Founder Evidente. Top rated quantitative analyst, Evidente

Sam Ferraro

Founder Evidente. Top rated quantitative analyst

Evidente

Evidente is an independent financial education firm that delivers innovative financial advice to wholesale investors, including active long only funds, hedge funds, pension funds, and sovereign wealth funds, in Australia and globally.  Drawing on academic research in asset pricing, behavioural finance and portfolio construction, Evidente provides wholesale investors with commercial solutions to stock selection and asset allocation decisions across equities and other asset classes.

Equity Bottom-Up

<ul><li>The past six months has been a challenging period for global bank shareholders.  Global banks have declined by 20% since August, well below the 5% decline in the broader global market index.   European banks, particularly those in the periphery countries, have delivered dismal returns.  Despite the reduction of European banks' non-performing loans in the past two years, they still account for 7% of total loans, well above other developed markets.</li><li>In dissecting the global bank sector under-performance, I show that those that have delivered the worst returns have been the riskiest with low loss absorbing capital.  Despite global bankers' predictable chorus since the financial crisis that more stringent capital regulatory requirements are impeding their ability to lend, Evidente's analysis demonstrates that banks with more loss absorbing capital have been resilient to the market turbulence of the past six months.  Global bankers should therefore be grateful to Basel and prudential regulators.</li><li>Evidente's framework identifies two UK banks, RBS and Standard Chartered, as significantly overpriced.   Despite their high profitability adjusted book multiples, they remain poorly capitalised with few defensive attributes.  Further, they are unlikely to be cum-earnings upgrades because analysts have downgraded their 12 month forward EPS forecasts for RBS and Standard Chartered by 15% and 50% respectively in the past six months.   The possibility that global market sentiment swings quickly from risk aversion to risk appetite represents the key risk to an underweight or short position in these stocks.</li></ul>

The past six months has been a challenging period for global bank shareholders.  Global banks have declined by 20% since August, well below the 5% decline in the broader global market index.   European banks, particularly those in the periphery countries, have delivered dismal returns.  Despite the reduction of European banks' non-performing loans in the past two years, they still account for 7% of total loans, well above other developed markets.In dissecting the global bank sector under-performance, I show that those that have delivered the worst returns have been the riskiest with low loss absorbing capital.  Despite global bankers' predictable chorus since the financial crisis that more stringent capital regulatory requirements are impeding their ability to lend, Evidente's analysis demonstrates that banks with more loss absorbing capital have been resilient to the market turbulence of the past six months.  Global bankers should therefore be grateful to Basel and prudential regulators.Evidente's framework identifies two UK banks, RBS and Standard Chartered, as significantly overpriced.   Despite their high profitability adjusted book multiples, they remain poorly capitalised with few defensive attributes.  Further, they are unlikely to be cum-earnings upgrades because analysts have downgraded their 12 month forward EPS forecasts for RBS and Standard Chartered by 15% and 50% respectively in the past six months.   The possibility that global market sentiment swings quickly from risk aversion to risk appetite represents the key risk to an underweight or short position in these stocks.

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

<p>All major equities are again below the lows in 2015 after a dead-cat bounce sending another body-blow to global investor confidence.  Bottom fishers will be tentative and choppy bearish markets are likely to persist.  Financials (led by Europe) are leading the falls in equities; regulatory pressure implemented in the wake of the global and Eurozone financial crises and litigation and compliance costs since the LIBOR and FX fixing scandals are coming home to roost and creating an echo of the financial stress that undermined global economic confidence in the crises of the last decade.  EUR is whippy as investors cope with Euro-centric financial sector stress, but this is only likely to embolden the ECB to adopt more aggressive policy easing measures.  It is possible they emulate the BoJ and adopt a tiered cash rate policy resplendent with a much lower more negative marginal cash rate.  The outcome would be much lower yields across the EUR curve and a weaker EUR (we much prefer to sell EUR against Gold; as discussed in our previous two reports). Australia has proven resilient to global economic and financial stress, but its banks are being infected by global pressures, and we see a significant risk that RBA scope to cut rates turns into an obligation before long.  We see a fallback in the AUD (again we prefer to sell against gold).</p>

All major equities are again below the lows in 2015 after a dead-cat bounce sending another body-blow to global investor confidence.  Bottom fishers will be tentative and choppy bearish markets are likely to persist.  Financials (led by Europe) are leading the falls in equities; regulatory pressure implemented in the wake of the global and Eurozone financial crises and litigation and compliance costs since the LIBOR and FX fixing scandals are coming home to roost and creating an echo of the financial stress that undermined global economic confidence in the crises of the last decade.  EUR is whippy as investors cope with Euro-centric financial sector stress, but this is only likely to embolden the ECB to adopt more aggressive policy easing measures.  It is possible they emulate the BoJ and adopt a tiered cash rate policy resplendent with a much lower more negative marginal cash rate.  The outcome would be much lower yields across the EUR curve and a weaker EUR (we much prefer to sell EUR against Gold; as discussed in our previous two reports). Australia has proven resilient to global economic and financial stress, but its banks are being infected by global pressures, and we see a significant risk that RBA scope to cut rates turns into an obligation before long.  We see a fallback in the AUD (again we prefer to sell against gold).

AmpGFX - Dead-Cats and Body Blows, Financial Crisis Echo, RBA Scope to Become Obligation

Germany

Commerzbank AG attracts deposits and offers retail and commercial banking services.  The Bank offers mortgage loans, securities brokerage and asset management services, private banking, foreign exchange, and treasury services worldwide.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Commerzbank AG (CBK GR)

Bankers Should Be Grateful to Basel

The past six months has been a challenging period for global bank shareholders. Global banks have declined by 20% since August, well below the 5%...

Sam Ferraro

AmpGFX - Dead-Cats and Body Blows, Financial Crisis Echo, RBA Scope to Become Obligation

All major equities are again below the lows in 2015 after a dead-cat bounce sending another body-blow to global investor confidence. Bottom...

Greg Gibbs

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)