Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In mid-January, the TSE announced a "name-and-shame" list where they listed all the companies which had put forth a disclosure about 【資本コストや株価を意識した経営の実現に向けた対応】.  But they did not actually shame.</li>
<li>The list shows which companies have disclosed a policy/consideration. But no data/links. We have the links. On Feb 1, the TSE put out a <strong><a href="https://www.jpx.co.jp/english/news/1020/u5j7e50000001bqd-att/240201en.pdf" target="_blank" rel="noopener">presentation</a></strong> and set of <strong><a href="https://www.jpx.co.jp/english/news/1020/u5j7e50000001bqd-att/240201en2.pdf" target="_blank" rel="noopener">case studies</a>.</strong>
</li>
<li>Designed to present the "Investor's Point of View", they have unexpectedly worthwhile advice/commentary for corporates. The TSE appears to be trying hard to prompt serious consideration rather than box-ticking.</li>
</ul>


In mid-January, the TSE announced a "name-and-shame" list where they listed all the companies which had put forth a disclosure about 【資本コストや株価を意識した経営の実現に向けた対応】.  But they did not actually shame.
The list shows which companies have disclosed a policy/consideration. But no data/links. We have the links. On Feb 1, the TSE put out a presentation and set of case studies.

Designed to present the "Investor's Point of View", they have unexpectedly worthwhile advice/commentary for corporates. The TSE appears to be trying hard to prompt serious consideration rather than box-ticking.


Updated Tool for TSE "Mgmt Conscious of Capital Cost/Stock Price" And New Presentation/CaseStudies

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>3QFY23 results reveal losses related to Aozora’s US CRE exposure and securities portfolio; management forecasts a FY23 loss and a 50% cut in the previously forecast FY2023 dividend</li>
<li>US CRE exposure is 6.6% of total loans and Aozora’s US CRE deterioration propelled the NPL ratio to 2.87% up 162bps QoQ, the worst NPL ratio of the peer group</li>
<li>The securities portfolio hits are in US MBS and US bond ETFs; SMFG and Mizuho have large relative FX bond exposures, but they have less duration risk</li>
</ul>


3QFY23 results reveal losses related to Aozora’s US CRE exposure and securities portfolio; management forecasts a FY23 loss and a 50% cut in the previously forecast FY2023 dividend
US CRE exposure is 6.6% of total loans and Aozora’s US CRE deterioration propelled the NPL ratio to 2.87% up 162bps QoQ, the worst NPL ratio of the peer group
The securities portfolio hits are in US MBS and US bond ETFs; SMFG and Mizuho have large relative FX bond exposures, but they have less duration risk


Aozora Bank (8304 JP) – Two Bets Too Far

<ul>
<li>In the post meeting press briefing, governor Kazuo Ueda said there was an increasing chance of the BoJ's 2% inflation target being hit; JGB 10Y yields rose as a result</li>
<li>This implies that the BoJ could change from negative interest rate policy in the near future, perhaps as soon as March, which is positive for the Japanese bank sector’s fundamentals</li>
<li>We believe that this new will give further impetus to Japanese bank shares, especially those banks that are well geared into rising domestic interest rates; we highlight eight banks</li>
</ul>


In the post meeting press briefing, governor Kazuo Ueda said there was an increasing chance of the BoJ's 2% inflation target being hit; JGB 10Y yields rose as a result
This implies that the BoJ could change from negative interest rate policy in the near future, perhaps as soon as March, which is positive for the Japanese bank sector’s fundamentals
We believe that this new will give further impetus to Japanese bank shares, especially those banks that are well geared into rising domestic interest rates; we highlight eight banks


Bank of Japan Meeting Signals– Our Take on the Implications for Japanese Banks

Mizuho Financial Group / Equity Bottom-Up

<ul>
<li>We see Ueda’s pause on lifting its negative rates policy as temporary, and we expect that this policy change could occur as early as January</li>
<li>Despite this monetary pause in tightening and the fall in 10Y JGB yields, we are encouraged by the rise in long term loan yields in the BoJ data to October-end</li>
<li>We reiterate our positive views on Resona, Mizuho, MUFG and Concordia</li>
</ul>


