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.

Thematic (Sector/Industry)

<ul>
<li>Among bigger cap GEM banks, we pick four longs and two shorts as our conviction calls for 2023</li>
<li>Our core buys are Bank Mandiri from Indonesia, Hana Financial from South Korea, China Construction Bank and BanColombia; we also have a special mentions category for Banco Itau and Nubank</li>
<li>Our key sells are ICICI Bank from India and digital bank Jago from Indonesia</li>
</ul>


Among bigger cap GEM banks, we pick four longs and two shorts as our conviction calls for 2023
Our core buys are Bank Mandiri from Indonesia, Hana Financial from South Korea, China Construction Bank and BanColombia; we also have a special mentions category for Banco Itau and Nubank
Our key sells are ICICI Bank from India and digital bank Jago from Indonesia


Equity Bottom-Up

<ul>
<li>Bradesco’s quarterly results disappointed the market due to soft interest margins, despite the clear indications of Bradesco’s improving returns and better credit quality metrics</li>
<li>NuBank is a digital bank success story, but it has credit quality challenges and also potential capital constraints, due to its fast loan growth</li>
<li>We remain neutral on Itaú and Banco do Brasil; Banco do Brasil seems attractive on valuations, but it is more exposed to political risk; buy Bradesco, sell Nubank</li>
</ul>


Bradesco’s quarterly results disappointed the market due to soft interest margins, despite the clear indications of Bradesco’s improving returns and better credit quality metrics
NuBank is a digital bank success story, but it has credit quality challenges and also potential capital constraints, due to its fast loan growth
We remain neutral on Itaú and Banco do Brasil; Banco do Brasil seems attractive on valuations, but it is more exposed to political risk; buy Bradesco, sell Nubank


Big-Cap Brazilian Commercial Banks; Bradesco Stays Our High Conviction Buy, Nubank Remains a Sell

<ul>
<li>We stick with Bradesco as the key pick in big-cap Brazilian and LatAm banks, for its earnings recovery prospects; the very low PEG and PBV ratio reflect its re-rating potential</li>
<li>NuBank is a digital bank success story, but one that we see has challenges in terms of credit quality and it has potential capital constraints given its fast loan growth</li>
<li>We are neutral on Itaú and Banco do Brasil; Itaú seems to be fairly valued whilst Banco do Brasil is optically attractive, but it is more exposed to political risk</li>
</ul>


We stick with Bradesco as the key pick in big-cap Brazilian and LatAm banks, for its earnings recovery prospects; the very low PEG and PBV ratio reflect its re-rating potential
NuBank is a digital bank success story, but one that we see has challenges in terms of credit quality and it has potential capital constraints given its fast loan growth
We are neutral on Itaú and Banco do Brasil; Itaú seems to be fairly valued whilst Banco do Brasil is optically attractive, but it is more exposed to political risk


Big-Cap Brazilian Commercial Banks; Bradesco (BBDC4 BZ), the Earnings Recovery Play

<ul>
<li>Among bigger cap GEM banks, we pick five longs and two shorts as our conviction calls; we add country-based equity risk premia to our screening process</li>
<li>Our core buys are Bank Mandiri from Indonesia, Hana Financial from South Korea, CIMB Group from Malaysia, Bradesco from Brazil and CCB from China; four of these are value picks</li>
<li>Our sells are Kotak Mahindra Bank and ICICI Bank from India, both richly valued larger cap banks that have benefited from past economic and political tailwinds with headwinds now emerging</li>
</ul>


Among bigger cap GEM banks, we pick five longs and two shorts as our conviction calls; we add country-based equity risk premia to our screening process
Our core buys are Bank Mandiri from Indonesia, Hana Financial from South Korea, CIMB Group from Malaysia, Bradesco from Brazil and CCB from China; four of these are value picks
Our sells are Kotak Mahindra Bank and ICICI Bank from India, both richly valued larger cap banks that have benefited from past economic and political tailwinds with headwinds now emerging


