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

Equity Bottom-Up

* SoftBank Group (SoftBank) is a Death Star for credit markets, having greater than USD 250 bn in debt, commitments, and lease obligations. * Japan’s three largest banks already hold about USD 13 bn in SoftBank debt on balance sheet at FY 3/19. * The next potential (and major) test/wobble in credit markets is the proposed T-Mobile/Sprint merger. If this transaction does not close, SoftBank would fail to receive the funding from an exit that it desperately needs.

* SoftBank Group (SoftBank) is a Death Star for credit markets, having greater than USD 250 bn in debt, commitments, and lease obligations. * Japan’s three largest banks already hold about USD 13 bn in SoftBank debt on balance sheet at FY 3/19. * The next potential (and major) test/wobble in credit markets is the proposed T-Mobile/Sprint merger. If this transaction does not close, SoftBank would fail to receive the funding from an exit that it desperately needs. 

Japanese Banks – The SoftBank Credit Market Death Star

*Delays and inefficiency in restructuring execution.* Inability to meet strategic targets will have an adverse impact.* Continued deterioration in macro and persistence of low rates to affect lending and client volumes while deterioration in macro environment increases the cost of risk.* Shares trade at 0.3x TBV and 11.3 x P/E (vs. Eurozone banks at 8.6x).* Global monetary policy, cycle and industry pricing pressures are key to watch.

*Delays and inefficiency in restructuring execution.* Inability to meet strategic targets will have an adverse impact.* Continued deterioration in macro and persistence of low rates to affect lending and client volumes while deterioration in macro environment increases the cost of risk.* Shares trade at 0.3x TBV and 11.3 x P/E (vs. Eurozone banks at 8.6x).* Global monetary policy, cycle and industry pricing pressures are key to watch.

Deutsche Bank - When Will This Old Nag Be Put Down?

Thematic (Sector/Industry)

The sell-off in 2H18 credit markets was widespread due to global slowdown fears and nearly culminated with Jefferies (JEF) in a Lehman-style event. The wider fissures YTD in the leverage lending market look to be much more structural and longer lasting by definition.

The sell-off in 2H18 credit markets was widespread due to global slowdown fears and nearly culminated with Jefferies (JEF) in a Lehman-style event. The wider fissures YTD in the leverage lending market look to be much more structural and longer lasting by definition. 

Risks In Leveraged Lending Skyrocketing - Watch For The Big Offload

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

TSE Tokyo Price Index TOPIX / Technical Analysis

Despite EAFE’s YTD outperformance relative to EM, EAFE and EM returns have generally been equal since August, shown by the stalemate in the EAFE vs. EM ratio. The U.S. dollar (DXY) is currently trading near support within the 16-17 month uptrend channel. Technicals suggest the most likely scenario is for the DXY uptrend to continue and for support to hold -- which would likely result in EAFE reasserting as leadership.  In this publication we highlight attractive investment themes and individual ideas across developed markets, with special attention given to Japan, Germany, Sweden, Italy, Spain, and Switzerland.

Despite EAFE’s YTD outperformance relative to EM, EAFE and EM returns have generally been equal since August, shown by the stalemate in the EAFE vs. EM ratio. The U.S. dollar (DXY) is currently trading near support within the 16-17 month uptrend channel. Technicals suggest the most likely scenario is for the DXY uptrend to continue and for support to hold -- which would likely result in EAFE reasserting as leadership.  In this publication we highlight attractive investment themes and individual ideas across developed markets, with special attention given to Japan, Germany, Sweden, Italy, Spain, and Switzerland.

Developed Markets Strategy: Stick with Japan

The probability for a breakout for global equities (MSCI ACWI) has increased in the past week based on several positive technical developments which we highlight below. Still, there are several indicators that continue to tell us we are not yet out of the woods. In this report we outline key technical levels and drivers across major markets, and highlight attractive set ups in the following areas: European &amp; UK Banks, Exchanges/Markets, Asset Managers, and Insurance, Major Autos and Communications.

The probability for a breakout for global equities (MSCI ACWI) has increased in the past week based on several positive technical developments which we highlight below. Still, there are several indicators that continue to tell us we are not yet out of the woods. In this report we outline key technical levels and drivers across major markets, and highlight attractive set ups in the following areas: European &amp; UK Banks, Exchanges/Markets, Asset Managers, and Insurance, Major Autos and Communications.

Global Equity Strategy: Bullish Breakout Probability on the Rise

Japan

Mitsubishi UFJ Financial Group, Inc. (MUFG) is a holding company established through the merger of Mitsubishi Tokyo Financial Group and UFJ Holdings. As a financial group, the Company provides a variety of financial and investment services including commercial banking, trust banking, international finance, and assets management services.

Mitsubishi UFJ Financial (MUFG) (8306 JP)

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Mitsubishi UFJ Financial (MUFG) (8306 JP)

Japanese Banks – The SoftBank Credit Market Death Star

* SoftBank Group (SoftBank) is a Death Star for credit markets, having greater than USD 250 bn in debt, commitments, and lease obligations. *...

Thomas J. Monaco

Deutsche Bank - When Will This Old Nag Be Put Down?

Delays and inefficiency in restructuring execution. Inability to meet strategic targets will have an adverse impact.* Continued deterioration in...

Thomas J. Monaco

Risks In Leveraged Lending Skyrocketing - Watch For The Big Offload

The sell-off in 2H18 credit markets was widespread due to global slowdown fears and nearly culminated with Jefferies (JEF) in a Lehman-style event....

Thomas J. Monaco

Developed Markets Strategy: Stick with Japan

Despite EAFE’s YTD outperformance relative to EM, EAFE and EM returns have generally been equal since August, shown by the stalemate in the EAFE...

Vermilion Research

Global Equity Strategy: Bullish Breakout Probability on the Rise

The probability for a breakout for global equities (MSCI ACWI) has increased in the past week based on several positive technical developments...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japanese Banks – The SoftBank Credit Market Death Star

* SoftBank Group (SoftBank) is a Death Star for credit markets, having greater than USD 250 bn in debt, commitments, and lease obligations. *...

Thomas J. Monaco

Deutsche Bank - When Will This Old Nag Be Put Down?

*Delays and inefficiency in restructuring execution.* Inability to meet strategic targets will have an adverse impact.* Continued deterioration in...

Thomas J. Monaco

Risks In Leveraged Lending Skyrocketing - Watch For The Big Offload

The sell-off in 2H18 credit markets was widespread due to global slowdown fears and nearly culminated with Jefferies (JEF) in a Lehman-style event....

Thomas J. Monaco

Developed Markets Strategy: Stick with Japan

Despite EAFE’s YTD outperformance relative to EM, EAFE and EM returns have generally been equal since August, shown by the stalemate in the EAFE...

Vermilion Research

Global Equity Strategy: Bullish Breakout Probability on the Rise

The probability for a breakout for global equities (MSCI ACWI) has increased in the past week based on several positive technical developments...

Vermilion Research

Delays and inefficiency in restructuring execution. Inability to meet strategic targets will have an adverse impact.* Continued deterioration in...