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>What's new is that Japan's domestic credit growth is accelerating, and it's now better than in Singapore, for instance; accelerating to 2.51% YoY in July from 0.77% February low</li>
<li>Loan growth and higher JGB yields, both matter for net interest income, and margins. Two year JGB yields are 0.035% on 22 September compared with -0.075% on 30 June.</li>
<li>Profit delta can rise further for Japan's banks due to better NPLs, with the largest banks' credit costs/loans moving to 5bps in 1Q24, vs 21bps in 4Q22, 11bps in 1Q23</li>
</ul>


What's new is that Japan's domestic credit growth is accelerating, and it's now better than in Singapore, for instance; accelerating to 2.51% YoY in July from 0.77% February low
Loan growth and higher JGB yields, both matter for net interest income, and margins. Two year JGB yields are 0.035% on 22 September compared with -0.075% on 30 June.
Profit delta can rise further for Japan's banks due to better NPLs, with the largest banks' credit costs/loans moving to 5bps in 1Q24, vs 21bps in 4Q22, 11bps in 1Q23


Japan Banks - Accelerating Domestic Credit | JGB Yields Higher | Provisions -79% QoQ & -58% YoY

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

TSE Tokyo Price Index TOPIX / Event-Driven

<ul>
<li>In April 2022, after long prep and considerable public comment as to desires and design, the TSE launched its new market segments designed to encourage governance and foreign investment.</li>
<li>At the time, the TSE wanted to showcase Japan's best blue chips. In March, JPX announced JPX Prime 150, designed to make visible</li>
<li>In March 2023, JPX announced JPX Prime 150, to "make visible the leading Japanese companies that are estimated to create value." Ambitious? Yes. Fated to fail? Probably. Badly constructed?  Definitely. </li>
</ul>


In April 2022, after long prep and considerable public comment as to desires and design, the TSE launched its new market segments designed to encourage governance and foreign investment.
At the time, the TSE wanted to showcase Japan's best blue chips. In March, JPX announced JPX Prime 150, designed to make visible
In March 2023, JPX announced JPX Prime 150, to "make visible the leading Japanese companies that are estimated to create value." Ambitious? Yes. Fated to fail? Probably. Badly constructed?  Definitely. 


The TSE's New 'Better' Index:  JPX Prime 150

<ul>
<li>On 8 May I wrote <a href="https://www.smartkarma.com/insights/japan-flow-foreign-investor-inflows-may-increase" target="_blank" data-smartkarma-citation="insights:101617" rel="noopener">JAPAN FLOW: Foreign Investor Inflows May Increase</a>.  Since the data used in that insight, TSE data shows net foreign buying of ¥3.5trln+. </li>
<li>Investor flows appear to work in patterns which are correlated to TOPIX gains and outperformance vs S&amp;P500. </li>
<li>The history of autocorrelation of net buying suggests while the current streak may end, a four week average of net buys could remain positive for a while. </li>
</ul>


On 8 May I wrote JAPAN FLOW: Foreign Investor Inflows May Increase.  Since the data used in that insight, TSE data shows net foreign buying of ¥3.5trln+. 
Investor flows appear to work in patterns which are correlated to TOPIX gains and outperformance vs S&amp;P500. 
The history of autocorrelation of net buying suggests while the current streak may end, a four week average of net buys could remain positive for a while. 


JAPAN FLOW: Foreign Investor Inflows Increased; Next Is Foreigners Vs Buybacks Vs GPIF

<ul>
<li>Rakuten Bank priced its IPO low and then immediately bounced. Earnings came in as forecast, and the forecast next year did too. Highish PBR, high ROE, not-so-high-PER on low ROA.</li>
<li>The stock fell on 16 May after Rakuten Bank announced its capital raising. That was probably a knee-jerk reaction, and had no reason. </li>
<li>Next week sees the TOPIX inclusion. And the Real World Float has gotten smaller since the offering. And some of those people aren't going to sell near-term.</li>
</ul>


Rakuten Bank priced its IPO low and then immediately bounced. Earnings came in as forecast, and the forecast next year did too. Highish PBR, high ROE, not-so-high-PER on low ROA.
The stock fell on 16 May after Rakuten Bank announced its capital raising. That was probably a knee-jerk reaction, and had no reason. 
Next week sees the TOPIX inclusion. And the Real World Float has gotten smaller since the offering. And some of those people aren't going to sell near-term.


Rakuten Bank - Big TOPIX Inclusion Next Week

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>
<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>, the online banking arm of <a href="https://www.smartkarma.com/entities/rakuten-group-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten (4755 JP)</a>, aims to raise up to around US$630m in its Japan listing in April 2023.</li>
<li>RB is the largest internet bank in Japan, by number of accounts. As of Dec 22, it had 13.3m deposit accounts with a total deposit base of JPY8.8tn.</li>
<li>In our earlier notes, we have looked at the company’s past performance and undertook a peer comparison. In this note, we talk about valuations in the IPO price range.</li>
</ul>



Rakuten Bank (5838 JP), the online banking arm of Rakuten (4755 JP), aims to raise up to around US$630m in its Japan listing in April 2023.
RB is the largest internet bank in Japan, by number of accounts. As of Dec 22, it had 13.3m deposit accounts with a total deposit base of JPY8.8tn.
In our earlier notes, we have looked at the company’s past performance and undertook a peer comparison. In this note, we talk about valuations in the IPO price range.


Rakuten Bank IPO - Lower Range Makes It Even More Attractive

Japan

Sumitomo Mitsui Financial Group, Inc. manages financial operations for its subsidiaries. The Company provides commercial banking and a variety of financial services.

Sumitomo Mitsui Financial Group (8316 JP)

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52-week Range	0.00 - 0.00
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Sumitomo Mitsui Financial Group (8316 JP)

Japan Banks - Accelerating Domestic Credit | JGB Yields Higher | Provisions -79% QoQ & -58% YoY

Japan's banks are seeing accelerating domestic credit growth, better than Singapore now. JGB yields remain higher than in the past, credit costs...

Daniel Tabbush

The TSE's New 'Better' Index: JPX Prime 150

The TSE is launching a new JPX Prime 150 Index on 3 July 2023. It is 150 stocks with high PBRs and high "Equity Spread" (ROE vs cost of capital)...

Travis Lundy

JAPAN FLOW: Foreign Investor Inflows Increased; Next Is Foreigners Vs Buybacks Vs GPIF

Foreign Investor Flows in Japan matter. They always matter, and recently, more foreign investor flow has mattered more. History shows there is room...

Travis Lundy

Rakuten Bank - Big TOPIX Inclusion Next Week

Rakuten Bank IPOed too low. Then it reported earnings and growth. The stock is a bit higher PER than large cap peers, and a lot higher PBR, but it...

Travis Lundy

Rakuten Bank IPO - Lower Range Makes It Even More Attractive

Rakuten Bank (5838 JP), the online banking arm of Rakuten (4755 JP), aims to raise up to around US$630m in its Japan listing in April 2023.

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)