, and South Africa, correction in Indonesia and Mexico. Developed Markets the largest overweight for EM investors.</li>
<li>Discretionary, Staples, and Industrials the key overweights, Materials and Energy the underweights. Rotation out of Tech moves positioning from overweight to underweight for the first time since 2019.</li>
<li>Ownership climbs for Meituan and SK Hynix, Baidu and Yum China see sharp declines. Downtrends persist in Vale, Telkom Indonesia.  Recovery in SK Telekom, Garanti Bank, highs in Emaar Properties. </li>
</ul>


China, India, Saudi Arabia, and Taiwan remain key underweights.  Recovery in Malaysia, Thailand, Turkey, and South Africa, correction in Indonesia and Mexico. Developed Markets the largest overweight for EM investors.
Discretionary, Staples, and Industrials the key overweights, Materials and Energy the underweights. Rotation out of Tech moves positioning from overweight to underweight for the first time since 2019.
Ownership climbs for Meituan and SK Hynix, Baidu and Yum China see sharp declines. Downtrends persist in Vale, Telkom Indonesia.  Recovery in SK Telekom, Garanti Bank, highs in Emaar Properties. 


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>The WisdomTree Emerging Markets High Dividend Index is a fundamentally weighted index that measures the performance of high dividend yield stocks within emerging markets.</li>
<li>The changes at the October rebalance were announced after market close on 4 October with implementation scheduled at the close on 16 October.</li>
<li>There are 241 adds and 208 deletes for the index with an estimated round-trip trade of US$2.5bn. There are many stocks with over 2x ADV to trade.</li>
</ul>


The WisdomTree Emerging Markets High Dividend Index is a fundamentally weighted index that measures the performance of high dividend yield stocks within emerging markets.
The changes at the October rebalance were announced after market close on 4 October with implementation scheduled at the close on 16 October.
There are 241 adds and 208 deletes for the index with an estimated round-trip trade of US$2.5bn. There are many stocks with over 2x ADV to trade.


WisdomTree Emerging Markets High Dividend Index Rebalance: US$2.5bn Round-Trip Trade

Mexico

Grupo Financiero Banorte S.A.B. de C.V. is a financial institution in Mexico. The Company offers banking services, premium banking, wholesale banking, leasing and factoring, warehousing, insurance, pensions and retirement savings.

Grupo Financiero Banorte SAB d (GFNORTEO MF)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Grupo Financiero Banorte SAB d (GFNORTEO MF)

Mexican Banks – Stick with Buy on BanBajio (BBAJIO:MM), Closing Out the Short on Banorte

We maintain buy on BanBajio, close short on Banorte with the PBV discount narrowing due to Banorte price action. BanBajio's underwhelming 2Q...

Victor Galliano

Mexican Banks – BanBajio (BBAJIO:MM) Remains the Value Play

We keep our pairs trade long on scorecard top-rated BanBajio and short on Banorte, removing BanRegio from the buy list. BanBajio's PBV ratio...

Victor Galliano

LATAM Reversal: Banorte, Wal-Mart and B3 SA.

Banorte, Wal-Mart de Mexico and B3 SA suffer closures from active Emerging Market funds as strong positioning momentum finally reverses.

Steven Holden

Active GEM Funds: Positioning Chart Pack

In this chart pack, we highlight the key country, sector and stock exposures among active Emerging Markets equity funds.

Steven Holden

WisdomTree Emerging Markets High Dividend Index Rebalance: US$2.5bn Round-Trip Trade

There are 241 adds/208 deletes for the WisdomTree Emerging Markets High Dividend Index. The round-trip trade is around US$2.5bn and there are a...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Mexican Banks – Stick with Buy on BanBajio (BBAJIO:MM), Closing Out the Short on Banorte

​We maintain buy on BanBajio, close short on Banorte with the PBV discount narrowing due to Banorte price action. BanBajio's underwhelming 2Q...

Victor Galliano

Mexican Banks – BanBajio (BBAJIO:MM) Remains the Value Play

​We keep our pairs trade long on scorecard top-rated BanBajio and short on Banorte, removing BanRegio from the buy list. BanBajio's PBV ratio...

Victor Galliano

LATAM Reversal: Banorte, Wal-Mart and B3 SA.

Banorte, Wal-Mart de Mexico and B3 SA suffer closures from active Emerging Market funds as strong positioning momentum finally reverses.

Steven Holden

Active GEM Funds: Positioning Chart Pack

In this chart pack, we highlight the key country, sector and stock exposures among active Emerging Markets equity funds.

Steven Holden

WisdomTree Emerging Markets High Dividend Index Rebalance: US$2.5bn Round-Trip Trade

There are 241 adds/208 deletes for the WisdomTree Emerging Markets High Dividend Index. The round-trip trade is around US$2.5bn and there are a...

Brian Freitas

We maintain buy on BanBajio, close short on Banorte with the PBV discount narrowing due to Banorte price action. BanBajio's underwhelming 2Q...

We keep our pairs trade long on scorecard top-rated BanBajio and short on Banorte, removing BanRegio from the buy list. BanBajio's PBV ratio...