Global Asset Allocation, Politics & Governance, Ecstrat

John-Paul Smith

Global Asset Allocation, Politics & Governance

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.

Cross Asset Strategy

In January’s ‘Government and Markets’ report, we used the themes in the 2016 GEM overview and China outlooks to introduce our intra-GEM country weightings.We provide more detail on each of these countries in the full version of this report, focusing on the economic, financial and structural governance issues that we believe will be the most important market drivers over the course of this year and beyond.

In January’s ‘Government and Markets’ report, we used the themes in the 2016 GEM overview and China outlooks to introduce our intra-GEM country weightings.We provide more detail on each of these countries in the full version of this report, focusing on the economic, financial and structural governance issues that we believe will be the most important market drivers over the course of this year and beyond.

Governance, Valuations and the Crisis of State Capitalism

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.

Thematic (Sector/Industry)

The trouble for India bank credit is not done. We are not believers in the pristine figures at HDFC Bank. Much of it is due to extravagant write-offs, and perhaps lenient loan classifications. After the Reserve Bank of India (RBI) started its review of loan quality, banks are showing significant bad loans.YES Bank may be more private, more savvy and least government-like than others (and ICICI). But the data coming out is not soothing. Its write-offs rose by 87x in the quarter. Its write-offs in…

The trouble for India bank credit is not done. We are not believers in the pristine figures at HDFC Bank. Much of it is due to extravagant write-offs, and perhaps lenient loan classifications. After the Reserve Bank of India (RBI) started its review of loan quality, banks are showing significant bad loans.YES Bank may be more private, more savvy and least government-like than others (and ICICI). But the data coming out is not soothing. Its write-offs rose by 87x in the quarter. Its write-offs in…

India's YES Bank Increases Write-Offs by 87x

Equity Bottom-Up

We are sure that most people have seen Novak Djokovic play tennis.If so, we all know that even he can not place the ball in the far corner of the court, at the baseline, all the time. There are too many variables, and he is not a robot. All the practice in the world will not change this; sometimes he will miss; sometimes other factors will overshadow his competency.But can a bank hit the shot all the time?

We are sure that most people have seen Novak Djokovic play tennis.If so, we all know that even he can not place the ball in the far corner of the court, at the baseline, all the time. There are too many variables, and he is not a robot. All the practice in the world will not change this; sometimes he will miss; sometimes other factors will overshadow his competency.But can a bank hit the shot all the time?

HDFC Bank's Profit Growth Seems Crafted To A Degree

Our bearish outlook for 2016 predicated on the rising risk of a “sudden stop” for China and uncontrolled FX depreciation across EM is unfortunately starting to play out; although markets currently feel very oversold and could rally sharply over the short term, we believe that there is further downside for EM equities in absolute and relative terms over the remainder of the year.

Our bearish outlook for 2016 predicated on the rising risk of a “sudden stop” for China and uncontrolled FX depreciation across EM is unfortunately starting to play out; although markets currently feel very oversold and could rally sharply over the short term, we believe that there is further downside for EM equities in absolute and relative terms over the remainder of the year.

Only three countries in Asia Pacific are seeing NPLs in decline during over the past three to four quarters. The average rate of growth is 20%, which is not overly worrisome, but nonetheless it remains substantial.Indonesia tops the charts due to less well-known banks, and many that are subsidiaries from banks outside the country. On average NPL formation for Indonesia’s listed banks is 87% but when including only the major domestic banks the figure is less dramatic at 31%.  At the very least,…

Only three countries in Asia Pacific are seeing NPLs in decline during over the past three to four quarters. The average rate of growth is 20%, which is not overly worrisome, but nonetheless it remains substantial.Indonesia tops the charts due to less well-known banks, and many that are subsidiaries from banks outside the country. On average NPL formation for Indonesia’s listed banks is 87% but when including only the major domestic banks the figure is less dramatic at 31%.  At the very least,…

India

ICICI Bank Limited operates as a bank. The Bank offers saving accounts, loans, debit, credit cards, insurance, investments, mortgages, and online banking services. ICICI Bank serves customers worldwide.

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ICICI Bank Ltd (ICICIBC IN)

Governance, Valuations and the Crisis of State Capitalism

In January’s ‘Government and Markets’ report, we used the themes in the 2016 GEM overview and China outlooks to introduce our intra-GEM country...

John-Paul Smith

India's YES Bank Increases Write-Offs by 87x

The trouble for India bank credit is not done. We are not believers in the pristine figures at HDFC Bank. Much of it is due to extravagant...

Daniel Tabbush

HDFC Bank's Profit Growth Seems Crafted To A Degree

We are sure that most people have seen Novak Djokovic play tennis.If so, we all know that even he can not place the ball in the far corner of the...

Daniel Tabbush

China and the EM Ugly Contest

Our bearish outlook for 2016 predicated on the rising risk of a “sudden stop” for China and uncontrolled FX depreciation across EM is unfortunately...

John-Paul Smith

A Gradual NPL Cycle in Asia

Only three countries in Asia Pacific are seeing NPLs in decline during over the past three to four quarters. The average rate of growth is 20%,...

Daniel Tabbush

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