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 MSCI ACWI ETF / Technical Analysis

<ul>
<li>Market dynamics remain healthy and we are continuing to see signs that suggest global equities are entering a new broad-based bull market.</li>
<li>Led by strength from the US, the MSCI ACWI index (ACWI-US) recently broke out to new highs above the key $105.40 resistance level, a bullish sign for global equities.</li>
<li>Global sovereign yields have moved lower in recent weeks. We expect rates to find support near current levels, creating an opportunity to add to value Sectors.</li>
</ul>


Market dynamics remain healthy and we are continuing to see signs that suggest global equities are entering a new broad-based bull market.
Led by strength from the US, the MSCI ACWI index (ACWI-US) recently broke out to new highs above the key $105.40 resistance level, a bullish sign for global equities.
Global sovereign yields have moved lower in recent weeks. We expect rates to find support near current levels, creating an opportunity to add to value Sectors.


MSCI ACWI Breaking To New Highs; Buying Financials, Consumer Discretionary, Industrials, Materials

Market dynamics remain healthy which suggests a new broad-based bull market is not far off. With that said, we are still waiting for confirmation in the form of breakouts or bullish price inflections on the broad global indexes (ACWI-US, ACWX-US, EFA-US, and EEM-US) in order to turn bullish.<ul type="disc">
<li>
Actionable Theme: Major Autos/Auto Parts. Global automobile stocks display bullish price and RS inflections with many breaking out to new highs -- add exposure... see pages 3 and 5-6.</li>
<li>
Actionable Theme: Financials. There continues to be a plethora of attractive Financial stocks globally, ranging from banks and insurance to financial services -- add exposure... see pages 4 and 6-14.</li>
</ul>

Market dynamics remain healthy which suggests a new broad-based bull market is not far off. With that said, we are still waiting for confirmation in the form of breakouts or bullish price inflections on the broad global indexes (ACWI-US, ACWX-US, EFA-US, and EEM-US) in order to turn bullish.

Actionable Theme: Major Autos/Auto Parts. Global automobile stocks display bullish price and RS inflections with many breaking out to new highs -- add exposure... see pages 3 and 5-6.

Actionable Theme: Financials. There continues to be a plethora of attractive Financial stocks globally, ranging from banks and insurance to financial services -- add exposure... see pages 4 and 6-14.


Buying Global Financials & Autos/Auto Parts

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Fubon Financial Holding Co / Event-Driven

<a href="https://www.smartkarma.com/entities/fubon-financial-holding-co" target="_blank" data-smartkarma-citation="entities:11869:1" rel="noopener">Fubon Financial Holding Co (2881 TT)</a> announced many months ago when it took over <a href="https://www.smartkarma.com/entities/jih-sun-financial-holdings" target="_blank" data-smartkarma-citation="entities:17971:1" rel="noopener">Jih Sun Financial (5820 TT)</a> that it would do an equity raise to do so. In Taiwan, doing an equity raise via rights issue is a relatively common event. The company applied to do so, got permission in early August, then announced in late August a timeline and key details as it announced its H1 results. <a href="https://www.smartkarma.com/profiles/janaghan-jeyakumar-cfa" target="_blank" data-smartkarma-citation="accounts:3173" rel="noopener">Janaghan Jeyakumar, CFA</a> discussed this rights issue in <a href="https://www.smartkarma.com/insights/fubon-financial-holding-co-2881-tt-rights-issue" target="_blank" data-smartkarma-citation="insights:56572" rel="noopener">Fubon Financial Holding Co (2881 TT): Rights Issue</a> a week ago. Pricing was expected to be confirmed in the days ahead, and it has been confirmed. The 548,000,000 common shares will be issued at NT$58.9/share each. The 333,330,000 C Class Preferred Shares (non-cumulative dividend) will be issued at NT$60/share each. The dividend rate was set at 3.0% (7yr IRS + a fixed spread (7yr IRS 0.6538% + 2.3462% spread)). I called the company to chat and had some questions. They got back to me today.

Fubon Financial Holding Co (2881 TT) announced many months ago when it took over Jih Sun Financial (5820 TT) that it would do an equity raise to do so. In Taiwan, doing an equity raise via rights issue is a relatively common event. The company applied to do so, got permission in early August, then announced in late August a timeline and key details as it announced its H1 results. Janaghan Jeyakumar, CFA discussed this rights issue in Fubon Financial Holding Co (2881 TT): Rights Issue a week ago. Pricing was expected to be confirmed in the days ahead, and it has been confirmed. The 548,000,000 common shares will be issued at NT$58.9/share each. The 333,330,000 C Class Preferred Shares (non-cumulative dividend) will be issued at NT$60/share each. The dividend rate was set at 3.0% (7yr IRS + a fixed spread (7yr IRS 0.6538% + 2.3462% spread)). I called the company to chat and had some questions. They got back to me today. 

