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

iShares MSCI China ETF / Technical Analysis

<ul>
<li>We remain neutral on global equities (MSCI ACWI), we believe upside remains limited with the MSCI ACWI (ACWI-US), S&amp;P 500, and several European indexes still below major resistance.</li>
<li>We continue to expect rangebound price action in the months ahead on the MSCI ACWI.</li>
<li>And, rangebound price action could very well be the theme for all of 2023 (with resistance at $93 and support at $75-77 on ACWI-US)</li>
</ul>


We remain neutral on global equities (MSCI ACWI), we believe upside remains limited with the MSCI ACWI (ACWI-US), S&amp;P 500, and several European indexes still below major resistance.
We continue to expect rangebound price action in the months ahead on the MSCI ACWI.
And, rangebound price action could very well be the theme for all of 2023 (with resistance at $93 and support at $75-77 on ACWI-US)


Hang Seng and MSCI China Bottoming -- Add; Europe Still Leading; Shift From U.S. To Non-U.S.

iShares MSCI EAFE ETF / Technical Analysis

<ul>
<li>We continue to believe that a bearish intermediate-term outlook is appropriate as long as the YTD downtrends remain intact on MSCI ACWI (ACWI-US), MSCI ACWI ex-US (ACWX-US), and EAFE (EFA-US).</li>
<li>We would turn bullish only on reversals of those downtrends. With that said, a bear market rally has officially begun, something that we have discussed since our Sept.29 Int'l Compass</li>
<li>We expect to see rallies to their respective YTD downtrends (ACWX, EFA, etc.). We highlight buys that are likely to outperform on this bear market rally.</li>
</ul>


We continue to believe that a bearish intermediate-term outlook is appropriate as long as the YTD downtrends remain intact on MSCI ACWI (ACWI-US), MSCI ACWI ex-US (ACWX-US), and EAFE (EFA-US).
We would turn bullish only on reversals of those downtrends. With that said, a bear market rally has officially begun, something that we have discussed since our Sept.29 Int'l Compass
We expect to see rallies to their respective YTD downtrends (ACWX, EFA, etc.). We highlight buys that are likely to outperform on this bear market rally.


Bear Market Rally in Progress as DXY, Global Sovereign 10-Yr Yields Fall; Buy Ideas Within Leaders

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Thematic (Sector/Industry)

<ul><li>In Part I of our Asia AT1s comments, we focus our discussions on China AT1 and our rationale on why we believe that China AT1s, especially those of China G-SIBs, offer more predictable return.</li><li>To start with, the return predictability of AT1s are subject to 1) likelihood of loss absorption; 2) likelihood of cancellation of non-cumulative distribution; and 3) likelihood of being called, especially on the first call dates.</li><li>So far, there is no precedent on the principal of the AT1s of Chinese G- SIBs being written down or converted into equity.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

In Part I of our Asia AT1s comments, we focus our discussions on China AT1 and our rationale on why we believe that China AT1s, especially those of China G-SIBs, offer more predictable return.To start with, the return predictability of AT1s are subject to 1) likelihood of loss absorption; 2) likelihood of cancellation of non-cumulative distribution; and 3) likelihood of being called, especially on the first call dates.So far, there is no precedent on the principal of the AT1s of Chinese G- SIBs being written down or converted into equity.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Asian AT1s Part I – Our picks on Chinese G-SIBs AT1s

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

<ul>
<li>Unicredit, with its solid capital adequacy and improved credit quality metrics, is well positioned to deliver on capital distribution, despite the Russian challenges</li>
<li>We estimate that, even on a relatively conservative basis, capital distribution yield could reach 12% in 2022 and also be at the top end of the peer group post-2022</li>
<li>Unicredit has often been in the shadow of Intesa in capital distribution, but we believe that consensus estimates are currently under-estimating the potential for dividends and share buy-backs at Unicredit</li>
</ul>


Unicredit, with its solid capital adequacy and improved credit quality metrics, is well positioned to deliver on capital distribution, despite the Russian challenges
We estimate that, even on a relatively conservative basis, capital distribution yield could reach 12% in 2022 and also be at the top end of the peer group post-2022
Unicredit has often been in the shadow of Intesa in capital distribution, but we believe that consensus estimates are currently under-estimating the potential for dividends and share buy-backs at Unicredit


Unicredit (UCG IM) – Attractive on Capital Distribution Potential Despite Russia

<ul>
<li>Among EM banks, our top picks are Sberbank in Russia, Banco do Brasil and HDFC Bank in India; we are negative on recent IPO Nubank due to inflated market expectations</li>
<li>Our top picks for 2022 are BBVA and Banco BPM for Southern Europe banks. In Exchanges, we are positive on B3 of Brazil and SGX</li>
<li>In payments, we like Mastercard and Pagseguro, but we are negative on Paytm; we see BTG Pactual as an attractive pick and winner in the digital wealth managers and brokers</li>
</ul>


Among EM banks, our top picks are Sberbank in Russia, Banco do Brasil and HDFC Bank in India; we are negative on recent IPO Nubank due to inflated market expectations
Our top picks for 2022 are BBVA and Banco BPM for Southern Europe banks. In Exchanges, we are positive on B3 of Brazil and SGX
In payments, we like Mastercard and Pagseguro, but we are negative on Paytm; we see BTG Pactual as an attractive pick and winner in the digital wealth managers and brokers


2022 High Conviction Ideas in FinTech & Financials

Italy

UniCredit S.p.A. attracts deposits and offers commercial banking services. The Bank offers consumer credit, mortgages, life insurance, business loan, investment banking, asset management, and other services. UniCredit operates worldwide.

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UniCredit SpA (UCG IM)

Hang Seng and MSCI China Bottoming -- Add; Europe Still Leading; Shift From U.S. To Non-U.S.

We remain neutral on global equities $ACWI and expect rangebound price action in the months (possibly year) ahead. Specific $ACWI trading range we...

Vermilion Research

Bear Market Rally in Progress as DXY, Global Sovereign 10-Yr Yields Fall; Buy Ideas Within Leaders

Bear Market Rally in Progress as $DXY, Global Sovereign 10-Year Yields Decline. Italy FTSE MIB with a bullish YTD downtrend reversal, Switzerland...

Vermilion Research

Asian AT1s Part I – Our picks on Chinese G-SIBs AT1s

So far, there is no precedent on the principal of the AT1s of Chinese G- SIBs being written down or converted into equity.

CMB International

Unicredit (UCG IM) – Attractive on Capital Distribution Potential Despite Russia

Unicredit is the worst performing of our Southern Europe banks in YTD terms. But we now see a more compelling story in risk-reward terms, despite...

Victor Galliano

2022 High Conviction Ideas in FinTech & Financials

Our 2022 high conviction ideas include buys on Sberbank, Banco do Brasil and HDFC Bank, as well as BBVA, Banco BPM, B3, SGX, Mastercard and...

Victor Galliano

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