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)

It is still difficult to digest the optimism in some commentary regarding true underlying financial health. Adding to the regime of onerous banking regulations is an environment of economic and financial fear. The decline in U.S. 10 year bond yields this year alone is testimony to this. Negative interest rates in Japan, EU, and Sweden, suggests the growth outlook is terrible.Remember when the world was waiting for rising U.S. rates and normalization of higher rates globally? This was when the world’s overly liquid banks would start to print money; earning an immediately higher spread on their excess deposits. It is not happening. It is more like the opposite now.

It is still difficult to digest the optimism in some commentary regarding true underlying financial health. Adding to the regime of onerous banking regulations is an environment of economic and financial fear. The decline in U.S. 10 year bond yields this year alone is testimony to this. Negative interest rates in Japan, EU, and Sweden, suggests the growth outlook is terrible.Remember when the world was waiting for rising U.S. rates and normalization of higher rates globally? This was when the world’s overly liquid banks would start to print money; earning an immediately higher spread on their excess deposits. It is not happening. It is more like the opposite now.

FX Strategist

Greg Gibbs

Fundamental analysis of topical themes in FX

Amplifying Global FX Capital

Amplifying Global FX Capital was founded in 2015 and is fully owned by Greg Gibbs. It is a registered company both in Australia and Colorado, USA and is a licensed in Australia to provide financial services.

We are producing a regular trading view orientated macroeconomic analysis of topical themes in global financial markets, with a particular focus on foreign exchange. We invite you to view an “executive summary” of these reports in “AmpGFX Reports” under our “Research” menu.

These reports are drawn from the analysis of Greg Gibbs and inform the capital management he undertakes on behalf of the company. The trading performance is posted periodically on our website. We aim to build our company into both a research and capital management business. We are currently in the planning phase for managing capital for wholesale customers.

Greg Gibbs has spent his working life of more than 26 years in financial markets, beginning in 1989 at the Reserve Bank of Australia, after completing a Bachelor of Economics Degree (Honours) at the Australian National University. He has been a CFA Charterholder since 2005. He has worked in Sydney, Singapore, New York and London for major global banks and presented on foreign exchange markets to major financial institutions and companies around the world, and maintained a high profile in the financial media.

Before Amplifying Global FX Capital, Greg was the Head of Asia Pacific Market Strategy at the Royal Bank of Scotland based Singapore. He now resides in Breckenridge Colorado.

Macroeconomics

All major equities are again below the lows in 2015 after a dead-cat bounce sending another body-blow to global investor confidence.  Bottom fishers will be tentative and choppy bearish markets are likely to persist.  Financials (led by Europe) are leading the falls in equities; regulatory pressure implemented in the wake of the global and Eurozone financial crises and litigation and compliance costs since the LIBOR and FX fixing scandals are coming home to roost and creating an echo of the financial stress that undermined global economic confidence in the crises of the last decade.  EUR is whippy as investors cope with Euro-centric financial sector stress, but this is only likely to embolden the ECB to adopt more aggressive policy easing measures.  It is possible they emulate the BoJ and adopt a tiered cash rate policy resplendent with a much lower more negative marginal cash rate.  The outcome would be much lower yields across the EUR curve and a weaker EUR (we much prefer to sell EUR against Gold; as discussed in our previous two reports). Australia has proven resilient to global economic and financial stress, but its banks are being infected by global pressures, and we see a significant risk that RBA scope to cut rates turns into an obligation before long.  We see a fallback in the AUD (again we prefer to sell against gold).

All major equities are again below the lows in 2015 after a dead-cat bounce sending another body-blow to global investor confidence.  Bottom fishers will be tentative and choppy bearish markets are likely to persist.  Financials (led by Europe) are leading the falls in equities; regulatory pressure implemented in the wake of the global and Eurozone financial crises and litigation and compliance costs since the LIBOR and FX fixing scandals are coming home to roost and creating an echo of the financial stress that undermined global economic confidence in the crises of the last decade.  EUR is whippy as investors cope with Euro-centric financial sector stress, but this is only likely to embolden the ECB to adopt more aggressive policy easing measures.  It is possible they emulate the BoJ and adopt a tiered cash rate policy resplendent with a much lower more negative marginal cash rate.  The outcome would be much lower yields across the EUR curve and a weaker EUR (we much prefer to sell EUR against Gold; as discussed in our previous two reports). Australia has proven resilient to global economic and financial stress, but its banks are being infected by global pressures, and we see a significant risk that RBA scope to cut rates turns into an obligation before long.  We see a fallback in the AUD (again we prefer to sell against gold).

