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Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Cross Asset Strategy

<ul><li>Electric cars /: China’s EV industry calls on regulators to curb the back-seat driving</li><li>Spacecraft /: China sends first crew into orbit since space station’s completion</li><li>Education /: Strengthen China’s education system to drive innovation, Xi says</li></ul>

Electric cars /: China’s EV industry calls on regulators to curb the back-seat drivingSpacecraft /: China sends first crew into orbit since space station’s completionEducation /: Strengthen China’s education system to drive innovation, Xi says

CX Daily: China’s EV Industry Calls on Regulators to Curb the Back-Seat Driving

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.

Thematic (Sector/Industry)

<ul>
<li>Interest rate risk in the system increased with the Fed’s steep interest rate hikes and due to the opt-out for many US banks on the AFS securities market-to-market capital hit</li>
<li>Uninsured and concentrated deposits, at the first hint of bank trouble, can take flight very quickly especially in the case of concentrated, key elements of the Silicon Vally Bank collapse</li>
<li>We believe that it is premature to look for buy opportunities in US banks, although we believe that the largest US banks are sound in terms of their balance sheets</li>
</ul>


Interest rate risk in the system increased with the Fed’s steep interest rate hikes and due to the opt-out for many US banks on the AFS securities market-to-market capital hit
Uninsured and concentrated deposits, at the first hint of bank trouble, can take flight very quickly especially in the case of concentrated, key elements of the Silicon Vally Bank collapse
We believe that it is premature to look for buy opportunities in US banks, although we believe that the largest US banks are sound in terms of their balance sheets


US Bank Sector Stress – Old Fashioned Risks and a Regulatory Loophole Meet the Digital Age

Founder of Antler Capital

Stanley Tsai, CFA

Macroeconomics

<ul>
<li>The recent rollout of a tax-deferred individual pension scheme marks a pivotal moment in the country's preparation for seismic shifts in its demographics.</li>
<li>The transition towards Pillar 3 of the retirement system has important implications for global asset allocators' long-term China investment thesis.</li>
<li>It's still early days, but there are ways to participate in the growth of private pensions. We look at the scale of the opportunities available and the potential beneficiaries.</li>
</ul>


The recent rollout of a tax-deferred individual pension scheme marks a pivotal moment in the country's preparation for seismic shifts in its demographics.
The transition towards Pillar 3 of the retirement system has important implications for global asset allocators' long-term China investment thesis.
It's still early days, but there are ways to participate in the growth of private pensions. We look at the scale of the opportunities available and the potential beneficiaries.


China's Fledgling Pensions Market: Are You Positioned to Cash In?

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.

<ul>
<li>Two US banks saw more than 80% of their net interest income delta erased by credit costs</li>
<li>Many US banks are seeing sharply higher credit costs in 4Q22 from reversals a year ago</li>
<li>Loan growth is decelerating in 4Q22 compared with 3Q22, not a positive outlook</li>
</ul>


Two US banks saw more than 80% of their net interest income delta erased by credit costs
Many US banks are seeing sharply higher credit costs in 4Q22 from reversals a year ago
Loan growth is decelerating in 4Q22 compared with 3Q22, not a positive outlook


