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>There are many simple domestic banks that can shine in a complex world</li>
<li>Outside of the largest banks in many regions, there are uncovered gems</li>
<li>This lessor known bank in Philippines has seen dramatic profit growth</li>
</ul>


There are many simple domestic banks that can shine in a complex world
Outside of the largest banks in many regions, there are uncovered gems
This lessor known bank in Philippines has seen dramatic profit growth


Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/emperador-inc" target="_blank" data-smartkarma-citation="entities:3485:1" rel="noopener">Emperador Inc (EMP PM)</a> and <a href="https://www.smartkarma.com/entities/monde-nissin-corp" target="_blank" data-smartkarma-citation="entities:32188:1" rel="noopener">Monde Nissin Corp (MONDE PM)</a> will replace <a href="https://www.smartkarma.com/entities/bloomberry-resorts-corp" target="_blank" data-smartkarma-citation="entities:17961:1" rel="noopener">Bloomberry Resorts (BLOOM PM)</a> and <a href="https://www.smartkarma.com/entities/robinsons-retail-holdings-inc" target="_blank" data-smartkarma-citation="entities:10598:1" rel="noopener">Robinsons Retail Holdings (RRHI PM)</a> in the <a href="https://www.smartkarma.com/entities/philippines-stock-exchange-psei-index" target="_blank" data-smartkarma-citation="entities:22912:1" rel="noopener">Philippines Stock Exchange PSEi Index (PCOMP)</a>.</li>
<li>There will be a lot to trade from passive funds. Implementation will take place at the close on 11 February - there are only 5 days to go.</li>
<li>
<a href="https://www.smartkarma.com/entities/emperador-inc" target="_blank" data-smartkarma-citation="entities:3485:1" rel="noopener">Emperador Inc (EMP PM)</a> has rallied over the last month while the deletions have traded lower. As re-opening plays, the passive selling could provide an opportunity to buy the deletes.</li>
</ul>



Emperador Inc (EMP PM) and Monde Nissin Corp (MONDE PM) will replace Bloomberry Resorts (BLOOM PM) and Robinsons Retail Holdings (RRHI PM) in the Philippines Stock Exchange PSEi Index (PCOMP).
There will be a lot to trade from passive funds. Implementation will take place at the close on 11 February - there are only 5 days to go.

Emperador Inc (EMP PM) has rallied over the last month while the deletions have traded lower. As re-opening plays, the passive selling could provide an opportunity to buy the deletes.


PCOMP Index Rebalance: EMP, MONDE Could Pop; BLOOM, RRHI Could Drop

<ul>
<li>We see three potential changes to the <a href="https://www.smartkarma.com/entities/philippines-stock-exchange-psei-index" target="_blank" data-smartkarma-citation="entities:22912:1" rel="noopener">Philippines Stock Exchange PSEi Index (PCOMP INDEX)</a> at the February rebalance. Two are higher probability changes, while one has a lower probability.</li>
<li>Typically, the inclusions rally and the deletions drop between announcement and implementation with a big jump immediately post announcement. Pre-positioning prior to announcement is important.</li>
<li>
<a href="https://www.smartkarma.com/entities/bloomberry-resorts-corp" target="_blank" data-smartkarma-citation="entities:17961:1" rel="noopener">Bloomberry Resorts (BLOOM PM)</a> and <a href="https://www.smartkarma.com/entities/robinsons-retail-holdings-inc" target="_blank" data-smartkarma-citation="entities:10598:1" rel="noopener">Robinsons Retail Holdings (RRHI PM)</a> are reopening plays and investors that are looking to buy the stocks could wait for index deletion to get liquidity.</li>
</ul>


We see three potential changes to the Philippines Stock Exchange PSEi Index (PCOMP INDEX) at the February rebalance. Two are higher probability changes, while one has a lower probability.
Typically, the inclusions rally and the deletions drop between announcement and implementation with a big jump immediately post announcement. Pre-positioning prior to announcement is important.

Bloomberry Resorts (BLOOM PM) and Robinsons Retail Holdings (RRHI PM) are reopening plays and investors that are looking to buy the stocks could wait for index deletion to get liquidity.


PCOMP Index Rebalance Preview Feb22: Three Potential Changes & Large Impact

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Metropolitan Bank & Trust / Equity Bottom-Up

