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.

Equity Bottom-Up

<ul>
<li>Market expectations are for a 25bps rate hike to 1.25% at the BoJ monetary policy meeting this week; we expect BoJ to follow the US Federal Reserve’s 25bp hike today</li>
<li>We take profits on Yokohama removing it from the buy list among our bigger caps universe; we keep Resona Holdings on the buy list along with Kyoto Financial</li>
<li>Resona is best geared to rising rates, and we expect it to deliver higher returns going forward; Kyoto stands out with its high equity holdings relative to its market capitalisation</li>
</ul>


Market expectations are for a 25bps rate hike to 1.25% at the BoJ monetary policy meeting this week; we expect BoJ to follow the US Federal Reserve’s 25bp hike today
We take profits on Yokohama removing it from the buy list among our bigger caps universe; we keep Resona Holdings on the buy list along with Kyoto Financial
Resona is best geared to rising rates, and we expect it to deliver higher returns going forward; Kyoto stands out with its high equity holdings relative to its market capitalisation


Japanese Big Cap Banks – Still Overall Bullish, but Taking Profits on Yokohama Financial

Global Equities, Multi-Asset PM, Dantes Outlook

Damanick Dantes, CMT

Global Equities, Multi-Asset PM

Dantes Outlook

We invest over a full market cycle, using multi-asset portfolios tailored to each global client, from individuals to family offices.

Built to Endure

Cross Asset Strategy

<ul>
<li>
Return dispersion among banks is wide enough to select on. Individual outcomes range from <a href="https://www.smartkarma.com/entities/fukui-bank-ltd" target="_blank" data-smartkarma-citation="entities:9011:1" rel="noopener">Fukui Bank (8362 JP)</a> at +264% to <a href="https://www.smartkarma.com/entities/rakuten-bank-ltd" target="_blank" data-smartkarma-citation="entities:35638:1" rel="noopener">Rakuten Bank (5838 JP)</a> at -23%.</li>
<li>
Leadership is rotating. Money is moving from small cheap regionals back toward larger names.</li>
<li>
We constructed a barbel portfolio. Leg A holds six trend-confirmed momentum leaders. Leg B holds six accelerating laggards.</li>
</ul>



Return dispersion among banks is wide enough to select on. Individual outcomes range from Fukui Bank (8362 JP) at +264% to Rakuten Bank (5838 JP) at -23%.

Leadership is rotating. Money is moving from small cheap regionals back toward larger names.

We constructed a barbel portfolio. Leg A holds six trend-confirmed momentum leaders. Leg B holds six accelerating laggards.


Japanese Banks: Rotating Beneath the Surface

<ul>
<li>Following select Japanese bank visits, we reiterate our buys on Resona Holdings, Yokohama Financial and Shizuoka Financial</li>
<li>We are neutral on the Japanese digital banks, although Rakuten Bank is our preferred neutral of the three</li>
<li>The Iran conflict creates increased volatility in markets; although the timing may be in question, we believe that the BoJ remains on the “up escalator” for policy rates</li>
</ul>


Following select Japanese bank visits, we reiterate our buys on Resona Holdings, Yokohama Financial and Shizuoka Financial
We are neutral on the Japanese digital banks, although Rakuten Bank is our preferred neutral of the three
The Iran conflict creates increased volatility in markets; although the timing may be in question, we believe that the BoJ remains on the “up escalator” for policy rates


Japanese Banks – Update on Bigger Cap and Digital Banks

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)

<ul>
<li>We look at which Japan banks have the most cash which can see a major boost to returns. </li>
<li>Banks with lower margins can see a higher net interest income pick up from rising rates. </li>
<li>Loan growth in Japan has been relatively strong, supportive of rising rates from BOJ.</li>
</ul>


We look at which Japan banks have the most cash which can see a major boost to returns. 
Banks with lower margins can see a higher net interest income pick up from rising rates. 
Loan growth in Japan has been relatively strong, supportive of rising rates from BOJ.


Japan - Rising Rates: Focus On Banks With High Cash And Low Margins

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Regional bank consolidation is on the menu in Japan. Expect more of it.</li>
<li>Intra-Prefecture is the obvious case. In rural prefectures, JA and the Post Bank are credible deposit-taker competition. SME lending is less obvious, though cross-border (neighbouring prefecture) combinations could arise.</li>
<li>A new transaction suggests another combination is on its way. I'd buy.</li>
</ul>


Regional bank consolidation is on the menu in Japan. Expect more of it.
Intra-Prefecture is the obvious case. In rural prefectures, JA and the Post Bank are credible deposit-taker competition. SME lending is less obvious, though cross-border (neighbouring prefecture) combinations could arise.
A new transaction suggests another combination is on its way. I'd buy.


[Japan M&A] Regional Bank Consolidation Efforts May Pick Up

Japan

Resona Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, provides financial services, including banking, trust operations, and credit card services. Resona Holdings also offers consulting services related to personal loans, asset management, and asset succession.

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Resona Holdings (8308 JP)

Japanese Big Cap Banks – Still Overall Bullish, but Taking Profits on Yokohama Financial

Resona's well geared to rising rates and we expect improving returns, Kyoto has high equity holdings relative to its market cap; we keep Resona,...

Victor Galliano

Japanese Banks: Rotating Beneath the Surface

Japanese banks are outperforming, although dispersion is wide. There's a rotation between small/large and cheap/expensive, so we built a barbel...

Damanick Dantes, CMT

Japanese Banks – Update on Bigger Cap and Digital Banks

Reiterating buys on Resona, Yokohama and Shizuoka post selective bank visits, whilst being neutral on digital banks; amid Iran conflict...

Victor Galliano

Japan - Rising Rates: Focus On Banks With High Cash And Low Margins

BOJ to meet 23-24 Jan and likely to raise rates possibly by doubling short-term rates, from 0.25% to 0.50%. There are important implications for...

Daniel Tabbush

[Japan M&A] Regional Bank Consolidation Efforts May Pick Up

Japan regional bank consolidation will continue. We may have a new candidate. I'd be long the small target in this case, assuming that value will out.

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japanese Big Cap Banks – Still Overall Bullish, but Taking Profits on Yokohama Financial

Resona's well geared to rising rates and we expect improving returns, Kyoto has high equity holdings relative to its market cap; we keep Resona,...

Victor Galliano

Japanese Banks: Rotating Beneath the Surface

Japanese banks are outperforming, although dispersion is wide. There's a rotation between small/large and cheap/expensive, so we built a barbel...

Damanick Dantes, CMT

Japanese Banks – Update on Bigger Cap and Digital Banks

​Reiterating buys on Resona, Yokohama and Shizuoka post selective bank visits, whilst being neutral on digital banks; amid Iran conflict...

Victor Galliano

Japan - Rising Rates: Focus On Banks With High Cash And Low Margins

BOJ to meet 23-24 Jan and likely to raise rates possibly by doubling short-term rates, from 0.25% to 0.50%. There are important implications for...

Daniel Tabbush

[Japan M&A] Regional Bank Consolidation Efforts May Pick Up

Japan regional bank consolidation will continue. We may have a new candidate. I'd be long the small target in this case, assuming that value will out.

Travis Lundy

Reiterating buys on Resona, Yokohama and Shizuoka post selective bank visits, whilst being neutral on digital banks; amid Iran conflict...