Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Thematic (Sector/Industry)

<ul><li>ISA (individual savings account) could be a pivotal turning point for Korea's brokerage sector and Korean stock market, similar to how the introduction of 401(k) plan has been so important in encouraging equity participation in the US.</li><li>There were 658,040 new ISA accounts that were opened in Korea from March 14th (start of ISA) to 18th with total amount of 320 billion won.</li><li>A major purpose of the ISA is to provide tax breaks to Korean people so that they could reduce their tax burden and invest more for the long term.</li><li>One of the most important developments arising from the ISAs will be the encouragement of longer term equity culture in Korea.</li><li>We highlight a securities focused ETF called KODEX Securities (102970), which includes the major brokers such as <a href="https://www.smartkarma.com/entities/14560" target="_blank" data-smartkarma-citation="entities:14560">Mirae Asset Securities Co., Ltd.</a> , <a href="https://www.smartkarma.com/entities/512" target="_blank" data-smartkarma-citation="entities:512">Samsung Securities Co Ltd</a> , and <a href="https://www.smartkarma.com/entities/14839" target="_blank" data-smartkarma-citation="entities:14839">Korea Investment Holdings Co., Ltd.</a>  For those who want a broad exposure to the securities sector in Korea but want to limit company specific risks, this could be an attractive ETF product. </li></ul>

ISA (individual savings account) could be a pivotal turning point for Korea's brokerage sector and Korean stock market, similar to how the introduction of 401(k) plan has been so important in encouraging equity participation in the US.There were 658,040 new ISA accounts that were opened in Korea from March 14th (start of ISA) to 18th with total amount of 320 billion won.A major purpose of the ISA is to provide tax breaks to Korean people so that they could reduce their tax burden and invest more for the long term.One of the most important developments arising from the ISAs will be the encouragement of longer term equity culture in Korea.We highlight a securities focused ETF called KODEX Securities (102970), which includes the major brokers such as Mirae Asset Securities Co., Ltd. , Samsung Securities Co Ltd , and Korea Investment Holdings Co., Ltd.  For those who want a broad exposure to the securities sector in Korea but want to limit company specific risks, this could be an attractive ETF product. 

ISA - Could Be a Pivotal Turning Point for Korea's Brokerage Sector

FX Strategist

Greg Gibbs

Fundamental analysis of topical themes in FX

Amplifying Global FX Capital

Amplifying Global FX Capital was founded in 2015 and is fully owned by Greg Gibbs. It is a registered company both in Australia and Colorado, USA and is a licensed in Australia to provide financial services.

We are producing a regular trading view orientated macroeconomic analysis of topical themes in global financial markets, with a particular focus on foreign exchange. We invite you to view an “executive summary” of these reports in “AmpGFX Reports” under our “Research” menu.

These reports are drawn from the analysis of Greg Gibbs and inform the capital management he undertakes on behalf of the company. The trading performance is posted periodically on our website. We aim to build our company into both a research and capital management business. We are currently in the planning phase for managing capital for wholesale customers.

Greg Gibbs has spent his working life of more than 26 years in financial markets, beginning in 1989 at the Reserve Bank of Australia, after completing a Bachelor of Economics Degree (Honours) at the Australian National University. He has been a CFA Charterholder since 2005. He has worked in Sydney, Singapore, New York and London for major global banks and presented on foreign exchange markets to major financial institutions and companies around the world, and maintained a high profile in the financial media.

Before Amplifying Global FX Capital, Greg was the Head of Asia Pacific Market Strategy at the Royal Bank of Scotland based Singapore. He now resides in Breckenridge Colorado.

Macroeconomics

The ECB delivered a comprehensive set of further policy easing measures.  But it eschewed the concept of a tiered rate policy, in contrast to the BoJ, and suggested that it was unlikely to target further declines in cash rates.  Its policies are more focused on boosting domestic asset prices and domestic bank lending and place less emphasis on a weaker exchange rate policy.  Since the ECB set its course to further ease policy at its 22-October 2015 policy meeting, the market has presumed that it favored lower interest rates.  It has now signaled it has reached bottom on this path, just as the BoJ has diverted its attention to negative interest rates.  As such, we see a case for a recovery in EUR/JPY, potentially retracing the significant fall since October last year.

The ECB delivered a comprehensive set of further policy easing measures.  But it eschewed the concept of a tiered rate policy, in contrast to the BoJ, and suggested that it was unlikely to target further declines in cash rates.  Its policies are more focused on boosting domestic asset prices and domestic bank lending and place less emphasis on a weaker exchange rate policy.  Since the ECB set its course to further ease policy at its 22-October 2015 policy meeting, the market has presumed that it favored lower interest rates.  It has now signaled it has reached bottom on this path, just as the BoJ has diverted its attention to negative interest rates.  As such, we see a case for a recovery in EUR/JPY, potentially retracing the significant fall since October last year.

