In today’s briefing:
- Last Major Currency Peg: Hong Kong’s Fate Could Be Determined by the Fed and Geopolitics
- About an Article on Strengthening ESG Fund Monitoring
- Equitas Small Finance Bank – MD & CEO Resignation to Be an Overhang near Term
- 4QFY22 Results Update – Manappuram Finance
Last Major Currency Peg: Hong Kong’s Fate Could Be Determined by the Fed and Geopolitics
- Prior to 1983, Hong Kong experienced economic overheating and high inflation. The currency peg’s inception coincided with the rising anti-inflationary credibility of Fed policy conduct.
- Hong Kong is, however, now totally exposed to any draconian attempts by the Fed to recoup lost credibility via tighter policy settings.
- China needs its own sovereign-controlled financial hub. Hong Kong could be China’s financial centre, but recent currency weaponisation implies tenability of the currency board becomes increasingly driven by geopolitics.
About an Article on Strengthening ESG Fund Monitoring
- I would like to discuss the Nikkei article, “FSA surveyed 37 asset management companies offering ESG-related investment trusts and found that 40% of them have no ESG professionals.”
- If it’s impossible to have a ESG professional, and if a fund called ESG fund is set up because of revenue needs, then perhaps the fees need to be reviewed.
- As for ESG wash, since ESG is scheduled to be included in annual securities reports from FY2023, ESG wash of the issuing company is expected to become an issue.
Equitas Small Finance Bank – MD & CEO Resignation to Be an Overhang near Term
- Will change in MD & CEO impact reverse merger or application for universal bank license?
- Strong management team to drive growth and profitability: Mr. Murali Vaidyanathan, Head of Liabilities and Mr Rohit Phadke, Head of Assets have been promoted to Executive Director’s position (subject to RBI and shareholders’ approval).
- Valuation: We have a BUY rating on Equitas Small Finance Bank with a target price (TP) of Rs84.
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4QFY22 Results Update – Manappuram Finance
- Gold loan demand muted while MFI continues to disappoint – Over the last three quarters, MGFL traded off margin and spreads for Gold loan growth.
- Gold and MFI AUM fell sequentially; credit costs elevated in MFI – Gold AUM fell ~1% QoQ to INR202b and Gold tonnage declined by 2% to 68t.
- Compression in spreads and margin driven by higher ticket sizes and aggressive competition – NII fell 2% QoQ, driven by sequential moderation of ~150bp in Gold loan yields to 18.8%.
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.
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