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

Thematic (Sector/Industry)

* Questionable Reduction in Reserve Coverage: Just as the wheels are about to fall off the bus, the China Bank Regulatory Commission (CBRC) - in their infinite wisdom – decided to allow Chinese banks to reduce the minimum NPL coverage ratio from 150% to 120%, and the minimum LLR cover of total loans from 2.5% to 1.5%.* Knee Jerk Reaction Is Silly – At Least For the 2nd Tier Banks:The 2nd tier banks carry the risk of substantially higher capital requirements and inadequate provisions as these…

* Questionable Reduction in Reserve Coverage: Just as the wheels are about to fall off the bus, the China Bank Regulatory Commission (CBRC) - in their infinite wisdom – decided to allow Chinese banks to reduce the minimum NPL coverage ratio from 150% to 120%, and the minimum LLR cover of total loans from 2.5% to 1.5%.* Knee Jerk Reaction Is Silly – At Least For the 2nd Tier Banks:The 2nd tier banks carry the risk of substantially higher capital requirements and inadequate provisions as these…

China Banks – Can You Say Capital Forbearance?

* Risk Increasing Within Tier 2 Banks:  The 2nd tier banks is looking increasingly vulnerable. Tighter asset management regulations are being implemented in March 2018 which should force the sector to abandon their high level of illiquid assets and promote “real” NAV-type products. This risk has now morphed into a size where confidence in the financial system could erode quickly. * Watch Your Insurers: Mainland Chinese insurers have 50%-60% of their investment portfolios exposed to the weakest…

* Risk Increasing Within Tier 2 Banks:  The 2nd tier banks is looking increasingly vulnerable. Tighter asset management regulations are being implemented in March 2018 which should force the sector to abandon their high level of illiquid assets and promote “real” NAV-type products. This risk has now morphed into a size where confidence in the financial system could erode quickly. * Watch Your Insurers: Mainland Chinese insurers have 50%-60% of their investment portfolios exposed to the weakest…

China Financials – The Accident About to Happen

* Circular 46 enabling the CBRC to properly do its job, as Shanghai Pudong Development Bank  - the first of many high profile names - gets exposed for aggressive accounting.  * HNA, China Wanda, and Anbang Insurance monkey business also expose numerous shenanigans in the corporate sector as well.<h2>Summary</h2>The appointment of Guo Shuqing to head the China Bank Regulatory Commission (CBRC) was a clear sign that the mainland Chinese authorities are intent on cleaning up some of the excesses within the…

* Circular 46 enabling the CBRC to properly do its job, as Shanghai Pudong Development Bank  - the first of many high profile names - gets exposed for aggressive accounting.  * HNA, China Wanda, and Anbang Insurance monkey business also expose numerous shenanigans in the corporate sector as well.SummaryThe appointment of Guo Shuqing to head the China Bank Regulatory Commission (CBRC) was a clear sign that the mainland Chinese authorities are intent on cleaning up some of the excesses within the…

China Banks – Questionable Accounting Practices Exposed

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

Actionable Charts from Smart Karma’s Most-Searched Tickers.We ran through a list of the most frequently searched tickers on the SmartKarma platform using the Discovery Tool.  Notable themes include:<ul><li>Add exposure to Energy and Materials. </li><li>Financial stocks are strengthening. </li><li>Avoid Australian banks. </li></ul>See the attached report for a complete list of our recommendations from this list.

Actionable Charts from Smart Karma’s Most-Searched Tickers.We ran through a list of the most frequently searched tickers on the SmartKarma platform using the Discovery Tool.  Notable themes include:Add exposure to Energy and Materials. Financial stocks are strengthening. Avoid Australian banks. See the attached report for a complete list of our recommendations from this list.

Equity Bottom-Up

* Problems at Group Lease (GL.TB) became more apparent with Ernst &amp; Young’s scathing 2016 audit report which questioned the integrity of inter-company loans, more liberal accounting policies, and the 30% purchase of a Sri Lankan company from a related party at a 120% market premium.* Among other items, an independent research report further alleged that Group Lease purposely misled investors, Ernst &amp; Young, and the Stock Exchange of Thailand (SET). Our own research suggests that each…

* Problems at Group Lease (GL.TB) became more apparent with Ernst &amp; Young’s scathing 2016 audit report which questioned the integrity of inter-company loans, more liberal accounting policies, and the 30% purchase of a Sri Lankan company from a related party at a 120% market premium.* Among other items, an independent research report further alleged that Group Lease purposely misled investors, Ernst &amp; Young, and the Stock Exchange of Thailand (SET). Our own research suggests that each…

China

China Merchants Bank Co., Ltd. operates as a commercial bank. The Company provides deposits, loans, wealth management, asset custody, finance leasing, investment banking, and other banking services. China Merchants Bank conducts businesses domestically and internationally.

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China Merchants Bank H (3968 HK)

China Banks – Can You Say Capital Forbearance?

* Questionable Reduction in Reserve Coverage: Just as the wheels are about to fall off the bus, the China Bank Regulatory Commission (CBRC) - in...

Thomas J. Monaco

China Financials – The Accident About to Happen

* Risk Increasing Within Tier 2 Banks: The 2nd tier banks is looking increasingly vulnerable. Tighter asset management regulations are being...

Thomas J. Monaco

China Banks – Questionable Accounting Practices Exposed

* Circular 46 enabling the CBRC to properly do its job, as Shanghai Pudong Development Bank - the first of many high profile names - gets exposed...

Thomas J. Monaco

Popular Stocks, Attractive Charts

Actionable Charts from Smart Karma’s Most-Searched Tickers.We ran through a list of the most frequently searched tickers on the SmartKarma platform...

Vermilion Research

Group Lease - Lessons from Icharus

* Problems at Group Lease (GL.TB) became more apparent with Ernst & Young’s scathing 2016 audit report which questioned the integrity of...

Thomas J. Monaco

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