AmpGFX - ECB and BoJ Policy Easing Paths Diverge

Global Macro Strategy

Callum Henderson

* The BoJ shocked the market, cutting rates to negative and threatening further rate cuts if needed* The apparent change in BoJ stance has to be viewed in the wake of the ECB and Fed statements* The BoJ rate cut is a de facto protest of tighter Japanese monetary conditions due to JPY strength* Leveraged funds on the CFTC had the largest long JPY position ahead of this since October 2012* Recent JPY gains are likely to retrace over the next few weeks, notably against AUD, INR and KRW

* The BoJ shocked the market, cutting rates to negative and threatening further rate cuts if needed* The apparent change in BoJ stance has to be viewed in the wake of the ECB and Fed statements* The BoJ rate cut is a de facto protest of tighter Japanese monetary conditions due to JPY strength* Leveraged funds on the CFTC had the largest long JPY position ahead of this since October 2012* Recent JPY gains are likely to retrace over the next few weeks, notably against AUD, INR and KRW

Asia Calling: From Currency Wars to Competitive Monetary Easing

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.

As Japan enters recession with -1.2% annualized GDP growth in 2Q15 (from +4.5% in first quarter) we need to consider how banks can ill-afford higher credit costs.Average ROA is only 0.34%, the lowest in Asia by far.&nbsp;Where many of Japan&rsquo;s banks have enjoyed negative credit costs for one to two years, it will come as shock when loan loss provision (LLP)expenses normalize &ndash; or worse.ROA will disappear altogether for some? &nbsp;It wouldn&rsquo;t be the first time.&nbsp; Full insight below the fold...

As Japan enters recession with -1.2% annualized GDP growth in 2Q15 (from +4.5% in first quarter) we need to consider how banks can ill-afford higher credit costs.Average ROA is only 0.34%, the lowest in Asia by far.&nbsp;Where many of Japan&rsquo;s banks have enjoyed negative credit costs for one to two years, it will come as shock when loan loss provision (LLP)expenses normalize &ndash; or worse.ROA will disappear altogether for some? &nbsp;It wouldn&rsquo;t be the first time.&nbsp; Full insight below the fold...

Low returns in Japan can not afford impending recession

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Event-Driven

Last November, Higashi Nippon Bank and the Bank of Yokohama announced that they were considering an integration under a holding company structure.The two banks had looked at each other, decided there was little overlap, and decided that they could make use of each others' advantages. BOY is relatively large, and therefore has scale merits on a cost basis, and HNB has a very hands-on lending department (with relatively low NPLs&nbsp;and&nbsp;not awful&nbsp;NIMs (for a Japanese bank)) and it is well-placed in Tokyo - which is home of the 2020 Olympics and the only region scheduled to see positive population growth over the next decade.&nbsp;The two companies announced at the time they would look to come to a Basic Agreement in September 2015 and form their HoldCo in April 2016.We are now one month from that Basic Agreement decision, including a merger ratio announcement. In this piece we discuss merger ratio setting, and what are the possibilities for this particular deal.A lot more below the fold for subscribers...&nbsp;

Last November, Higashi Nippon Bank and the Bank of Yokohama announced that they were considering an integration under a holding company structure.The two banks had looked at each other, decided there was little overlap, and decided that they could make use of each others' advantages. BOY is relatively large, and therefore has scale merits on a cost basis, and HNB has a very hands-on lending department (with relatively low NPLs&nbsp;and&nbsp;not awful&nbsp;NIMs (for a Japanese bank)) and it is well-placed in Tokyo - which is home of the 2020 Olympics and the only region scheduled to see positive population growth over the next decade.&nbsp;The two companies announced at the time they would look to come to a Basic Agreement in September 2015 and form their HoldCo in April 2016.We are now one month from that Basic Agreement decision, including a merger ratio announcement. In this piece we discuss merger ratio setting, and what are the possibilities for this particular deal.A lot more below the fold for subscribers...&nbsp;

Japan

The Bank of Yokohama Ltd. offers banking services. The Company provides deposits, loans, fund management, and other services. The Bank of Yokohama offers services to individuals, companies, and other groups.

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Bank Of Yokohama (8332 JP)

ISA - Could Be a Pivotal Turning Point for Korea's Brokerage Sector

ISA (individual savings account) could be a pivotal turning point for Korea's brokerage sector and Korean stock market, similar to how the...

Douglas Kim

AmpGFX - ECB and BoJ Policy Easing Paths Diverge

The ECB delivered a comprehensive set of further policy easing measures. But it eschewed the concept of a tiered rate policy, in contrast to the...

Greg Gibbs

Asia Calling: From Currency Wars to Competitive Monetary Easing

* The BoJ shocked the market, cutting rates to negative and threatening further rate cuts if needed* The apparent change in BoJ stance has to be...

Callum Henderson

Low returns in Japan can not afford impending recession

As Japan enters recession with -1.2% annualized GDP growth in 2Q15 (from +4.5% in first quarter) we need to consider how banks can ill-afford...

Daniel Tabbush

A Low Risk Merger Ratio Bet

Last November, Higashi Nippon Bank and the Bank of Yokohama announced that they were considering an integration under a holding company...

Travis Lundy

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