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)

We are the first to admit, that <a href="https://www.smartkarma.com/entities/113" target="_blank" data-smartkarma-citation="entities:113:1">United Overseas Bank Ltd (UOB SP)</a> core income drivers in 1Q18 were good. Funding cost growth was relatively subdued compared with interest income growth. If this lasts, it would be a positive, although there can be a lag with rates and term deposit costs. Basic loan-related fees and wealth management income drove non-interest income, and unlike for <a href="https://www.smartkarma.com/entities/22" target="_blank" data-smartkarma-citation="entities:22:1">DBS Group Holdings Ltd (DBS SP)</a>, net trading income was down significantly for UOB. This line item, therefor does not…

We are the first to admit, that United Overseas Bank Ltd (UOB SP) core income drivers in 1Q18 were good. Funding cost growth was relatively subdued compared with interest income growth. If this lasts, it would be a positive, although there can be a lag with rates and term deposit costs. Basic loan-related fees and wealth management income drove non-interest income, and unlike for DBS Group Holdings Ltd (DBS SP), net trading income was down significantly for UOB. This line item, therefor does not…

Singapore Banks – Operational Positives at UOB Should Not Conceal Credit Quality Realities

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

<ul>
<li>
DBS, OCBC and UOB averaged 8% gains in April-to-date, bringing average YTD total returns to 14%, and 12 month average total returns to 50%. April has seen the three banks trade at all-time highs, with DBS recently trading at a high of S$30.00.
</li>
<li>
The three banks currently average a 1.5x P/B, above the 10 year average P/B, and in-line with the 20 year average. In the YTD institutional investors were net buyers of the three banks, with inflows totalling S$1.12 billion, following net inflows of S$3.39…</li>
</ul>



DBS, OCBC and UOB averaged 8% gains in April-to-date, bringing average YTD total returns to 14%, and 12 month average total returns to 50%. April has seen the three banks trade at all-time highs, with DBS recently trading at a high of S$30.00.


The three banks currently average a 1.5x P/B, above the 10 year average P/B, and in-line with the 20 year average. In the YTD institutional investors were net buyers of the three banks, with inflows totalling S$1.12 billion, following net inflows of S$3.39…


DBS, OCBC & UOB Average 50% Returns Over Past 12M

If oil re-exports will support Singapore-based oil and gas service companies, than recent data is not positive. While there is growth YoY, Singapore’s oil re-exports have not been lower in any month in the last 11 years, at S$347 million as at 1 February 2018. We believe the general view is that rising oil prices is helping companies exposed to this sector in Singapore, but the data here does not suggest this is the case.  While the scope of this note is not to examine if other countries are…

If oil re-exports will support Singapore-based oil and gas service companies, than recent data is not positive. While there is growth YoY, Singapore’s oil re-exports have not been lower in any month in the last 11 years, at S$347 million as at 1 February 2018. We believe the general view is that rising oil prices is helping companies exposed to this sector in Singapore, but the data here does not suggest this is the case.  While the scope of this note is not to examine if other countries are…

Singapore Banks - Fading Oil Exports, Loan Growth

Singapore and emerging market real estate

Royston Foo

The General Offer by Yanlord Perennial for UEL's shares ended without much success. What is next for UEL? We tried to put ourselves in the position of YPI and simulated a strategy to extract the greatest value both for YPI and the rest of the shareholders. We think that there are exciting days ahead for this centennial company.We have a long-term buy recommendation on UEL with an intrinsic value of S$3.26 to S$3.55 per share. Investors should look at opportunities to accumulate UEL on dips, especially at prices close to or below the MGO price of S$2.60 per share for margin of safety.This report has 3 sections:Part 1 - Background of UELPart 2 - Analysis of the Yanlord Perennial Takeover offerPart 3 - Valuation and Recommendation

The General Offer by Yanlord Perennial for UEL's shares ended without much success. What is next for UEL? We tried to put ourselves in the position of YPI and simulated a strategy to extract the greatest value both for YPI and the rest of the shareholders. We think that there are exciting days ahead for this centennial company.We have a long-term buy recommendation on UEL with an intrinsic value of S$3.26 to S$3.55 per share. Investors should look at opportunities to accumulate UEL on dips, especially at prices close to or below the MGO price of S$2.60 per share for margin of safety.This report has 3 sections:Part 1 - Background of UELPart 2 - Analysis of the Yanlord Perennial Takeover offerPart 3 - Valuation and Recommendation

United Engineers: Life After Takeover Offer (Part 2)

Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

* Fundamentals at Standard Chartered Bank (Hong Kong) [SCBHK] have improved over the past several years. However, SCBHK has aggressively pulled on various non-core, low quality sources of revenue in order to buoy Standard Chartered’s (2888.HK/STAN.LN) profits  - making them look better than they otherwise would have.* There is some strain on SCBHK’s capital position. Our burn-down analysis suggests that SCBHK is already close to the 2019 Basel III floor level for Common Equity Tier 1 (CET1) capital. As such, on top of concerns over IFRS 9, Basel III/IV, and regulatory penalties - Standard Chartered may need to worry about capital at risk in its Hong Kong franchise prior to re-instituting a dividend.

* Fundamentals at Standard Chartered Bank (Hong Kong) [SCBHK] have improved over the past several years. However, SCBHK has aggressively pulled on various non-core, low quality sources of revenue in order to buoy Standard Chartered’s (2888.HK/STAN.LN) profits  - making them look better than they otherwise would have.* There is some strain on SCBHK’s capital position. Our burn-down analysis suggests that SCBHK is already close to the 2019 Basel III floor level for Common Equity Tier 1 (CET1) capital. As such, on top of concerns over IFRS 9, Basel III/IV, and regulatory penalties - Standard Chartered may need to worry about capital at risk in its Hong Kong franchise prior to re-instituting a dividend.  

Standard Chartered (Hong Kong) – A Messy Flagship

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

OCBC (OCBC SP)

Singapore Banks – Operational Positives at UOB Should Not Conceal Credit Quality Realities

We are the first to admit, that United Overseas Bank Ltd (UOB SP) core income drivers in 1Q18 were good. Funding cost growth was relatively subdued...

Daniel Tabbush

DBS, OCBC & UOB Average 50% Returns Over Past 12M

DBS, OCBC and UOB averaged 8% gains in April-to-date, bringing average YTD total returns to 14%, and 12 month average total returns to 50%. April...

Singapore Exchange Ltd (SGX)

Singapore Banks - Fading Oil Exports, Loan Growth

If oil re-exports will support Singapore-based oil and gas service companies, than recent data is not positive. While there is growth YoY,...

Daniel Tabbush

United Engineers: Life After Takeover Offer (Part 2)

The General Offer by Yanlord Perennial for UEL's shares ended without much success. What is next for UEL? We tried to put ourselves in the position...

Royston Foo

Standard Chartered (Hong Kong) – A Messy Flagship

* Fundamentals at Standard Chartered Bank (Hong Kong) [SCBHK] have improved over the past several years. However, SCBHK has aggressively pulled on...

Thomas J. Monaco

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)