Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Victor Galliano is an experienced equity banks analyst, having covered Latin America banks and non-bank financials for over 12 years, as well as more recently covering the Italian banks. He has worked in sell side equity research for 30 years in a career spanning Barclays, HSBC, BBVA LatInvest, Barings and NatWest.
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.

Financials & FinTech research

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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>
<a href="https://www.smartkarma.com/entities/singapore-exchange-ltd" target="_blank" data-smartkarma-citation="entities:1047:1" rel="noopener">SGX (SGX SP)</a> has seen lacklustre share price performance relative to other global exchanges over the last six months</li>
<li>This is in part due to lingering concerns regarding SGX’s largely reduced MSCI indexing agreement</li>
<li>To help offset the reduced MSCI agreement, SGX signed a strategic partnership with FTSE Russell in August; recently released SGX market statistics to September reveal encouraging datapoints for equity index derivatives</li>
<li>SGX is also making focused acquisitions in the Data and Information space, as well as establishing itself as a leading currency futures exchange and, in commodities, it is the leading iron ore derivatives market globally</li>
<li>SGX management is focused on cost control, which has served to deliver a 5 percentage points increase in EBITDA margin from FY2016 to FY2020, and contributed to SGX achieving an ROE of 40% in FY2020</li>
<li>We see SGX as an attractive share, with consensus estimates too bearish on SGX’s earnings growth potential, in our view, which should support its re-rating</li>
<li>Risks to our view include a worse than expected hit to equity derivative volumes from the reduced MSCI contract in FY 2021, as well as increased competition from other Asian exchanges for currency futures and commodities trading</li>
</ul>



SGX (SGX SP) has seen lacklustre share price performance relative to other global exchanges over the last six months
This is in part due to lingering concerns regarding SGX’s largely reduced MSCI indexing agreement
To help offset the reduced MSCI agreement, SGX signed a strategic partnership with FTSE Russell in August; recently released SGX market statistics to September reveal encouraging datapoints for equity index derivatives
SGX is also making focused acquisitions in the Data and Information space, as well as establishing itself as a leading currency futures exchange and, in commodities, it is the leading iron ore derivatives market globally
SGX management is focused on cost control, which has served to deliver a 5 percentage points increase in EBITDA margin from FY2016 to FY2020, and contributed to SGX achieving an ROE of 40% in FY2020
We see SGX as an attractive share, with consensus estimates too bearish on SGX’s earnings growth potential, in our view, which should support its re-rating
Risks to our view include a worse than expected hit to equity derivative volumes from the reduced MSCI contract in FY 2021, as well as increased competition from other Asian exchanges for currency futures and commodities trading


Hong Kong Exchanges & Clearing (HKXCY US)

SGX (SGX SP): Market Under-Rates Its Growth Potential