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 close out our long position on BanBajio as the share price has rallied since July-end and in particular the PE multiple gap has narrowed versus its peers</li>
<li>In terms of PBV ratio, BanBajio’s discount to Banorte has also narrowed and it is now very close to the average discount over the last eighteen months</li>
<li>We expect other fundamental factors to act as a drag on BanBajio’s share price performance versus its peers; its rising cost of risk trends and its eroding net interest margin</li>
</ul>


We close out our long position on BanBajio as the share price has rallied since July-end and in particular the PE multiple gap has narrowed versus its peers
In terms of PBV ratio, BanBajio’s discount to Banorte has also narrowed and it is now very close to the average discount over the last eighteen months
We expect other fundamental factors to act as a drag on BanBajio’s share price performance versus its peers; its rising cost of risk trends and its eroding net interest margin


BanBajio (BBAJIO:MM), Time to Close Out the Long Position

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

<ul>
<li>ChatGPT said: HDFC Bank is now held by 71% of active EM funds — an all-time high, with steady inflows and just one exit in six months.</li>
<li>Aggressive Growth funds show strongest conviction, with multiple holders above a 7% weight.</li>
<li>Post-Merger, HDFC has widened its lead over ICICI and regional peers, cementing its role as EM managers’ core financials exposure.</li>
</ul>


ChatGPT said: HDFC Bank is now held by 71% of active EM funds — an all-time high, with steady inflows and just one exit in six months.
Aggressive Growth funds show strongest conviction, with multiple holders above a 7% weight.
Post-Merger, HDFC has widened its lead over ICICI and regional peers, cementing its role as EM managers’ core financials exposure.


HDFC Bank Limited:  Record Ownership and Dominance Among EM Financials

<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

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)

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Dividend (Yield)	0.00

Grupo Financiero Banorte SAB d (GFNORTEO MF)

BanBajio (BBAJIO:MM), Time to Close Out the Long Position

Closing long position on BanBajio due to share price rally, narrowing PE multiple and PBV ratio gap with peers. Share price outlook impacted by...

Victor Galliano

HDFC Bank Limited: Record Ownership and Dominance Among EM Financials

HDFC Bank has become the core EM financials holding, owned by 71% of funds at record highs. Post-merger strength and Aggressive Growth conviction...

Steven Holden

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

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)

BanBajio (BBAJIO:MM), Time to Close Out the Long Position

​Closing long position on BanBajio due to share price rally, narrowing PE multiple and PBV ratio gap with peers. Share price outlook impacted by...

Victor Galliano

HDFC Bank Limited: Record Ownership and Dominance Among EM Financials

HDFC Bank has become the core EM financials holding, owned by 71% of funds at record highs. Post-merger strength and Aggressive Growth conviction...

Steven Holden

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

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

Closing long position on BanBajio due to share price rally, narrowing PE multiple and PBV ratio gap with peers. Share price outlook impacted by...

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...