AmpGFX - Dead-Cats and Body Blows, Financial Crisis Echo, RBA Scope to Become Obligation

Global Macro Strategy

Callum Henderson

* The BoJ shocked the market, cutting rates to negative and threatening further rate cuts if needed* The apparent change in BoJ stance has to be viewed in the wake of the ECB and Fed statements* The BoJ rate cut is a de facto protest of tighter Japanese monetary conditions due to JPY strength* Leveraged funds on the CFTC had the largest long JPY position ahead of this since October 2012* Recent JPY gains are likely to retrace over the next few weeks, notably against AUD, INR and KRW

* The BoJ shocked the market, cutting rates to negative and threatening further rate cuts if needed* The apparent change in BoJ stance has to be viewed in the wake of the ECB and Fed statements* The BoJ rate cut is a de facto protest of tighter Japanese monetary conditions due to JPY strength* Leveraged funds on the CFTC had the largest long JPY position ahead of this since October 2012* Recent JPY gains are likely to retrace over the next few weeks, notably against AUD, INR and KRW

Asia Calling: From Currency Wars to Competitive Monetary Easing

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,…

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Equity Capital Markets

Japan Post Holdings / Equity Capital Markets

Japan Post Insurance and Japan Post Bank priced at the top end of the range. The FT headline a month ago was  <a href="http://www.ft.com/intl/cms/s/0/1aea16e2-636c-11e5-9846-de406ccb37f2.html" target="_blank">Japan Post faces tough sell for $11.5bn IPO</a>. My <a href="http://www.smartkarma.com/insights/japan-post-holdings-the-post-ipo-details-make-for-interesting-possibilities" target="_blank">first</a> and <a href="http://www.smartkarma.com/insights/japan-post-group-bookbuilding-said-mixed-but-know-your-details" target="_blank">second</a> pieces suggested that was not likely to be the case and indeed demand has come through. The breakdown of which brokers could allocate what indicates the deal is highly likely to have been relatively 'well-placed' with lots of anecdotal evidence of very low allocations to the internet-savvy and flippers and higher allocations to those who put in through NISA accounts, "sets" of shares, and brick-and-mortar brokers. In addition, secondary market demand in the first several weeks after listing is likely to be robust for a number of reasons discussed below. Gray market indications and opening price prediction services appear to suggest opening prints in the +10% to +15% range.I would not want to be short that number. More below the fold.

Japan Post Insurance and Japan Post Bank priced at the top end of the range. The FT headline a month ago was  Japan Post faces tough sell for $11.5bn IPO. My first and second pieces suggested that was not likely to be the case and indeed demand has come through. The breakdown of which brokers could allocate what indicates the deal is highly likely to have been relatively 'well-placed' with lots of anecdotal evidence of very low allocations to the internet-savvy and flippers and higher allocations to those who put in through NISA accounts, "sets" of shares, and brick-and-mortar brokers. In addition, secondary market demand in the first several weeks after listing is likely to be robust for a number of reasons discussed below. Gray market indications and opening price prediction services appear to suggest opening prints in the +10% to +15% range.I would not want to be short that number. More below the fold.

Japan Post Group Demand Update - JPI & JPB Price at the Top: JPH Likely Will Too

Japan

Japan Post Insurance Co. Ltd. operates life insurance business. The Company offers whole life insurance, education endowment, ordinary endowment, medical insurance, and special endowment insurance. Japan Post Insurance provides services for individuals and businesses throughout Japan.

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Japan Post Insurance (7181 JP)

Asian Banks – Risks Remain Plentiful

It is still difficult to digest the optimism in some commentary regarding true underlying financial health. Adding to the regime of onerous banking...

Daniel Tabbush

AmpGFX - Dead-Cats and Body Blows, Financial Crisis Echo, RBA Scope to Become Obligation

All major equities are again below the lows in 2015 after a dead-cat bounce sending another body-blow to global investor confidence. Bottom...

Greg Gibbs

Asia Calling: From Currency Wars to Competitive Monetary Easing

* The BoJ shocked the market, cutting rates to negative and threatening further rate cuts if needed* The apparent change in BoJ stance has to be...

Callum Henderson

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

Japan Post Group Demand Update - JPI & JPB Price at the Top: JPH Likely Will Too

Japan Post Insurance and Japan Post Bank priced at the top end of the range. The FT headline a month ago was Japan Post faces tough sell for...

Travis Lundy

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