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)

* President Erdogan is Likely to Win, and Capital Controls Likely Will Follow;  and * All Signs Point to TRL Weakness on Par With Argentina.  <h2>Investment Summary</h2>Ahead of this weekend’s elections (June 24th) in Turkey, President Erdogan rescinded his recent narrative that the Central Bank of Turkey will regain independence. Instead, he indicated that “You will see how we deal with interest rates and other things once you give me the authority".  President Erdogan has removed any doubt that  this…

* President Erdogan is Likely to Win, and Capital Controls Likely Will Follow;  and * All Signs Point to TRL Weakness on Par With Argentina.  Investment SummaryAhead of this weekend’s elections (June 24th) in Turkey, President Erdogan rescinded his recent narrative that the Central Bank of Turkey will regain independence. Instead, he indicated that “You will see how we deal with interest rates and other things once you give me the authority".  President Erdogan has removed any doubt that  this…

* Stronger USD on the back of higher interest rates, and higher USD-denominated oil prices are the perfect storm for the Turkish economy and TRL. * Even in a best case scenario of a soft landing and a Chinese rescue package, significant EPS downgrades are likely with 2018 GDP warnings, the pro-cyclicality of IFRS9 which will increase loan provisioning by 100 bps, and imminent loan growth deceleration on the back of higher local rates. * Economic data is weak: Current account deficit of 6.5%…

* Stronger USD on the back of higher interest rates, and higher USD-denominated oil prices are the perfect storm for the Turkish economy and TRL. * Even in a best case scenario of a soft landing and a Chinese rescue package, significant EPS downgrades are likely with 2018 GDP warnings, the pro-cyclicality of IFRS9 which will increase loan provisioning by 100 bps, and imminent loan growth deceleration on the back of higher local rates. * Economic data is weak: Current account deficit of 6.5%…

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

Turkiye Garanti Bankasi As / Event-Driven

<ul>
<li>Until last week, BBVA had already secured a 71.1% stake in Garanti. The deadline to accept BBVA's takeover bid ends on 18 May. Settlement will take place on 19 May.</li>
<li>Gross spread is 0.2%. Recently, the offer price has acted as a support for the share price, which may drop if BBVA doesn't reach the squeeze-out threshold. Tender.
</li>
<li>The squeeze-out threshold is 98% (95% for delisting). My understanding is that the squeeze-out price is arithmetic average of the daily VWAP in the 30 days before threshold disclosure. </li>
</ul>


Until last week, BBVA had already secured a 71.1% stake in Garanti. The deadline to accept BBVA's takeover bid ends on 18 May. Settlement will take place on 19 May.
Gross spread is 0.2%. Recently, the offer price has acted as a support for the share price, which may drop if BBVA doesn't reach the squeeze-out threshold. Tender.

The squeeze-out threshold is 98% (95% for delisting). My understanding is that the squeeze-out price is arithmetic average of the daily VWAP in the 30 days before threshold disclosure. 


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

Banco Bilbao Vizcaya Argentari / Equity Bottom-Up

<ul>
<li>Mexico continues to be the key contributor to BBVA group, with the offer for Garanti minorities set to increase BBVA’s share of higher risk higher reward returns from emerging markets</li>
<li>The revised offer to Garanti minorities is still 10%+ cheaper in Euro terms than at the time of its 4Q21 announcement, with a modest hit of 34bps to CET1 ratio</li>
<li>We see BBVA as an attractive value play in select emerging markets and Spain, with its well-established digital offerings as a driver for sustained premium returns and premium capital distribution</li>
</ul>


Mexico continues to be the key contributor to BBVA group, with the offer for Garanti minorities set to increase BBVA’s share of higher risk higher reward returns from emerging markets
The revised offer to Garanti minorities is still 10%+ cheaper in Euro terms than at the time of its 4Q21 announcement, with a modest hit of 34bps to CET1 ratio
We see BBVA as an attractive value play in select emerging markets and Spain, with its well-established digital offerings as a driver for sustained premium returns and premium capital distribution


BBVA – Mexico Is the Motor for Further Capital Distribution

<ul>
<li>BBVA sweetness the offer price for Garanti by 23% due to very low acceptances so far (the share price of Garanti has increased by 64% over the last six months).</li>
<li>The increased offer price should placate disgruntled shareholders, while at the same time saving BBVA €264 million (c. 12% less than originally forecasted) due to Turkish lira depreciation.</li>
<li>Gross spread is 0.2%, and the annualized return is 3.05% (assuming settlement on 19 May). Long GARAN IT.</li>
</ul>


BBVA sweetness the offer price for Garanti by 23% due to very low acceptances so far (the share price of Garanti has increased by 64% over the last six months).
The increased offer price should placate disgruntled shareholders, while at the same time saving BBVA €264 million (c. 12% less than originally forecasted) due to Turkish lira depreciation.
Gross spread is 0.2%, and the annualized return is 3.05% (assuming settlement on 19 May). Long GARAN IT.


BBVA/Garanti: Looking to Secure Acceptances with a 23% Increase

Turkey

Turkiye Garanti Bankasi A.S. attracts deposits and offers retail and commercial banking services.  The Group offers lease financing, insurance, asset management, securities brokerage, automobile and mortgage loans, credit cards, and other financial services.  Turkiye Garanti Bankasi operates in Turkey, the Netherlands, Germany, Romania, Russia, Luxembourg, Malta, and Bahrain.

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Turkiye Garanti Bankasi As (GARAN TI)

Cold Turkey

* President Erdogan is Likely to Win, and Capital Controls Likely Will Follow; and * All Signs Point to TRL Weakness on Par With...

Thomas J. Monaco

Turkey Shoot

* Stronger USD on the back of higher interest rates, and higher USD-denominated oil prices are the perfect storm for the Turkish economy and...

Thomas J. Monaco

BBVA/Garanti: End of Offer Period

Prior to the end of the extended offer period (18 May), BBVA has already secured a 71% stake. With the share price supported by the offer (and risk...

Jesus Rodriguez Aguilar

BBVA – Mexico Is the Motor for Further Capital Distribution

BBVA's premium returns engine is Mexico, supported by improving Spanish returns and the growth potential of Turkey, where it is buying the...

Victor Galliano

BBVA/Garanti: Looking to Secure Acceptances with a 23% Increase

BBVA sweetens its bid for Garanti to secure acceptances. If and when BBVA crosses the 50% threshold, it will be able to buy shares in the market...

Jesus Rodriguez Aguilar

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