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)

Risks regarding bill-financing business have recently become a new source of concern for Chinese banks.  Bill-financing frauds seen at both the Agricultural Bank of China, or ABC, and China Citic Bank, or Citic, indicate high operational risks.Since late 2015, the China Banking Regulatory Commission has been strengthening controls by identifying violations, including fraudulent transactions, the use of financing to inflate deposits and loans, and adjustments intended to lower capital charges.  We expect this to negatively affect certain banks with relatively heavy business exposures, including ABC, China Minsheng Bank, or CMBC, and Citic.Analyst: Iris Tan, CFA

Risks regarding bill-financing business have recently become a new source of concern for Chinese banks.  Bill-financing frauds seen at both the Agricultural Bank of China, or ABC, and China Citic Bank, or Citic, indicate high operational risks.Since late 2015, the China Banking Regulatory Commission has been strengthening controls by identifying violations, including fraudulent transactions, the use of financing to inflate deposits and loans, and adjustments intended to lower capital charges.  We expect this to negatively affect certain banks with relatively heavy business exposures, including ABC, China Minsheng Bank, or CMBC, and Citic.Analyst: Iris Tan, CFA 

Tightened Regulations on China's Bill Financing Pose NIM Pressures for Certain Banks

We've taken a close look at banks' energy exposures and potential losses, and see both good news and bad news for investors.First, the good news--for most banks, we think the losses will be manageable. And now the bad news-- nearly all banks are under-reserved and several could be facing capital shortfalls in a worst-case scenario.Analyst: Erin Davis

We've taken a close look at banks' energy exposures and potential losses, and see both good news and bad news for investors.First, the good news--for most banks, we think the losses will be manageable. And now the bad news-- nearly all banks are under-reserved and several could be facing capital shortfalls in a worst-case scenario.Analyst: Erin Davis

Banks Look Under-Reserved for Energy Losses

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.

The NPL crisis is upon us in China. It’s playing out even if it appears slow.Some of the first movers to show NPLs provide a guide as to what to expect for the more late bloomers.  The former group includes more foreign names and less mainstream banks. The latter group includes the large SOE banks and mainstream large banks.Along with a risk of rising NPLs, China's banks will also have to face liquidity, capital and off-balance sheet risks.

The NPL crisis is upon us in China. It’s playing out even if it appears slow.Some of the first movers to show NPLs provide a guide as to what to expect for the more late bloomers.  The former group includes more foreign names and less mainstream banks. The latter group includes the large SOE banks and mainstream large banks.Along with a risk of rising NPLs, China's banks will also have to face liquidity, capital and off-balance sheet risks.

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Event-Driven

For anyone looking at <a href="https://www.smartkarma.com/entities/589" target="_blank" data-smartkarma-citation="entities:589">Dah Sing Financial Holdings</a> - and for those of you not looking, you should be - an article out a few hours ago makes clear that the plan described in my piece <a href="https://www.smartkarma.com/insights/dah-sing-ka-ching" target="_blank" data-smartkarma-citation="insights:2323">Dah Sing Ka Ching?</a> (13 Jan) is on its way. Another piece of news is that Elliott has launched a campaign to shareholders of BEA that could affect the originally recommended hedge.This bodes well for shares of Dah Sing FH, and possibly of <a href="https://www.smartkarma.com/entities/342" target="_blank" data-smartkarma-citation="entities:342">Dah Sing Banking Group</a>. A successful transaction to sell DSFH's insurance unit…

For anyone looking at Dah Sing Financial Holdings - and for those of you not looking, you should be - an article out a few hours ago makes clear that the plan described in my piece Dah Sing Ka Ching? (13 Jan) is on its way. Another piece of news is that Elliott has launched a campaign to shareholders of BEA that could affect the originally recommended hedge.This bodes well for shares of Dah Sing FH, and possibly of Dah Sing Banking Group. A successful transaction to sell DSFH's insurance unit…

Equity Bottom-Up

China’s foreign exchange regulator has recently tightened restrictions on purchases of insurance products overseas, as purchases of insurance products using UnionPay cards will be capped at $5,000 per transaction, effective Feb. 4.Given that there’s no limit on the number of transactions per day, the transaction cap alone is likely to have a very limited impact on regular premium products, as the average new premium is estimated at HKD 50,000, slightly above the limit of $5,000 (or HKD 38,750). Analyst: Iris Tan, CFA

China’s foreign exchange regulator has recently tightened restrictions on purchases of insurance products overseas, as purchases of insurance products using UnionPay cards will be capped at $5,000 per transaction, effective Feb. 4.Given that there’s no limit on the number of transactions per day, the transaction cap alone is likely to have a very limited impact on regular premium products, as the average new premium is estimated at HKD 50,000, slightly above the limit of $5,000 (or HKD 38,750). Analyst: Iris Tan, CFA

Transaction Cap by UnionPay Should Have Limited Impact on AIA

Hong Kong

AIA Group Limited offers insurance and financial services. The Company writes life insurance for individuals, businesses, accident, and health insurance, as well as retirement planning and wealth management services.

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AIA Group Ltd (1299 HK)

Tightened Regulations on China's Bill Financing Pose NIM Pressures for Certain Banks

Risks regarding bill-financing business have recently become a new source of concern for Chinese banks. Bill-financing frauds seen at both the...

Morningstar, Inc.

Banks Look Under-Reserved for Energy Losses

We've taken a close look at banks' energy exposures and potential losses, and see both good news and bad news for investors.First, the good...

Morningstar, Inc.

It Is All Playing Out with China's Banks

The NPL crisis is upon us in China. It’s playing out even if it appears slow.Some of the first movers to show NPLs provide a guide as to what to...

Daniel Tabbush

Dah Sing - Ka Ching Ka Ching?

For anyone looking at Dah Sing Financial Holdings - and for those of you not looking, you should be - an article out a few hours ago makes clear...

Travis Lundy

Transaction Cap by UnionPay Should Have Limited Impact on AIA

China’s foreign exchange regulator has recently tightened restrictions on purchases of insurance products overseas, as purchases of insurance...

Morningstar, Inc.

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