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.

Equity Bottom-Up

<ul><li>Perhaps the old thinking, of DBS Group Holdings being safe and conservative is outdated.</li><li>Its bad loan experience in China is amongst the worst in the country.</li><li>There are 59 banks there with a lower bad loan ratio than DBS Bank (China).</li><li>While in India it is reporting a loss, with bad loans at nearly 8% of total.</li><li>Its credit costs in India have been higher than operating profit for the past two years.</li><li>Perhaps its time to look a bit closer at these subsidiaries, and at the same time, reconsider the long-held perception of this stalwart SE Asian bank?</li></ul>Full report below the fold....

Perhaps the old thinking, of DBS Group Holdings being safe and conservative is outdated.Its bad loan experience in China is amongst the worst in the country.There are 59 banks there with a lower bad loan ratio than DBS Bank (China).While in India it is reporting a loss, with bad loans at nearly 8% of total.Its credit costs in India have been higher than operating profit for the past two years.Perhaps its time to look a bit closer at these subsidiaries, and at the same time, reconsider the long-held perception of this stalwart SE Asian bank?Full report below the fold....

Freelance Research Analyst

Tay Hock Meng

Thematic (Sector/Industry)

The ruling Peoples&rsquo; Action Party (PAP) has gotten an overwhelming voters&rsquo; endorsement following the conclusion of the jubilee year GE on September 11. One of the questions investors and homeowners might be asking, will the government be lifting any property measures, and if so, which are the measures that could be lifted?

The ruling Peoples&rsquo; Action Party (PAP) has gotten an overwhelming voters&rsquo; endorsement following the conclusion of the jubilee year GE on September 11. One of the questions investors and homeowners might be asking, will the government be lifting any property measures, and if so, which are the measures that could be lifted?

Post Singapore General Election (GE), what's next for residential property market?

The government introduced the new Urban Redevelopment Authority (URA) Master Plan 2014 which spelt out various initiatives to enhance and transform the way we live and work in urban cities like Singapore. One of the main objectives under the Master Plan is to enhance mobility, and bringing jobs closer to home through a network of park connectors, and integrated transport infrastructure.Under the Master Plan, there are five new regional centres being identified by the government to spur development of regional urban centres, and moving towards decentralisation. These five regional centres being identified are Woodlands Regional Centre, the Jurong Lake District, the City Centre, Paya Lebar Central, and the Punggol Creative Cluster and Learning Corridor. These regional centres have relatively high population densities and are specifically targeted for many new infrastructure developments that will be introduced over the next few years.A look at some of the potential investment opportunities of each regional centre based on one-year percentage $ psf changes of each real estate segment:&nbsp;

The government introduced the new Urban Redevelopment Authority (URA) Master Plan 2014 which spelt out various initiatives to enhance and transform the way we live and work in urban cities like Singapore. One of the main objectives under the Master Plan is to enhance mobility, and bringing jobs closer to home through a network of park connectors, and integrated transport infrastructure.Under the Master Plan, there are five new regional centres being identified by the government to spur development of regional urban centres, and moving towards decentralisation. These five regional centres being identified are Woodlands Regional Centre, the Jurong Lake District, the City Centre, Paya Lebar Central, and the Punggol Creative Cluster and Learning Corridor. These regional centres have relatively high population densities and are specifically targeted for many new infrastructure developments that will be introduced over the next few years.A look at some of the potential investment opportunities of each regional centre based on one-year percentage $ psf changes of each real estate segment:&nbsp;

New development growth strategies under URA Master Plan 2014

<ul><li>We should not forget about the latent, but hidden risk facing banks off balance sheet.</li><li>In a crisis, when banks become risk averse, and where companies find economic circumstances changing radically, there is more risk that these so-called off balance sheet items move on-balance sheet. Unwittingly.</li><li>This can result in a spur of unwanted loan growth for banks, and it also something to watch for. High loan growth at a time of risk aversion can simply be the off balance sheet moving on balance sheet. This is generally poor quality growth.</li><li>Some banks traditionally touted as safe havens have surprisingly high Off Balance Sheet Liabilities to Equity.&nbsp;It is impossible to say if these banks will face difficulties with customers drawing down on these off balance sheet facilities or not, but holding all else equal, these banks are far more exposed vs. capital than others in Asia.</li></ul>More below the fold....&nbsp;

