Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyzed the changes in foreign holdings of KRX stocks as of Jul 3rd. The aggregated holding was USD1,774.5bn.</li>
<li>We estimate that foreign flows to be outflows of USD14,741mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.</li>
<li>We highlight changes of foreign holdings in Samsung Electronics, SK Hynix, SKSQUARE, SamsungElecMech, Samsung Elec (PREF).</li>
</ul>


We analyzed the changes in foreign holdings of KRX stocks as of Jul 3rd. The aggregated holding was USD1,774.5bn.
We estimate that foreign flows to be outflows of USD14,741mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
We highlight changes of foreign holdings in Samsung Electronics, SK Hynix, SKSQUARE, SamsungElecMech, Samsung Elec (PREF).


KRX Foreign Holding Weekly (Jul 3rd): Samsung Electronics, SK Hynix, SKSQUARE, SamsungElecMech

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>EM Bank shares have lifted off their recent lows, as investor sentiment turns in favour of value in general, and attractive value EM assets in particular</li></ul><ul><li>We highlight 5 EM banks we see as standouts on our bank screens, and in which EM investors have reduced weightings throughout 2020, and are likely to rebuild positions going forward; <a href="https://www.smartkarma.com/entities/credicorp-ltd" target="_blank" data-smartkarma-citation="entities:25963:1" rel="noopener">Credicorp Ltd (BAP US)</a>, <a href="https://www.smartkarma.com/entities/banco-do-brasil-sa" target="_blank" data-smartkarma-citation="entities:24564:1" rel="noopener">Banco Do Brasil Sa (BBAS3 BZ)</a>, <a href="https://www.smartkarma.com/entities/grupo-financiero-banorte-o" target="_blank" data-smartkarma-citation="entities:24780:1" rel="noopener">Grupo Financiero Banorte-O (GFNORTEO MF)</a>, <a href="https://www.smartkarma.com/entities/sberbank-of-russia-pjsc-cde59529-fb78-4659-85d0-127942b44ba7" target="_blank" data-smartkarma-citation="entities:27581:1" rel="noopener">Sberbank of Russia PJSC (SBER RM)</a> and <a href="https://www.smartkarma.com/entities/turkiye-garanti-bankasi-as" target="_blank" data-smartkarma-citation="entities:25026:1" rel="noopener">Turkiye Garanti Bankasi As (GARAN TI)</a> </li></ul><ul><li>We like <a href="https://www.smartkarma.com/entities/shinhan-financial-group-adr" target="_blank" data-smartkarma-citation="entities:4534:1" rel="noopener">Shinhan Financial Group Adr (SHG US)</a> and <a href="https://www.smartkarma.com/entities/bank-of-china-ltd-h" target="_blank" data-smartkarma-citation="entities:656:1" rel="noopener">Bank Of China Ltd (H) (3988 HK)</a> as other positive re-rating plays, based on attractive valuations and sound balance sheet metrics</li></ul><ul><li>We also believe that EM bank core holdings throughout the pandemic crisis, such as <a href="https://www.smartkarma.com/entities/kotak-mahindra-bank-ltd" target="_blank" data-smartkarma-citation="entities:126:1" rel="noopener">Kotak Mahindra Bank (KMB IN)</a> and <a href="https://www.smartkarma.com/entities/bank-central-asia-tbk-pt" target="_blank" data-smartkarma-citation="entities:440:1" rel="noopener">Bank Central Asia (BBCA IJ)</a>, may, in valuation terms, now be more exposed to negative rotation</li></ul><ul><li>Risks to our view include a worsening of sentiment towards EM equities and banks in particular, due to a deterioration in the pandemic outlook and a worsening of the macro-economic outlook for emerging markets</li></ul>

EM Bank shares have lifted off their recent lows, as investor sentiment turns in favour of value in general, and attractive value EM assets in particularWe highlight 5 EM banks we see as standouts on our bank screens, and in which EM investors have reduced weightings throughout 2020, and are likely to rebuild positions going forward; Credicorp Ltd (BAP US), Banco Do Brasil Sa (BBAS3 BZ), Grupo Financiero Banorte-O (GFNORTEO MF), Sberbank of Russia PJSC (SBER RM) and Turkiye Garanti Bankasi As (GARAN TI) We like Shinhan Financial Group Adr (SHG US) and Bank Of China Ltd (H) (3988 HK) as other positive re-rating plays, based on attractive valuations and sound balance sheet metricsWe also believe that EM bank core holdings throughout the pandemic crisis, such as Kotak Mahindra Bank (KMB IN) and Bank Central Asia (BBCA IJ), may, in valuation terms, now be more exposed to negative rotationRisks to our view include a worsening of sentiment towards EM equities and banks in particular, due to a deterioration in the pandemic outlook and a worsening of the macro-economic outlook for emerging markets

EM Banks: Screening for Value and Resilience

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

In last Tuesday’s Compass (10/27/20) we noted the S&amp;P 500’s break below 3425 short-term support opened the door for potential visits to 3325 and 3200. Support at 3325 was violated by Wednesday, however the 3200-3230 level has held and remains important support moving forward.  In today’s report we highlight attractive Groups and stocks within Financials: Asian Banks, Puerto Rican Banks, Banks, Southwest, and Investment Banking &amp; Brokerage, Mid-Cap

In last Tuesday’s Compass (10/27/20) we noted the S&amp;P 500’s break below 3425 short-term support opened the door for potential visits to 3325 and 3200. Support at 3325 was violated by Wednesday, however the 3200-3230 level has held and remains important support moving forward.  In today’s report we highlight attractive Groups and stocks within Financials: Asian Banks, Puerto Rican Banks, Banks, Southwest, and Investment Banking &amp; Brokerage, Mid-Cap

