Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

* Deutsche Bank USA Fails CCAR and Capital Infusion Likely Necessary;* Several Other Banks Passed Conditionally; and *  Deutsche’s  CDS spreads are significantly wider; the belated S&amp;P downgrade continues to suggest that Deutsche is far from being out of the woods;  and  the HNA Group and Qatari Share Dumps To Continue. <h2>Investment Summary</h2>All but one of the 35 commercial banks have passed the Federal Reserve Board's Comprehensive Capital Analysis and Review (CCAR) stress test inclusive of…

* Deutsche Bank USA Fails CCAR and Capital Infusion Likely Necessary;* Several Other Banks Passed Conditionally; and *  Deutsche’s  CDS spreads are significantly wider; the belated S&amp;P downgrade continues to suggest that Deutsche is far from being out of the woods;  and  the HNA Group and Qatari Share Dumps To Continue. Investment SummaryAll but one of the 35 commercial banks have passed the Federal Reserve Board's Comprehensive Capital Analysis and Review (CCAR) stress test inclusive of…

* Well Written Plan, Does Not Suggest Its Viable:  Strategic priorities are similar to those of the previous 3 year Strategic Plan: a) continue the pivot toward Asia; b) focus on the international network; c) turn around the US business; and d) invest for future growth.* New Plan Does Not Add Up: That said, the updated strategic plan is confusing and very simply does not add up – especially considering that HSBC will be limiting loan growth to 1-2% per annum. The greater than 6% RoTE target for…

* Well Written Plan, Does Not Suggest Its Viable:  Strategic priorities are similar to those of the previous 3 year Strategic Plan: a) continue the pivot toward Asia; b) focus on the international network; c) turn around the US business; and d) invest for future growth.* New Plan Does Not Add Up: That said, the updated strategic plan is confusing and very simply does not add up – especially considering that HSBC will be limiting loan growth to 1-2% per annum. The greater than 6% RoTE target for…

HSBC Holdings Plc– New Strategic Plan Is Complete Nonsense

*5.5% HNA Group stake Being Liquidated. * 6.1% Qatar Stake Likely Next to Be Liquidated.  <h2>Investment Summary</h2>HNA Group (HNA) [private] in mainland China has been aggressively reducing its Deutsche Bank (DBK.GY/DB.US) [Deutsche] stake since the beginning of 2018 due to its own short-term financing needs. At the end of the day, we would not be shocked to see HNA (5.5% stake today vs. 9.1% at the peak) to completely liquidate its entire Deutsche position.Much more concerning, however, are press…

*5.5% HNA Group stake Being Liquidated. * 6.1% Qatar Stake Likely Next to Be Liquidated.  Investment SummaryHNA Group (HNA) [private] in mainland China has been aggressively reducing its Deutsche Bank (DBK.GY/DB.US) [Deutsche] stake since the beginning of 2018 due to its own short-term financing needs. At the end of the day, we would not be shocked to see HNA (5.5% stake today vs. 9.1% at the peak) to completely liquidate its entire Deutsche position.Much more concerning, however, are press…

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)

While the Fed raises rates, there is little in US bank data that suggests credit demand is improving. Typically interest rates are considered to be the price of money, and this will often be driven by credit demand. There continues to be a disconnect, where rates are rising due to supply and policy measures, it can send the wrong signal. We have seen with many consumer finance companies, rising charge-off rates (NCO), which is not consistent with a robust economy.  At the same time, we have seen…

While the Fed raises rates, there is little in US bank data that suggests credit demand is improving. Typically interest rates are considered to be the price of money, and this will often be driven by credit demand. There continues to be a disconnect, where rates are rising due to supply and policy measures, it can send the wrong signal. We have seen with many consumer finance companies, rising charge-off rates (NCO), which is not consistent with a robust economy.  At the same time, we have seen…

US Banks – Less Strong Demand in Key Credit Segments

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

Financials, especially the large-cap brokers have suffered severe pullbacks recently. If these stocks cannot sustain a reversal in the next few days, we believe the markets could suffer a more severe pullback. Many of these names are suffering uptrend violations in price and RS, as well as bearish descending triangle patterns. The Sector is showing signs deteriorating breadth as well. In today’s report we highlight concerning charts within Financial Sector.

Financials, especially the large-cap brokers have suffered severe pullbacks recently. If these stocks cannot sustain a reversal in the next few days, we believe the markets could suffer a more severe pullback. Many of these names are suffering uptrend violations in price and RS, as well as bearish descending triangle patterns. The Sector is showing signs deteriorating breadth as well. In today’s report we highlight concerning charts within Financial Sector.

U.S. Equity Strategy: Financials Struggling, Tech and Energy Leading

United States

Bank of America Corporation accepts deposits and offers banking, investing, asset management, and other financial and risk-management products and services.  The Company has a mortgage lending subsidiary, and an investment banking and securities brokerage subsidiary.

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Bank Of America (BAC US)

Deutsche Bank - Failed CCAR

* Deutsche Bank USA Fails CCAR and Capital Infusion Likely Necessary;* Several Other Banks Passed Conditionally; and * Deutsche’s CDS spreads are...

Thomas J. Monaco

HSBC Holdings Plc– New Strategic Plan Is Complete Nonsense

* Well Written Plan, Does Not Suggest Its Viable: Strategic priorities are similar to those of the previous 3 year Strategic Plan: a) continue the...

Thomas J. Monaco

Deutsche Bank – Puke

5.5% HNA Group stake Being Liquidated. 6.1% Qatar Stake Likely Next to Be Liquidated. Investment SummaryHNA Group (HNA) [private] in mainland...

Thomas J. Monaco

US Banks – Less Strong Demand in Key Credit Segments

While the Fed raises rates, there is little in US bank data that suggests credit demand is improving. Typically interest rates are considered to be...

Daniel Tabbush

U.S. Equity Strategy: Financials Struggling, Tech and Energy Leading

Financials, especially the large-cap brokers have suffered severe pullbacks recently. If these stocks cannot sustain a reversal in the next few...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Deutsche Bank - Failed CCAR

* Deutsche Bank USA Fails CCAR and Capital Infusion Likely Necessary;* Several Other Banks Passed Conditionally; and * Deutsche’s CDS spreads are...

Thomas J. Monaco

HSBC Holdings Plc– New Strategic Plan Is Complete Nonsense

* Well Written Plan, Does Not Suggest Its Viable: Strategic priorities are similar to those of the previous 3 year Strategic Plan: a) continue the...

Thomas J. Monaco

Deutsche Bank – Puke

*5.5% HNA Group stake Being Liquidated. * 6.1% Qatar Stake Likely Next to Be Liquidated. Investment SummaryHNA Group (HNA) [private] in mainland...

Thomas J. Monaco

US Banks – Less Strong Demand in Key Credit Segments

While the Fed raises rates, there is little in US bank data that suggests credit demand is improving. Typically interest rates are considered to be...

Daniel Tabbush

U.S. Equity Strategy: Financials Struggling, Tech and Energy Leading

Financials, especially the large-cap brokers have suffered severe pullbacks recently. If these stocks cannot sustain a reversal in the next few...

Vermilion Research

5.5% HNA Group stake Being Liquidated. 6.1% Qatar Stake Likely Next to Be Liquidated. Investment SummaryHNA Group (HNA) [private] in mainland...