Senior Bank Analyst - Japanese Banks, Windamee Research

J. Brian Waterhouse

Senior Bank Analyst - Japanese Banks

Windamee Research

Japanese Banks

Loan data for August 2021 from both the Japanese Bankers Association (JBA) and the Bank of Japan (BoJ) confirm that YoY loan growth for all Japanese commercial banks is now in negative territory, driven by a sharp YoY decline in lending by the major banks over the last four months.  Even on a month-on-month basis, total lending by Japanese banks has been falling for four out of the last five months.  Credit lines that were drawn down in 2020 as Japan went into nationwide COVID-induced lockdown, but were ultimately largely unneeded, are now being repaid.Interest rates remain at rock bottom, a fact that helps minimize funding costs, while the recovery in the stock market has given the banks some valuable ‘breathing space’ to offset rising credit costs with gains on selling some of the investment portfolio.  Nevertheless, margins remain under intense pressure, pushing core earnings down.  The quality of bank profits therefore continues to deteriorate, even though bottom-line profits for 1H FY3/2022 are likely to exceed most banks’ cautious initial earnings guidance.  That said, we expect few banks to opt to raise their full-year guidance significantly, regardless of 1H FY3/2022 results (due out mid-November).The Japanese banking sector in 2021 has outperformed Topix for the first time in several years, aided by a weakening Yen against the US$.  Yet, as we head into the third quarter of FY3/2022, much of the earlier outperformance by the banking sector against Topix has already been given back.“Caveat Emptor!” (May the Buyer Beware) remains our advice to would-be investors in Japanese bank stocks for the remainder of 2021 and beyond.<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/232/501/original/8300-WR-JBanks-2021-0719-TooLow4Zero-TPNBNKvsTPX+2015-2021.jpg?1632884040" class="editor-image img-responsive" data-smartkarma-image-id="232501"></figure></section>

Loan data for August 2021 from both the Japanese Bankers Association (JBA) and the Bank of Japan (BoJ) confirm that YoY loan growth for all Japanese commercial banks is now in negative territory, driven by a sharp YoY decline in lending by the major banks over the last four months.  Even on a month-on-month basis, total lending by Japanese banks has been falling for four out of the last five months.  Credit lines that were drawn down in 2020 as Japan went into nationwide COVID-induced lockdown, but were ultimately largely unneeded, are now being repaid.Interest rates remain at rock bottom, a fact that helps minimize funding costs, while the recovery in the stock market has given the banks some valuable ‘breathing space’ to offset rising credit costs with gains on selling some of the investment portfolio.  Nevertheless, margins remain under intense pressure, pushing core earnings down.  The quality of bank profits therefore continues to deteriorate, even though bottom-line profits for 1H FY3/2022 are likely to exceed most banks’ cautious initial earnings guidance.  That said, we expect few banks to opt to raise their full-year guidance significantly, regardless of 1H FY3/2022 results (due out mid-November).The Japanese banking sector in 2021 has outperformed Topix for the first time in several years, aided by a weakening Yen against the US$.  Yet, as we head into the third quarter of FY3/2022, much of the earlier outperformance by the banking sector against Topix has already been given back.“Caveat Emptor!” (May the Buyer Beware) remains our advice to would-be investors in Japanese bank stocks for the remainder of 2021 and beyond.

Japanese Bank Lending:  Too Low For Zero

United States

Morgan Stanley, a bank holding company, provides diversified financial services on a worldwide basis.  The Company operates a global securities business which serves individual and institutional investors and investment banking clients. Morgan Stanley also operates a global asset management business.

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Morgan Stanley (MS US)

CX Daily: China’s EV Industry Calls on Regulators to Curb the Back-Seat Driving

Electric cars /: China’s EV industry calls on regulators to curb the back-seat driving Spacecraft /: China sends first crew into orbit since space...

Caixin Global

US Bank Sector Stress – Old Fashioned Risks and a Regulatory Loophole Meet the Digital Age

US bank system strains reflects heightened interest rate risk, exacerbated by uninsured and concentrated deposits at a time of sharply rising...

Victor Galliano

China's Fledgling Pensions Market: Are You Positioned to Cash In?

China's aging population has captured investors' attention of late. What opportunities will shifting demographics bring to the fledgling private...

Stanley Tsai, CFA

US Banks - Slow Going

US banks are seeing a huge increase in their credit costs in 4Q22 and this is wiping out substantially the increase in net interest income. Loan...

Daniel Tabbush

Japanese Bank Lending: Too Low For Zero

Data for August 2021 from both the JBA and the BoJ confirm that YoY loan growth for all Japanese commercial banks has turned negative, driven by a...

J. Brian Waterhouse

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