GEM Banks; Focus on Value Attributes and Returns Recovery Potential

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

<ul>
<li>LATAM allocations hit 10-year highs in active Global equity funds.</li>
<li>Notable increases in allocations include Ninety One Global Value (up 7.5%) and Ranmore Global Equity (up 6.7%), with smaller contributions from Lazard, Delaware, and JOHCM</li>
<li>MercadoLibre is the driving force behind the moves higher, and remains the conviction holding in the region.</li>
</ul>


LATAM allocations hit 10-year highs in active Global equity funds.
Notable increases in allocations include Ninety One Global Value (up 7.5%) and Ranmore Global Equity (up 6.7%), with smaller contributions from Lazard, Delaware, and JOHCM
MercadoLibre is the driving force behind the moves higher, and remains the conviction holding in the region.


LATAM Momentum:  Global Funds Raise Exposure

Brazil

Banco do Brasil S.A. attracts deposits and offers retail and commercial banking services.  The Bank offers consumer, commercial, and agribusiness loans, asset management, foreign exchange, private pension, insurance, lease financing, credit cards, and Internet banking services.

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

Banco do Brasil (BBAS3 BZ)

GEM Banks; Conviction Calls for 2023

Our core buys are Bank Mandiri, Hana Financial, China Construction Bank and BanColombia; we also have special mention for Banco Itau and Nubank;...

Victor Galliano

Big-Cap Brazilian Commercial Banks; Bradesco Stays Our High Conviction Buy, Nubank Remains a Sell

The market has yet to recognise Bradesco’s improving returns and better credit quality, whilst Nubank faces credit quality challenges and...

Victor Galliano

Big-Cap Brazilian Commercial Banks; Bradesco (BBDC4 BZ), the Earnings Recovery Play

With its strong earnings recovery potential, Bradesco remains our buy in Brazilian banks while NuBank faces credit quality and potential capital...

Victor Galliano

GEM Banks; Focus on Value Attributes and Returns Recovery Potential

Top picks for bigger cap GEM banks include Bank Mandiri, Hana Financial, CIMB Group, Bradesco, and CCB, while Kotak Mahindra Bank and ICICI Bank...

Victor Galliano

LATAM Momentum: Global Funds Raise Exposure

LATAM allocations hit 10-year highs in active Global equity funds. . MercadoLibre the driving force behind the moves higher, and remains the...

Steven Holden

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

GEM Banks; Conviction Calls for 2023

Our core buys are Bank Mandiri, Hana Financial, China Construction Bank and BanColombia; we also have special mention for Banco Itau and Nubank;...

Victor Galliano

Big-Cap Brazilian Commercial Banks; Bradesco Stays Our High Conviction Buy, Nubank Remains a Sell

​The market has yet to recognise Bradesco’s improving returns and better credit quality, whilst Nubank faces credit quality challenges and...

Victor Galliano

Big-Cap Brazilian Commercial Banks; Bradesco (BBDC4 BZ), the Earnings Recovery Play

​With its strong earnings recovery potential, Bradesco remains our buy in Brazilian banks while NuBank faces credit quality and potential capital...

Victor Galliano

GEM Banks; Focus on Value Attributes and Returns Recovery Potential

​Top picks for bigger cap GEM banks include Bank Mandiri, Hana Financial, CIMB Group, Bradesco, and CCB, while Kotak Mahindra Bank and ICICI Bank...

Victor Galliano

LATAM Momentum: Global Funds Raise Exposure

LATAM allocations hit 10-year highs in active Global equity funds. . MercadoLibre the driving force behind the moves higher, and remains the...

Steven Holden

The market has yet to recognise Bradesco’s improving returns and better credit quality, whilst Nubank faces credit quality challenges and...

With its strong earnings recovery potential, Bradesco remains our buy in Brazilian banks while NuBank faces credit quality and potential capital...

Top picks for bigger cap GEM banks include Bank Mandiri, Hana Financial, CIMB Group, Bradesco, and CCB, while Kotak Mahindra Bank and ICICI Bank...