Fubon Financial Rights - Common Share Rights Should Be Exercised, Pref Rights Are Worth Near Zero

External broker reports(aggregated public sources), Capital Securities Corp

Capital Securities

External broker reports(aggregated public sources)

Equity Bottom-Up

E.Sun Financial Holding Co / Equity Bottom-Up

Revenue/earnings may resume growth in FY21; recommend TRADING BUY. The FHC maintains momentum across its core businesses. In addition to rising loan demand, its asset and capital both appear sound. Thus, we reiterate TRADING BUY with TP of NTD28.0 (1.6x FY20 PBR).<div class="content-highlight">Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</div>

Revenue/earnings may resume growth in FY21; recommend TRADING BUY. The FHC maintains momentum across its core businesses. In addition to rising loan demand, its asset and capital both appear sound. Thus, we reiterate TRADING BUY with TP of NTD28.0 (1.6x FY20 PBR).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

E.Sun FHC (2884 TT, TRADING BUY, NTD35.8)

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

Yuanta Financial Holding Co / Equity Bottom-Up

*Very Solid 1Q21: Yuanta Financial Holding (2885.TT) [Yuanta] reported 1Q21 results of NTD 9.4 bn, increasing NTD 4.9 bn (107.5%) linked quarter. Much of Yuanta’s linked quarter growth can be attributed to strong net interest income growth from both a margin loan and bank loan balance increases; a significant reduction in loss provisioning; and net fee improvement on the back of an ADTV increase on the TAIEX; and*Hidden Yuanta Earnings At Bank: At 21% of Yuanta’s bottom-line, Yunata Bank posted strong core operating results as well – NTD 2.0 bn, increasing NTD 731 mn or 59.2% linked quarter. Reserve cover of NPLs is extraordinary and the best we’ve seen in Asia thus far at 12.1x. By our calculation, Yuanta Bank has over reserved and can release upward of NTD 10.5 bn – representing over one quarter of Yuanta’s quarterly bottom-line.

*Very Solid 1Q21: Yuanta Financial Holding (2885.TT) [Yuanta] reported 1Q21 results of NTD 9.4 bn, increasing NTD 4.9 bn (107.5%) linked quarter. Much of Yuanta’s linked quarter growth can be attributed to strong net interest income growth from both a margin loan and bank loan balance increases; a significant reduction in loss provisioning; and net fee improvement on the back of an ADTV increase on the TAIEX; and*Hidden Yuanta Earnings At Bank: At 21% of Yuanta’s bottom-line, Yunata Bank posted strong core operating results as well – NTD 2.0 bn, increasing NTD 731 mn or 59.2% linked quarter. Reserve cover of NPLs is extraordinary and the best we’ve seen in Asia thus far at 12.1x. By our calculation, Yuanta Bank has over reserved and can release upward of NTD 10.5 bn – representing over one quarter of Yuanta’s quarterly bottom-line.

Yuanta Financial Holding – Firing On All Cylinders

Taiwan

E.Sun Financial Holding Company Ltd. is a holding company.  Through its subsidiaries, the Company provides banking, brokerage and dealer services.

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E.Sun Financial Holding Co (2884 TT)

MSCI ACWI Breaking To New Highs; Buying Financials, Consumer Discretionary, Industrials, Materials

Global sovereign yields have moved lower in recent weeks. We expect rates to find support near current levels, and recommend adding exposure to...

Vermilion Research

Buying Global Financials & Autos/Auto Parts

Global automobile stocks display bullish price and RS inflections with many breaking out to new highs. Financials are attractive globally, ranging...

Vermilion Research

E.Sun FHC (2884 TT, TRADING BUY, NTD35.8)

Revenue/earnings may resume growth in FY21; recommend TRADING BUY. The FHC maintains momentum across its core businesses. In addition to rising...

Capital Securities

Yuanta Financial Holding – Firing On All Cylinders

YUANTA FINANCIAL: Yuanta reported a QOQ 1Q21 results increase of 107.5%, attributed to strong net interest income growth and a provision reduction....

Thomas J. Monaco

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52-week Range

Market Cap (USDm)

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MSCI ACWI Breaking To New Highs; Buying Financials, Consumer Discretionary, Industrials, Materials

Global sovereign yields have moved lower in recent weeks. We expect rates to find support near current levels, and recommend adding exposure to...

Vermilion Research

Buying Global Financials & Autos/Auto Parts

Global automobile stocks display bullish price and RS inflections with many breaking out to new highs. Financials are attractive globally, ranging...

Vermilion Research

Fubon Financial Rights - Common Share Rights Should Be Exercised, Pref Rights Are Worth Near Zero

Fubon Financial will issue Rights. Rights go ex- on 6 Sep. The Common Share Rights are worth exercising unless the stock plummets. The Pref Rights...

Travis Lundy

E.Sun FHC (2884 TT, TRADING BUY, NTD35.8)

Revenue/earnings may resume growth in FY21; recommend TRADING BUY. The FHC maintains momentum across its core businesses. In addition to rising...

Capital Securities

Yuanta Financial Holding – Firing On All Cylinders

YUANTA FINANCIAL: Yuanta reported a QOQ 1Q21 results increase of 107.5%, attributed to strong net interest income growth and a provision reduction....

Thomas J. Monaco