Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

Thematic (Sector/Industry)

Recently, China’s Banking and Insurance Regulatory Commission issued new rules for asset-investment companies, or AICs, set up by banks, in order to speed up the debt-to-equity swap program. The government has been regarding DES as one of the major tools to accelerate bad-debt disposal for banks and reduce leverage ratios in the highly indebted corporate sector. However, we believe it’s unlikely to reach sufficiently meaningful scale to address China's debt problem. We retain our fair value…

Recently, China’s Banking and Insurance Regulatory Commission issued new rules for asset-investment companies, or AICs, set up by banks, in order to speed up the debt-to-equity swap program. The government has been regarding DES as one of the major tools to accelerate bad-debt disposal for banks and reduce leverage ratios in the highly indebted corporate sector. However, we believe it’s unlikely to reach sufficiently meaningful scale to address China's debt problem. We retain our fair value…

Relaxation of Debt-To-Equity Swap Won't Change Our Outlooks for Chinese Banks

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

Actionable Charts from Smart Karma’s Most-Searched Tickers.We ran through a list of the most frequently searched tickers on the SmartKarma platform using the Discovery Tool.  See the attached report for a complete list of our recommendations from this list.

Actionable Charts from Smart Karma’s Most-Searched Tickers.We ran through a list of the most frequently searched tickers on the SmartKarma platform using the Discovery Tool.  See the attached report for a complete list of our recommendations from this list.

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<h2>EM Investors Reduce China Underweight</h2>Global EM Investors are closing their underweight positions in China.  Analysis of 180 Global EM Equity Funds shows average China &amp; HK allocations at their highest ever levels of 27.9%, with underweights reducing by 1.7% from a low of 5.37% (post-2016 US-Listed China index inclusions) to -3.66% today.  <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/056/281/original/Picture1.png?1530173899" class="editor-image img-responsive" data-smartkarma-image-id="56281"></figure>As further evidence of this active weight increase, the chart below shows the percentage of GEM funds overweight China &amp; HK versus the EEM Index* increase…

EM Investors Reduce China UnderweightGlobal EM Investors are closing their underweight positions in China.  Analysis of 180 Global EM Equity Funds shows average China &amp; HK allocations at their highest ever levels of 27.9%, with underweights reducing by 1.7% from a low of 5.37% (post-2016 US-Listed China index inclusions) to -3.66% today.  As further evidence of this active weight increase, the chart below shows the percentage of GEM funds overweight China &amp; HK versus the EEM Index* increase…

EM Investors Reduce China Underweight - Take Out the B.A.Ts and They Are Overweight!

Following the announcement of the Chinese central bank’s required reserve ratio, or RRR, cut of 50 basis points, effective July 5, we retain our fair value estimates for the Chinese banks we cover, as the positives of liquidity injections are largely offset by downward pressures on credit quality, in our view. Chinese banks under our coverage are trading at three-year lows on our valuation level of 0.4-0.8 times forward price/book, except for <a href="https://www.smartkarma.com/entities/10987" target="_blank" data-smartkarma-citation="entities:10987:1">China Merchants Bank H (3968 HK)</a>. This is…

Following the announcement of the Chinese central bank’s required reserve ratio, or RRR, cut of 50 basis points, effective July 5, we retain our fair value estimates for the Chinese banks we cover, as the positives of liquidity injections are largely offset by downward pressures on credit quality, in our view. Chinese banks under our coverage are trading at three-year lows on our valuation level of 0.4-0.8 times forward price/book, except for China Merchants Bank H (3968 HK). This is…

Positives of RRR Cut Are Likely to Be Offset by Rising Credit Quality Pressures as Economy Weakens

Silver Point

Thomas J. Monaco

Independent Insight Provider

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

* Increased NPL Recognition - Not Exactly Comforting; and * Lowered Reserve Coverage Each Invoke Capital Forebearance. <h2>Investment Summary</h2>Seemingly, nonperforming loan (NPL) recognition at the mainland Chinese banks is likely tighten as ALL loans 90 days past due loans or more are required to be downgraded to NPL status by end 1H18 for the larger and larger 2nd Tier banks. Isn't that a giant kick in the pants? So, after all of these years, who knew that the mainland Chinese banks were…

* Increased NPL Recognition - Not Exactly Comforting; and * Lowered Reserve Coverage Each Invoke Capital Forebearance. Investment SummarySeemingly, nonperforming loan (NPL) recognition at the mainland Chinese banks is likely tighten as ALL loans 90 days past due loans or more are required to be downgraded to NPL status by end 1H18 for the larger and larger 2nd Tier banks. Isn't that a giant kick in the pants? So, after all of these years, who knew that the mainland Chinese banks were…

China

Industrial and Commercial Bank of China Limited provides banking services. The Company offers deposits, loans, fund underwriting, foreign currency settlement, and other services. Industrial and Commercial Bank of China provides its services to individuals, enterprises, and other clients.

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ICBC (H) (1398 HK)

Relaxation of Debt-To-Equity Swap Won't Change Our Outlooks for Chinese Banks

Recently, China’s Banking and Insurance Regulatory Commission issued new rules for asset-investment companies, or AICs, set up by banks, in order...

Morningstar, Inc.

Popular Stocks, Attractive Charts

Actionable Charts from Smart Karma’s Most-Searched Tickers.We ran through a list of the most frequently searched tickers on the SmartKarma platform...

Vermilion Research

EM Investors Reduce China Underweight - Take Out the B.A.Ts and They Are Overweight!

EM Investors Reduce China UnderweightGlobal EM Investors are closing their underweight positions in China. Analysis of 180 Global EM Equity Funds...

Steven Holden

Positives of RRR Cut Are Likely to Be Offset by Rising Credit Quality Pressures as Economy Weakens

Following the announcement of the Chinese central bank’s required reserve ratio, or RRR, cut of 50 basis points, effective July 5, we retain our...

Morningstar, Inc.

China Banks - Back to the Land of Silly

* Increased NPL Recognition - Not Exactly Comforting; and * Lowered Reserve Coverage Each Invoke Capital Forebearance. Investment SummarySeemingly,...

Thomas J. Monaco

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