<div id="sports_article_writeup">
<p>On the <a href="https://www.phcc.gov.ph/press-releases/banks-mca-moa/" target="_blank" rel="noopener">5 November</a>, Bangko Sentral ng Pilipinas (BSP - the central bank of the Philippines), the Securities and Exchange Commission, Philippine Competition Commission (PCC), Philippine Deposit Insurance Corp, and the Cooperative Development Authority signed a multi-agency agreement to streamline the merger, consolidation, and acquisition (MCA) process to encourage consolidation in the banking sector.</p>
<p>BSP Governor Benjamin Diokno said the agreement "<em>aims to streamline processes, reduce processing time, and facilitate prompt action of applications for mergers, consolidations, and acquisitions</em>". PCC's Arsenio Balisacan added: "<em>We acknowledge that mergers, consolidations, and acquisitions can catalyse innovation in any industry, including banking, because of combined resources and expertise". </em></p>
<p>The agreement, in effect, harmonizes the paperwork across the various regulators, by reducing the number of documentary requirements to 30 from 58, which in turn lowers the total processing time to an expected 55 business days from an average of 160 business days currently.</p>
<p>According to the <a href="https://www.phcc.gov.ph/press-releases/banks-mca-moa/" target="_blank" rel="noopener">PCC</a>, the "<em>Implementing Guidelines on the procedures for MCA applications will subsequently be issued via a Joint Circular by the partner-agencies</em>".</p>
<div id="inserted_instream">
<div id="gpt-ad-Instream_Video">For years, the various regulators have aimed to consolidate the Philippines' highly fragmented banking sector comprising mostly small rural lenders. Such inefficiencies have led to nine problematic banks being shut this year, including BSP's recent order to close United People’s Rural Bank Inc.</div>
<div></div>
<div>The accord was also promulgated after the BSP stopped accepting digital banking license applications from 1 September 2021, with the number of digital lenders expected to be capped at seven for the next three years.</div>
<div></div>
</div>
<div>The question is: who stands to benefit from this MCA streamlining?</div>
</div>
<p></p>
<hr>
<div id="sports_article_writeup">
<div><em>For more on M&amp;A in the Philippines, please see the <a href="https://www.smartkarma.com/insights/quiddity-philippines-m-a-guide-2019" target="_blank" data-smartkarma-citation="insights:31122" rel="noopener">Quiddity Philippines M&amp;A Guide 2019</a>. </em></div>
</div>
<div id="article_leaderboard">
<div id="gpt-ad-Leaderboard_Article_Footer"></div>
</div>


On the 5 November, Bangko Sentral ng Pilipinas (BSP - the central bank of the Philippines), the Securities and Exchange Commission, Philippine Competition Commission (PCC), Philippine Deposit Insurance Corp, and the Cooperative Development Authority signed a multi-agency agreement to streamline the merger, consolidation, and acquisition (MCA) process to encourage consolidation in the banking sector.
BSP Governor Benjamin Diokno said the agreement "aims to streamline processes, reduce processing time, and facilitate prompt action of applications for mergers, consolidations, and acquisitions". PCC's Arsenio Balisacan added: "We acknowledge that mergers, consolidations, and acquisitions can catalyse innovation in any industry, including banking, because of combined resources and expertise". 
The agreement, in effect, harmonizes the paperwork across the various regulators, by reducing the number of documentary requirements to 30 from 58, which in turn lowers the total processing time to an expected 55 business days from an average of 160 business days currently.
According to the PCC, the "Implementing Guidelines on the procedures for MCA applications will subsequently be issued via a Joint Circular by the partner-agencies".

For years, the various regulators have aimed to consolidate the Philippines' highly fragmented banking sector comprising mostly small rural lenders. Such inefficiencies have led to nine problematic banks being shut this year, including BSP's recent order to close United People’s Rural Bank Inc.

The accord was also promulgated after the BSP stopped accepting digital banking license applications from 1 September 2021, with the number of digital lenders expected to be capped at seven for the next three years.


The question is: who stands to benefit from this MCA streamlining?




For more on M&amp;A in the Philippines, please see the Quiddity Philippines M&amp;A Guide 2019. 





