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>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

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

<ul>
<li>We screen for stocks at the extreme ends of their positioning or momentum ranges among active Emerging Market equity funds.</li>
<li>High Positioning, Negative Momentum: BYD Company Limited Class H, Novatek Microelectronics Corp.</li>
<li>Low Positioning, Negative Momentum: Banco Bradesco SA Pfd, LG Chem Ltd.    </li>
</ul>


We screen for stocks at the extreme ends of their positioning or momentum ranges among active Emerging Market equity funds.
High Positioning, Negative Momentum: BYD Company Limited Class H, Novatek Microelectronics Corp.
Low Positioning, Negative Momentum: Banco Bradesco SA Pfd, LG Chem Ltd.    


<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

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Quantitative Analysis

<ul>
<li>During 1Q2024, the 200 largest weighted companies in the GEM index reported average EPS growth of +8.7%y/y, down slightly from the +10.1% reported during 4Q2023.</li>
<li>Only 47% of companies delivered positive EPS surprises, and only 44% delivered positive Sales surprises, a sharp correction from the positive trend witnessed during 2023.</li>
<li>Historically, there has been a significant difference in relative share price performance between the largest positive versus negative surprise generators, for 3 months after the reporting date.</li>
</ul>


During 1Q2024, the 200 largest weighted companies in the GEM index reported average EPS growth of +8.7%y/y, down slightly from the +10.1% reported during 4Q2023.
Only 47% of companies delivered positive EPS surprises, and only 44% delivered positive Sales surprises, a sharp correction from the positive trend witnessed during 2023.
Historically, there has been a significant difference in relative share price performance between the largest positive versus negative surprise generators, for 3 months after the reporting date.


Global Emerging Markets: Reporting Season Summary, 1Q2024

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 Russell 2000 ETF / Technical Analysis

<ul>
<li>The market remains in "lockout rally" mode, where prices continue to move higher with little-to-no pullbacks, while ignoring overbought readings.</li>
<li>We have discussed this on a weekly basis since 11/21/23. Still no reason to fight this bullish trend, and we continue to expect more upside into year-end and early 2024.</li>
<li>We highlight buys in Steel: NUE, STLD, RS, WOR, TMST, ZEUS, LatAm Banks: ITUB, BSBR, BBD, BAP, BCH, Industrials: ITT, FSS, SPXC, ATS, KAI, CR, BRC, SXI, and HSC</li>
</ul>


The market remains in "lockout rally" mode, where prices continue to move higher with little-to-no pullbacks, while ignoring overbought readings.
We have discussed this on a weekly basis since 11/21/23. Still no reason to fight this bullish trend, and we continue to expect more upside into year-end and early 2024.
We highlight buys in Steel: NUE, STLD, RS, WOR, TMST, ZEUS, LatAm Banks: ITUB, BSBR, BBD, BAP, BCH, Industrials: ITT, FSS, SPXC, ATS, KAI, CR, BRC, SXI, and HSC


Russell 2000 Testing 1.5+ Year Resistance; Downgrading Communications; Steel Buys $NUE $STLD $ZEUS

Brazil

Banco Bradesco S.A. attracts deposits and offers commercial banking services. The Bank offers business loans, personal credit, mortgages, lease financing, mutual funds, securities brokerage, and Internet banking services.  Bradesco operates in Brazil and Argentina, the United States, the Cayman Islands, and the United Kingdom.  Bradesco offers credit cards, insurance, and pension funds.

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Banco Bradesco (BBDC4 BZ)

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 Funds: Extreme Stocks, July 2024

We screen for stocks at the extreme ends of their positioning or momentum ranges. We combine current and historical data with recent manager...

Steven Holden

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

Global Emerging Markets: Reporting Season Summary, 1Q2024

In this quarterly insight, we analyse recent GEM reporting trends by looking at Sales and EPS growth, size and percentage of positive surprises,...

Wium Malan, CFA

Russell 2000 Testing 1.5+ Year Resistance; Downgrading Communications; Steel Buys $NUE $STLD $ZEUS

Market remains in a "lockout rally" where prices continue to move higher with little-to-no pullbacks, while ignoring overbought readings -- as we...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

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 Funds: Extreme Stocks, July 2024

We screen for stocks at the extreme ends of their positioning or momentum ranges. We combine current and historical data with recent manager...

Steven Holden

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

Global Emerging Markets: Reporting Season Summary, 1Q2024

In this quarterly insight, we analyse recent GEM reporting trends by looking at Sales and EPS growth, size and percentage of positive surprises,...

Wium Malan, CFA

Russell 2000 Testing 1.5+ Year Resistance; Downgrading Communications; Steel Buys $NUE $STLD $ZEUS

Market remains in a "lockout rally" where prices continue to move higher with little-to-no pullbacks, while ignoring overbought readings -- as we...

Vermilion Research

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...