Chairman, sgtradex

Tan Chin-Hwee

Chairman

Thematic (Sector/Industry)

On March 31, Hong Kong’s Securities and Futures Appeals Tribunal largely upheld the findings of the Securities and Futures Commission (SFC) against Moody’sInvestors Service. Moody’s has received a public reprimand and an HK$11 million (S$1.9 million) fine for various failings related to a report issued in July of 2011 that searched for “red flags” on various issues for a number of Chinese companies. We, like many others in financial markets across the region, are perplexed both with the SFC’s prosecution of Moody’s and the tribunal’s decision. While the SFC probably feels that it has scored a victory for the market integrity of Hong Kong, it has instead stunted the development of the offshore debt market for Chinese companies,misallocated its own enforcement resources and, intentionally or not, let itself be seen as responding to negative commentary on companies that issue securities in Hong Kong.

On March 31, Hong Kong’s Securities and Futures Appeals Tribunal largely upheld the findings of the Securities and Futures Commission (SFC) against Moody’sInvestors Service. Moody’s has received a public reprimand and an HK$11 million (S$1.9 million) fine for various failings related to a report issued in July of 2011 that searched for “red flags” on various issues for a number of Chinese companies. We, like many others in financial markets across the region, are perplexed both with the SFC’s prosecution of Moody’s and the tribunal’s decision. While the SFC probably feels that it has scored a victory for the market integrity of Hong Kong, it has instead stunted the development of the offshore debt market for Chinese companies,misallocated its own enforcement resources and, intentionally or not, let itself be seen as responding to negative commentary on companies that issue securities in Hong Kong.

I have had the highest respect of SFC  but it may be a dark day for those who engage in the practice of financial research and due diligence with the controversial lawsuit by the regulator SFC in HK against the rating agency Moody's for their piece on China.Lawsuit come in just in time for the movie "10 Years" to achieve the top Movie Award-maybe the producers should have another segment in the Movie about Hong Kong's days as an international financial centre in the past to now a Chinese…

I have had the highest respect of SFC  but it may be a dark day for those who engage in the practice of financial research and due diligence with the controversial lawsuit by the regulator SFC in HK against the rating agency Moody's for their piece on China.Lawsuit come in just in time for the movie "10 Years" to achieve the top Movie Award-maybe the producers should have another segment in the Movie about Hong Kong's days as an international financial centre in the past to now a Chinese…

Moody's Vs SFC - A Dark Day for Hong Kong?

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.

It is strange to see that so many China banks are reporting nearly identical net profit, close to 0% in their just announced 2015 results. We presume there is some posturing and positioning amongst banks, to be sure no single bank is too out of line and reported rates of growth are similarly poor.  Gone are the days of heady growth, which is no surprise, given the ramp up of bad loans, worsening credit growth and pressure on net interest margins. As we look at a few of China’s banks newly…

It is strange to see that so many China banks are reporting nearly identical net profit, close to 0% in their just announced 2015 results. We presume there is some posturing and positioning amongst banks, to be sure no single bank is too out of line and reported rates of growth are similarly poor.  Gone are the days of heady growth, which is no surprise, given the ramp up of bad loans, worsening credit growth and pressure on net interest margins. As we look at a few of China’s banks newly…

China Bank Profit on the Way to Contraction

<ul>
<li>There is a new proposal from BIS that is seeking to change the way banks calculate their operational risk. </li>
<li>The concern they have is the current method is too simplistic and fundamentally flawed. Of course it is; it is simply a percentage based on gross revenue.  
</li>
<li>Operational risk is all about processes, systems and internal controls. While we may not know exactly how any new calculation will look, what is telling is how three China banks compare with three Australian banks.</li>
<li>Is it even in the realm…</li>
</ul>


There is a new proposal from BIS that is seeking to change the way banks calculate their operational risk. 
The concern they have is the current method is too simplistic and fundamentally flawed. Of course it is; it is simply a percentage based on gross revenue.  

Operational risk is all about processes, systems and internal controls. While we may not know exactly how any new calculation will look, what is telling is how three China banks compare with three Australian banks.
Is it even in the realm…


New BIS Proposal on Operational Risk, Comparing China to Australia

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

Risks regarding bill-financing business have recently become a new source of concern for Chinese banks.  Bill-financing frauds seen at both the Agricultural Bank of China, or ABC, and China Citic Bank, or Citic, indicate high operational risks.Since late 2015, the China Banking Regulatory Commission has been strengthening controls by identifying violations, including fraudulent transactions, the use of financing to inflate deposits and loans, and adjustments intended to lower capital charges.  We expect this to negatively affect certain banks with relatively heavy business exposures, including ABC, China Minsheng Bank, or CMBC, and Citic.Analyst: Iris Tan, CFA

Risks regarding bill-financing business have recently become a new source of concern for Chinese banks.  Bill-financing frauds seen at both the Agricultural Bank of China, or ABC, and China Citic Bank, or Citic, indicate high operational risks.Since late 2015, the China Banking Regulatory Commission has been strengthening controls by identifying violations, including fraudulent transactions, the use of financing to inflate deposits and loans, and adjustments intended to lower capital charges.  We expect this to negatively affect certain banks with relatively heavy business exposures, including ABC, China Minsheng Bank, or CMBC, and Citic.Analyst: Iris Tan, CFA 

Tightened Regulations on China's Bill Financing Pose NIM Pressures for Certain Banks

Hong Kong

Guotai Junan International is an integrated financial service provider offering wealth management, institutional investor services, corporate finance, and investment management. Its diverse offerings include brokerage, asset management, and digital asset trading. The company was established in Hong Kong in 1993 and is headquartered there.

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Guotai Junan International (1788 HK)

Hong Kong Beats Moody's but Loses Big

On March 31, Hong Kong’s Securities and Futures Appeals Tribunal largely upheld the findings of the Securities and Futures Commission (SFC) against...

Tan Chin-Hwee

Moody's Vs SFC - A Dark Day for Hong Kong?

I have had the highest respect of SFC but it may be a dark day for those who engage in the practice of financial research and due diligence with...

Tan Chin-Hwee

China Bank Profit on the Way to Contraction

It is strange to see that so many China banks are reporting nearly identical net profit, close to 0% in their just announced 2015 results. We...

Daniel Tabbush

New BIS Proposal on Operational Risk, Comparing China to Australia

There is a new proposal from BIS that is seeking to change the way banks calculate their operational risk. The concern they have is the current...

Daniel Tabbush

Tightened Regulations on China's Bill Financing Pose NIM Pressures for Certain Banks

Risks regarding bill-financing business have recently become a new source of concern for Chinese banks. Bill-financing frauds seen at both the...

Morningstar, Inc.

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