Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>So far, 10 regional banks have upgraded guidance since Q1 results. One of them (Iyogin) twice. The average gain is +71.7% vs original H1 guidance (if we count Iyogin once).</li>
<li>This week will be the big push for new guidance ahead of a flood earnings reports the following week. Election results will cause concern, and the BOJ meets Thursday.</li>
<li>I expect a move in December (positive for banks), but it may be US Fed and $/¥-dependent. In the meantime banks enjoy tailwinds.</li>
</ul>


So far, 10 regional banks have upgraded guidance since Q1 results. One of them (Iyogin) twice. The average gain is +71.7% vs original H1 guidance (if we count Iyogin once).
This week will be the big push for new guidance ahead of a flood earnings reports the following week. Election results will cause concern, and the BOJ meets Thursday.
I expect a move in December (positive for banks), but it may be US Fed and $/¥-dependent. In the meantime banks enjoy tailwinds.


Japan 2024 H1 Bank Guidance: Interest/Fees ⬆︎, Expenses/Credit Costs⬇︎ - Opportunity Good Still

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

Hokuhoku Financial Group / Equity Bottom-Up

<ul>
<li>We analyse ten Japanese midcap banks to target beneficiaries of the realization of strategic shareholdings, as well as beneficiaries of the improving interest rate outlook</li>
<li>We add Hachijuni Bank and Hokuhoku Financial to the buy list, based on the potential for realization of strategic holdings; these share-holdings are large relative to their respective market capitalizations</li>
<li>We maintain Gunma Bank on the buy list, primarily for its very strong gearing into the rising interest cycle and its attractive PE multiples</li>
</ul>


We analyse ten Japanese midcap banks to target beneficiaries of the realization of strategic shareholdings, as well as beneficiaries of the improving interest rate outlook
We add Hachijuni Bank and Hokuhoku Financial to the buy list, based on the potential for realization of strategic holdings; these share-holdings are large relative to their respective market capitalizations
We maintain Gunma Bank on the buy list, primarily for its very strong gearing into the rising interest cycle and its attractive PE multiples


Japanese Midcap Banks – Three Key Picks

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

Thematic (Sector/Industry)

<ul>
<li>We derive which of Japan's banks may be most or least exposed to trading gains from divestment of cross-shareholdings.</li>
<li>Mizuho looks best of the megabanks and SMFG looks least good of the megabanks.</li>
<li>Japan Post Bank and SBI Shinsei may appear to have a high potential for selling domestic stocks, but we believe other drivers make them appear this way.</li>
</ul>


We derive which of Japan's banks may be most or least exposed to trading gains from divestment of cross-shareholdings.
Mizuho looks best of the megabanks and SMFG looks least good of the megabanks.
Japan Post Bank and SBI Shinsei may appear to have a high potential for selling domestic stocks, but we believe other drivers make them appear this way.


Japan Banks - Trading Gains and Cross-Shareholding Vary Widely Among Megabanks and Regionals

<ul>
<li>40% of Banks outside the Top 7 (none of which offered H1 guidance) in the TOPIX Banks Index have now changed H1 guidance or reported H1. 2 reported both up.</li>
<li>92% of the others have revised up H1 net income guidance a weighted average of 47%. Net Interest Income, Corporate fees/comms are up, expenses and credit costs are down.</li>
<li>Big tables with data, reasons for guidance changes, and buyback history of each presented below.</li>
</ul>


40% of Banks outside the Top 7 (none of which offered H1 guidance) in the TOPIX Banks Index have now changed H1 guidance or reported H1. 2 reported both up.
92% of the others have revised up H1 net income guidance a weighted average of 47%. Net Interest Income, Corporate fees/comms are up, expenses and credit costs are down.
Big tables with data, reasons for guidance changes, and buyback history of each presented below.


Japan H1 Bank Earnings: Interest/Fees Up, Expenses/Credit Costs Down - Opportunity Abounds, Still

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

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>Many indexes (ACWI-US,ACWX-US,etc.) are near support, and we could see a bear market bounce, but until these indexes reverse their downtrends and break above resistance levels, we cannot be bullish.</li>
<li>On a positive note, we are starting to see signs that inflation is peaking, as commodity prices have pulled back substantially, and the Energy/Materials Sectors are under significant pressure.</li>
<li>If inflation and commodity prices have indeed peaked, global equities are likely in the early stages of a bottoming process.</li>
</ul>


Many indexes (ACWI-US,ACWX-US,etc.) are near support, and we could see a bear market bounce, but until these indexes reverse their downtrends and break above resistance levels, we cannot be bullish.
On a positive note, we are starting to see signs that inflation is peaking, as commodity prices have pulled back substantially, and the Energy/Materials Sectors are under significant pressure.
If inflation and commodity prices have indeed peaked, global equities are likely in the early stages of a bottoming process.


Inflation Peaking?; ACWI, ACWI Ex-US Near Support; Many Bottoms-Up Stock Recommendations

Japan

The 77 Bank, Ltd. is a regional bank in Tohoku area.  The Bank provides general banking services including deposits, loans, and exchange transactions. The Bank also provides others financial services such as securities brokerage, trust banking, letter of credit, leasing, credit cards, and computer services.

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77 Bank Ltd/The (8341 JP)

Japan 2024 H1 Bank Guidance: Interest/Fees ⬆︎, Expenses/Credit Costs⬇︎ - Opportunity Good Still

10 of about 70 Japanese regional banks have revised guidance for the H1 to end-Sep 2024. The average gain is near 70% vs previous guidance. That's...

Travis Lundy

Japanese Midcap Banks – Three Key Picks

We focus on Japanese midcap banks' key shareholder attributes; Hachijuni and Hokuhoku added to buys for their large strategic holdings, while Gunma...

Victor Galliano

Japan Banks - Trading Gains and Cross-Shareholding Vary Widely Among Megabanks and Regionals

We look at how important or unimportant core banking income is to 50 banks in Japan, to better understand where divesting cross shareholding can be...

Daniel Tabbush

Japan H1 Bank Earnings: Interest/Fees Up, Expenses/Credit Costs Down - Opportunity Abounds, Still

The macro backdrop for Japanese banks is pretty good. Business restructuring efforts are bearing fruit. Global macro is adding fees. Stocks are up,...

Travis Lundy

Inflation Peaking?; ACWI, ACWI Ex-US Near Support; Many Bottoms-Up Stock Recommendations

We're starting to see signs that inflation is peaking, as commodity prices have pulled back substantially or are breaking, and the Energy $XLE and...

Vermilion Research

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