<p>The Philippines Stock Exchange has announced the changes to the <a href="https://www.smartkarma.com/entities/philippines-stock-exchange-psei-index" target="_blank" data-smartkarma-citation="entities:22912:1" rel="noopener">Philippines Stock Exchange PSEi Index (PCOMP INDEX)</a> as part of the August rebalance.</p><p><a href="https://www.smartkarma.com/entities/ac-energy-corp" target="_blank" data-smartkarma-citation="entities:23188:1" rel="noopener">AC Energy Corp (ACEN PM)</a> and <a href="https://www.smartkarma.com/entities/converge-ict-solutions-inc-609f7498-aeeb-430e-a07d-50503172a1e3" target="_blank" data-smartkarma-citation="entities:31210:1" rel="noopener">Converge ICT Solutions (CNVRG PM)</a> have been added to the index while <a href="https://www.smartkarma.com/entities/emperador-inc" target="_blank" data-smartkarma-citation="entities:3485:1" rel="noopener">Emperador Inc (EMP PM)</a> and <a href="https://www.smartkarma.com/entities/dmci-holdings-inc" target="_blank" data-smartkarma-citation="entities:8026:1" rel="noopener">DMCI Holdings (DMC PM)</a> have been deleted.</p><p>There are minimal assets tracking the <a href="https://www.smartkarma.com/entities/philippines-stock-exchange-psei-index" target="_blank" data-smartkarma-citation="entities:22912:1" rel="noopener">Philippines Stock Exchange PSEi Index (PCOMP INDEX)</a>. However, there are active funds using the index as a benchmark and some of the funds track the benchmark pretty closely. The impact is clearly visible today with <a href="https://www.smartkarma.com/entities/emperador-inc" target="_blank" data-smartkarma-citation="entities:3485:1" rel="noopener">Emperador Inc (EMP PM)</a> and <a href="https://www.smartkarma.com/entities/dmci-holdings-inc" target="_blank" data-smartkarma-citation="entities:8026:1" rel="noopener">DMCI Holdings (DMC PM)</a> lower by 9.5% and 5%, while <a href="https://www.smartkarma.com/entities/ac-energy-corp" target="_blank" data-smartkarma-citation="entities:23188:1" rel="noopener">AC Energy Corp (ACEN PM)</a> and <a href="https://www.smartkarma.com/entities/converge-ict-solutions-inc-609f7498-aeeb-430e-a07d-50503172a1e3" target="_blank" data-smartkarma-citation="entities:31210:1" rel="noopener">Converge ICT Solutions (CNVRG PM)</a> are up 4% and 13% respectively.</p><p>We had <a href="https://www.smartkarma.com/entities/ac-energy-corp" target="_blank" data-smartkarma-citation="entities:23188:1" rel="noopener">AC Energy Corp (ACEN PM)</a> as an inclusion and <a href="https://www.smartkarma.com/entities/emperador-inc" target="_blank" data-smartkarma-citation="entities:3485:1" rel="noopener">Emperador Inc (EMP PM)</a> as a deletion. <a href="https://www.smartkarma.com/entities/dmci-holdings-inc" target="_blank" data-smartkarma-citation="entities:8026:1" rel="noopener">DMCI Holdings (DMC PM)</a> was a close delete. <a href="https://www.smartkarma.com/entities/converge-ict-solutions-inc-609f7498-aeeb-430e-a07d-50503172a1e3" target="_blank" data-smartkarma-citation="entities:31210:1" rel="noopener">Converge ICT Solutions (CNVRG PM)</a> was added following a rule change that was announced and implemented at the same time as the constituent changes and that resulted in the deletion of <a href="https://www.smartkarma.com/entities/dmci-holdings-inc" target="_blank" data-smartkarma-citation="entities:8026:1" rel="noopener">DMCI Holdings (DMC PM)</a> as well.</p><p>There are also some rule changes related minimum free float, to Fast Entry for stocks, and to the inclusion/exclusion cutoff rankings at the regular rebalances.</p>

The Philippines Stock Exchange has announced the changes to the Philippines Stock Exchange PSEi Index (PCOMP INDEX) as part of the August rebalance.AC Energy Corp (ACEN PM) and Converge ICT Solutions (CNVRG PM) have been added to the index while Emperador Inc (EMP PM) and DMCI Holdings (DMC PM) have been deleted.There are minimal assets tracking the Philippines Stock Exchange PSEi Index (PCOMP INDEX). However, there are active funds using the index as a benchmark and some of the funds track the benchmark pretty closely. The impact is clearly visible today with Emperador Inc (EMP PM) and DMCI Holdings (DMC PM) lower by 9.5% and 5%, while AC Energy Corp (ACEN PM) and Converge ICT Solutions (CNVRG PM) are up 4% and 13% respectively.We had AC Energy Corp (ACEN PM) as an inclusion and Emperador Inc (EMP PM) as a deletion. DMCI Holdings (DMC PM) was a close delete. Converge ICT Solutions (CNVRG PM) was added following a rule change that was announced and implemented at the same time as the constituent changes and that resulted in the deletion of DMCI Holdings (DMC PM) as well.There are also some rule changes related minimum free float, to Fast Entry for stocks, and to the inclusion/exclusion cutoff rankings at the regular rebalances.

PCOMP Index Rebalance: ACEN, CNVRG Added; EMP, DMCI Deleted

Philippines

Security Bank Corporation is one of the Philippines' leading universal banks, offering a comprehensive suite of financial products and services through its core businesses: Retail Banking, Business (MSME) Banking, Wholesale (Corporate, Commercial, and Investment) Banking, and Financial Markets. Its offerings include deposits, lending, transaction banking, treasury, investment banking, wealth management, and foreign exchange. The company is headquartered in Makati, Philippines, and was established on June 18, 1951.

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Security Bank (SECB PM)

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PCOMP Index Rebalance: EMP, MONDE Could Pop; BLOOM, RRHI Could Drop

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Brian Freitas

PCOMP Index Rebalance Preview Feb22: Three Potential Changes & Large Impact

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Brian Freitas

Philippine Banks: Streamlining M&A

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David Blennerhassett

PCOMP Index Rebalance: ACEN, CNVRG Added; EMP, DMCI Deleted

ACEN and CNVRG have been added to the index replacing EMP and DMC. Historically inclusions have outperformed the deletions. There are rule changes...

Brian Freitas

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