U.S. Equity Strategy: Markets Bouncing off Key Support

<ul>
<li>Banks in EM need to be prepared for the deteriorating credit quality outlook, as the Covid-19 driven contraction in GDP growth and economic activity takes hold</li>
<li>In this report, we look at the 1Q20 data in terms of balance sheet resilience – leverage ratio as well as NPL ratio and coverage – and which banks have been most proactive in the bolstering of loan loss provisioning</li>
<li>We then apply our valuation screen to see which attractively valued stocks – in terms of book value versus returns – are best prepared for the potential credit quality challenges, from loan loss provisioning and capital buffer perspectives</li>
<li>Our conclusions are that the best ranked are <a href="https://www.smartkarma.com/entities/china-merchants-bank-co-ltd-3388a037-4214-4997-b45d-520518cfdb57" target="_blank" data-smartkarma-citation="entities:10987:1" rel="noopener">China Merchants Bank H (3968 HK)</a> in Asia, <a href="https://www.smartkarma.com/entities/credicorp-ltd" target="_blank" data-smartkarma-citation="entities:25963:1" rel="noopener">Credicorp Ltd (BAP US)</a> and <a href="https://www.smartkarma.com/entities/grupo-financiero-banorte-o" target="_blank" data-smartkarma-citation="entities:24780:1" rel="noopener">Grupo Financiero Banorte-O (GFNORTEO MF)</a> in LatAm and <a href="https://www.smartkarma.com/entities/commercial-international-bank" target="_blank" data-smartkarma-citation="entities:27625:1" rel="noopener">Commercial International Bank (COMI EY)</a> of Egypt in CEEMEA</li>
<li>We also identify another four EM banks that rank solidly in the “runners up” category, and which we discuss in the report</li>
<li>By contrast, the three Indian banks included in this report generally rank poorly</li>
<li>Risks to our positively viewed EM banks include a more protracted and deeper hit to emerging economies adding to NPLs and needing further big bad loan provision charges, along with lower loan volumes and tighter lending spreads</li>
</ul>


Banks in EM need to be prepared for the deteriorating credit quality outlook, as the Covid-19 driven contraction in GDP growth and economic activity takes hold
In this report, we look at the 1Q20 data in terms of balance sheet resilience – leverage ratio as well as NPL ratio and coverage – and which banks have been most proactive in the bolstering of loan loss provisioning
We then apply our valuation screen to see which attractively valued stocks – in terms of book value versus returns – are best prepared for the potential credit quality challenges, from loan loss provisioning and capital buffer perspectives
Our conclusions are that the best ranked are China Merchants Bank H (3968 HK) in Asia, Credicorp Ltd (BAP US) and Grupo Financiero Banorte-O (GFNORTEO MF) in LatAm and Commercial International Bank (COMI EY) of Egypt in CEEMEA
We also identify another four EM banks that rank solidly in the “runners up” category, and which we discuss in the report
By contrast, the three Indian banks included in this report generally rank poorly
Risks to our positively viewed EM banks include a more protracted and deeper hit to emerging economies adding to NPLs and needing further big bad loan provision charges, along with lower loan volumes and tighter lending spreads


Emerging Market Banks: Measuring Their Response and Resilience to the Tougher Credit Quality Outlook

Mark Artherton, CFA

Inteqres

We dissect the recent decline across Asia and emerging markets with the aim of identifying a few interesting areas for managers to utilise cash.   The suggestions are both short and long term.  This first note looks at the markets from a sectoral viewpoint.  We identify a few banks, healthcare and tech companies worthy of investor attention.

We dissect the recent decline across Asia and emerging markets with the aim of identifying a few interesting areas for managers to utilise cash.   The suggestions are both short and long term.  This first note looks at the markets from a sectoral viewpoint.  We identify a few banks, healthcare and tech companies worthy of investor attention.

Covid-19 - We Identify Some Opportunities in Markets - Inteqres Review

South Korea

Shinhan Financial Group Co., Ltd., a holding company, provides a full range of consumer and commercial banking-related financial services.  The company's main businesses include banking, securities brokerage, trust banking, and assets management to individuals, businesses, and other financial institutions.

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Shinhan Financial Group Adr (SHG US)

KRX Foreign Holding Weekly (Jul 3rd): Samsung Electronics, SK Hynix, SKSQUARE, SamsungElecMech

We analyzed KRX foreign holding data for the past week and highlighted foreign holding changes in Samsung Electronics, SK Hynix, SKSQUARE,...

Ke Yan, CFA, FRM

EM Banks: Screening for Value and Resilience

We highlight 5 EM banks we see as standouts on our bank screens, Credicorp, Banco do Brasil, Banorte, Sberbank and Garanti. EM investors reduced...

Victor Galliano

U.S. Equity Strategy: Markets Bouncing off Key Support

In today’s report we highlight attractive Groups and stocks within Financials: Asian Banks, Puerto Rican banks, Banks, Southwest, and Investment...

Vermilion Research

Emerging Market Banks: Measuring Their Response and Resilience to the Tougher Credit Quality Outlook

Banks in EM need to be prepared for the deteriorating credit quality outlook, as the Covid-19 driven contraction in GDP growth and economic...

Victor Galliano

Covid-19 - We Identify Some Opportunities in Markets - Inteqres Review

We dissect the recent decline across Asia and emerging markets with the aim of identifying a few interesting areas for managers to utilise cash. ...

Mark Artherton, CFA

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