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

Thematic (Sector/Industry)

* Regulator spread letter and LDR changes could prompt aggressive NIM/spread compression at the Bangladeshi banks.  * Higher capital requirements and USD 7.7 bn of NPLs could prompt further EPS reductions and capital raises. <h2>Summary </h2>Bangladesh Bank (the central bank) chronically tries to encourage its commercial banks to narrow their net lending spreads below 5.0%. 2018 is no different. Bangladesh Bank has instructed eight private banks to reduce their interest rate spread to less than 5.0%…

* Regulator spread letter and LDR changes could prompt aggressive NIM/spread compression at the Bangladeshi banks.  * Higher capital requirements and USD 7.7 bn of NPLs could prompt further EPS reductions and capital raises. Summary Bangladesh Bank (the central bank) chronically tries to encourage its commercial banks to narrow their net lending spreads below 5.0%. 2018 is no different. Bangladesh Bank has instructed eight private banks to reduce their interest rate spread to less than 5.0%…

Bangladesh Banks – Harder Line Being Taken

Specialist in Indian Banking and Economic Research

Hemindra Hazari

Anil Ambani, chairman, <a href="https://www.smartkarma.com/entities/5197" target="_blank" data-smartkarma-citation="entities:5197:1">Reliance Communications Ltd (RCOM IN)</a>, sounded optimistic at a press conference on December 26, 2017, stating that the company will exit the Strategic Debt Restructuring (SDR) with a zero write-off to lenders, as the company plans to monetize its wireless operations by January-March 2018 and settle its dues. The truth, however, is that banks are preparing to classify the company as a non-performing asset (NPA) if their dues are not paid by December 31. The banking sector has a funded exposure of around Rs 380 bn to the company, and will have to provide 10% (5% already provided at the time of SDR) of their exposure for the quarter ended December if it is classified as NPA.

Anil Ambani, chairman, Reliance Communications Ltd (RCOM IN), sounded optimistic at a press conference on December 26, 2017, stating that the company will exit the Strategic Debt Restructuring (SDR) with a zero write-off to lenders, as the company plans to monetize its wireless operations by January-March 2018 and settle its dues. The truth, however, is that banks are preparing to classify the company as a non-performing asset (NPA) if their dues are not paid by December 31. The banking sector has a funded exposure of around Rs 380 bn to the company, and will have to provide 10% (5% already provided at the time of SDR) of their exposure for the quarter ended December if it is classified as NPA.

Mysterious Saviour for Reliance Communications?

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

TSE Tokyo Price Index TOPIX / Technical Analysis

Economic data finally confirms what the charts have been saying all year: global growth in the major regions is now in sync.  We see the bullish advance in equities continuing well into 2018, a continuation of a long-term trend. However, the Sectors that propel this trend may be different.In our December International Strategy, we explore these and the following themes in further detail: <ul><li>Overweight Japan. </li><li>Cyclicals continue to lead, defensive continues to lag. </li><li>Actionable Sector/Group themes:<ol><li>Global banks are breaking out/bullishly inflecting. </li><li>Energy is bottoming – still a non-consensus view. </li><li>Pullback opportunity in metals &amp; mining.</li></ol></li></ul>

Economic data finally confirms what the charts have been saying all year: global growth in the major regions is now in sync.  We see the bullish advance in equities continuing well into 2018, a continuation of a long-term trend. However, the Sectors that propel this trend may be different.In our December International Strategy, we explore these and the following themes in further detail: Overweight Japan. Cyclicals continue to lead, defensive continues to lag. Actionable Sector/Group themes:Global banks are breaking out/bullishly inflecting. Energy is bottoming – still a non-consensus view. Pullback opportunity in metals &amp; mining.

International Equity Strategy: Bullish Big Picture

Chief Economist, Heteronomics

Phil Rush

Chief Economist

Heteronomics

Heteronomics represents a different kind of economics. We believe analysis should delve into the details of what is really going on, rather than using overly simplistic assumptions to quick-sell stories. Independence from myopic institutional pressures allows us to focus on the realities underlying your asset allocation decisions, without the conflicts of the old market structures. Heteronomics targets the themes driving UK asset prices, offering the benefits of depth, independence and ultimately price.

UK-centric macro research

Macroeconomics

<ul>
<li>All banks passed the BoE’s annual stress tests for the first time. No new capital is required, but some capital will become incorporated into regulatory requirements.</li>
<li>With the UK banking system facing cyclical risks back at normal levels, the FPC announced another 50bp CCyB hike to 1.0%, which it sees as cyclically normal for the instrument. However, it will reconsider its adequacy in 2018 H1.</li>
<li>
Normalisation of the countercyclical macroprudential policy instrument matches the maturing of the cycle,…</li>
</ul>


All banks passed the BoE’s annual stress tests for the first time. No new capital is required, but some capital will become incorporated into regulatory requirements.
With the UK banking system facing cyclical risks back at normal levels, the FPC announced another 50bp CCyB hike to 1.0%, which it sees as cyclically normal for the instrument. However, it will reconsider its adequacy in 2018 H1.

Normalisation of the countercyclical macroprudential policy instrument matches the maturing of the cycle,…


BoE: FPC Hikes to Normal Well Ahead of MPC

<ul>
<li>China’s stretching credit cycle, combined with rising UK unsecured credit and household leverage, have returned the risk environment to a standard one. Despite this, countercyclical policy is at its stimulative extreme.</li>
<li>
With the risk of a referendum induced recession subsided and forward guidance almost expired, the FPC appears keen to tighten. I expect a countercyclical capital buffer hike to 50bp in June and 100bp in December, assuming the credit cycle stays strong. A reworked leverage ratio…</li>
</ul>


China’s stretching credit cycle, combined with rising UK unsecured credit and household leverage, have returned the risk environment to a standard one. Despite this, countercyclical policy is at its stimulative extreme.

With the risk of a referendum induced recession subsided and forward guidance almost expired, the FPC appears keen to tighten. I expect a countercyclical capital buffer hike to 50bp in June and 100bp in December, assuming the credit cycle stays strong. A reworked leverage ratio…


BoE Set to Tighten Macroprudential Policy

United Kingdom

Standard Chartered is a British multinational banking and financial services company that offers corporate, institutional, wealth, and retail banking services. It provides global markets trading, lending and financial solutions, transaction services, and wealth solutions. The company is headquartered in London, England, and was founded in 1853.

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Standard Chartered (2888 HK)

Bangladesh Banks – Harder Line Being Taken

* Regulator spread letter and LDR changes could prompt aggressive NIM/spread compression at the Bangladeshi banks. * Higher capital requirements...

Thomas J. Monaco

Mysterious Saviour for Reliance Communications?

Anil Ambani, chairman, Reliance Communications Ltd (RCOM IN), sounded optimistic at a press conference on December 26, 2017, stating that the...

Hemindra Hazari

International Equity Strategy: Bullish Big Picture

Economic data finally confirms what the charts have been saying all year: global growth in the major regions is now in sync. We see the bullish...

Vermilion Research

BoE: FPC Hikes to Normal Well Ahead of MPC

All banks passed the BoE’s annual stress tests for the first time. No new capital is required, but some capital will become incorporated into...

Phil Rush

BoE Set to Tighten Macroprudential Policy

China’s stretching credit cycle, combined with rising UK unsecured credit and household leverage, have returned the risk environment to a standard...

Phil Rush

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