We see Ueda’s pause on lifting its negative rates policy as temporary, and we expect that this policy change could occur as early as January
Despite this monetary pause in tightening and the fall in 10Y JGB yields, we are encouraged by the rise in long term loan yields in the BoJ data to October-end
We reiterate our positive views on Resona, Mizuho, MUFG and Concordia


Japanese Banks – No Change to Our Bullish View on the Back of the BoJ’s Pause on Interest Rates

<ul>
<li>We focus on five key factors, namely capital adequacy, credit quality, exposure to government securities, interest rate gearing and valuation with growth metrics for our Japanese banks universe</li>
<li>It is important to note that the relaxation of yield curve control is translating into rising loan yields generally in the BoJ data to September-end 2023</li>
<li>We stick with our positive views on Resona, Mizuho and Concordia; we remove Hachijuni from the buy list and SMFG, replacing the latter with MUFG in the large cap banks</li>
</ul>


We focus on five key factors, namely capital adequacy, credit quality, exposure to government securities, interest rate gearing and valuation with growth metrics for our Japanese banks universe
It is important to note that the relaxation of yield curve control is translating into rising loan yields generally in the BoJ data to September-end 2023
We stick with our positive views on Resona, Mizuho and Concordia; we remove Hachijuni from the buy list and SMFG, replacing the latter with MUFG in the large cap banks


Japanese Banks – Our Main Thoughts Post 2Q23 Results

Japan

Concordia Financial Group, Ltd. is a holding company established through the merger of Bank of Yokohama and Higashi-Nippon Bank. The Company provides banking services and other financial services.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Concordia Financial Group, Ltd (7186 JP)

Updated Tool for TSE "Mgmt Conscious of Capital Cost/Stock Price" And New Presentation/CaseStudies

The TSE update for this will come out in a day or two. There will be some commentary on the update. It is not meaningful yet, mostly because...

Travis Lundy

Aozora Bank (8304 JP) – Two Bets Too Far

Aozora Bank's losses from US CRE and securities point to a projected FY23 loss and a dividend cut, with it having the highest overseas loan share...

Victor Galliano

Bank of Japan Meeting Signals– Our Take on the Implications for Japanese Banks

BoJ's inflation target of 2% looks increasingly like it will be reached will should drive the shift from negative interest rate policy, boosting...

Victor Galliano

Japanese Banks – No Change to Our Bullish View on the Back of the BoJ’s Pause on Interest Rates

BoJ's decision to pause on lifting negative rates is temporary and could change as soon as January; evidence of higher long term loan rates...

Victor Galliano

Japanese Banks – Our Main Thoughts Post 2Q23 Results

We look to capital ratios, delinquency, exposure to sovereign bonds, interest rate gearing and valuation; buy Resona, Mizuho and Concordia, adding...

Victor Galliano

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Updated Tool for TSE "Mgmt Conscious of Capital Cost/Stock Price" And New Presentation/CaseStudies

The TSE update for this will come out in a day or two. There will be some commentary on the update. It is not meaningful yet, mostly because...

Travis Lundy

Aozora Bank (8304 JP) – Two Bets Too Far

​Aozora Bank's losses from US CRE and securities point to a projected FY23 loss and a dividend cut, with it having the highest overseas loan share...

Victor Galliano

Bank of Japan Meeting Signals– Our Take on the Implications for Japanese Banks

BoJ's inflation target of 2% looks increasingly like it will be reached will should drive the shift from negative interest rate policy, boosting...

Victor Galliano

Japanese Banks – No Change to Our Bullish View on the Back of the BoJ’s Pause on Interest Rates

BoJ's decision to pause on lifting negative rates is temporary and could change as soon as January; evidence of higher long term loan rates...

Victor Galliano

Japanese Banks – Our Main Thoughts Post 2Q23 Results

We look to capital ratios, delinquency, exposure to sovereign bonds, interest rate gearing and valuation; buy Resona, Mizuho and Concordia, adding...

Victor Galliano

Aozora Bank's losses from US CRE and securities point to a projected FY23 loss and a dividend cut, with it having the highest overseas loan share...