We should not forget about the latent, but hidden risk facing banks off balance sheet.In a crisis, when banks become risk averse, and where companies find economic circumstances changing radically, there is more risk that these so-called off balance sheet items move on-balance sheet. Unwittingly.This can result in a spur of unwanted loan growth for banks, and it also something to watch for. High loan growth at a time of risk aversion can simply be the off balance sheet moving on balance sheet. This is generally poor quality growth.Some banks traditionally touted as safe havens have surprisingly high Off Balance Sheet Liabilities to Equity.&nbsp;It is impossible to say if these banks will face difficulties with customers drawing down on these off balance sheet facilities or not, but holding all else equal, these banks are far more exposed vs. capital than others in Asia.More below the fold....&nbsp;

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.
​
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

&lsquo;Pay no attention to that man behind the curtain&rsquo;&nbsp;- Wizard of OzThe nature and scale of Beijing&rsquo;s reaction to the bursting of the China equity bubble should dispel two of the three myths which supposedly justified the bull market, namely that the administration was in firm control of events and that it was intent on implementing a programme of liberal reforms towards the economy and financial markets.The one remaining myth, which is still being propagated by the China bulls, is that despite the continuing growth slowdown, the underlying state of the Chinese economy is sound. Mark is currently undertaking a study of the financial characteristics of the Chinese corporate sector, which we intend to publish in early September. For this piece I am taking some of his preliminary findings to illustrate the fault lines, which exist through the Chinese economy and which continue to underpin our bearish view towards the Chinese economy and equity market.

&lsquo;Pay no attention to that man behind the curtain&rsquo;&nbsp;- Wizard of OzThe nature and scale of Beijing&rsquo;s reaction to the bursting of the China equity bubble should dispel two of the three myths which supposedly justified the bull market, namely that the administration was in firm control of events and that it was intent on implementing a programme of liberal reforms towards the economy and financial markets.The one remaining myth, which is still being propagated by the China bulls, is that despite the continuing growth slowdown, the underlying state of the Chinese economy is sound. Mark is currently undertaking a study of the financial characteristics of the Chinese corporate sector, which we intend to publish in early September. For this piece I am taking some of his preliminary findings to illustrate the fault lines, which exist through the Chinese economy and which continue to underpin our bearish view towards the Chinese economy and equity market.

CHINA: Reform & Omnipotence Myths Dispelled

Singapore

Oversea-Chinese Banking Corporation Limited offers a comprehensive range of financial services.  The Company's services include deposit-taking, corporate, enterprise and personal lending, international trade financing, investment banking, private banking, treasury, stockbroking, insurance, credit cards, cash management, asset management and other financial and related services.

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OCBC (OCBC SP)

DBS surprises with risk in China, India

Perhaps the old thinking, of DBS Group Holdings being safe and conservative is outdated. Its bad loan experience in China is amongst the worst in...

Daniel Tabbush

Post Singapore General Election (GE), what's next for residential property market?

The ruling Peoples’ Action Party (PAP) has gotten an overwhelming voters’ endorsement following the conclusion of the jubilee year GE on September...

Tay Hock Meng

New development growth strategies under URA Master Plan 2014

The government introduced the new Urban Redevelopment Authority (URA) Master Plan 2014 which spelt out various initiatives to enhance and transform...

Tay Hock Meng

Beware of Banks' Off Balance Sheet Risk

We should not forget about the latent, but hidden risk facing banks off balance sheet. In a crisis, when banks become risk averse, and where...

Daniel Tabbush

CHINA: Reform & Omnipotence Myths Dispelled

‘Pay no attention to that man behind the curtain’ - Wizard of OzThe nature and scale of Beijing’s reaction to the bursting of the China equity...

John-Paul Smith

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