Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

Juroku Financial Group / Equity Bottom-Up

<ul>
<li>We update twelve Japanese regional banks, and add two new names, to target beneficiaries of the improving interest rate outlook; also banks with attractive credit quality, capital adequacy and valuations</li>
<li>We identify the value of equity holdings for disposal among these banks; the lack of near-term easing prospects at the US Fed should support JGB yields and domestic bank valuations</li>
<li>We add smaller cap Juroku Financial to our buy list of Tokyo Kiraboshi Financial, Gunma Bank and higher risk option Suruga Bank</li>
</ul>


We update twelve Japanese regional banks, and add two new names, to target beneficiaries of the improving interest rate outlook; also banks with attractive credit quality, capital adequacy and valuations
We identify the value of equity holdings for disposal among these banks; the lack of near-term easing prospects at the US Fed should support JGB yields and domestic bank valuations
We add smaller cap Juroku Financial to our buy list of Tokyo Kiraboshi Financial, Gunma Bank and higher risk option Suruga Bank


Japanese Regional Banks – Adding a Smaller Cap to Our Key Positive Picks

Mizuho Financial Group / Equity Bottom-Up

<ul>
<li>The Financial System Report published on April 18th focuses on the key Japanese bank issues, including the prospect of domestic rate hikes</li>
<li>We focus primarily on the key take-aways from the BoJ report, in particular with relation to potential rate hikes; our key picks appear to be better geared than the average</li>
<li>We highlight Resona, Mizuho and Concordia in the bigger caps, with positive views on Suruga, Gunma and Tokyo Kiraboshi in the regional banks</li>
</ul>


The Financial System Report published on April 18th focuses on the key Japanese bank issues, including the prospect of domestic rate hikes
We focus primarily on the key take-aways from the BoJ report, in particular with relation to potential rate hikes; our key picks appear to be better geared than the average
We highlight Resona, Mizuho and Concordia in the bigger caps, with positive views on Suruga, Gunma and Tokyo Kiraboshi in the regional banks


Potential Domestic Rate Hike Impacts Highlighted in the BoJ’s Latest Financial System Report

<ul>
<li>The Japanese banks’ share prices have barely moved following the Bank of Japan’s exit from negative interest rates; is it largely discounted or does the continued accommodative stance instil caution? </li>
<li>Japanese banks will benefit from 100% of their deposits at the BoJ earning 0.1%, as opposed to 40% of bank deposits which was the case up to the 20th March</li>
<li>We believe our positive recommendations are all geared into higher domestic interest rates; we highlight Resona, Mizuho and Suruga in this report for their high cash and at bank balances</li>
</ul>


The Japanese banks’ share prices have barely moved following the Bank of Japan’s exit from negative interest rates; is it largely discounted or does the continued accommodative stance instil caution? 
Japanese banks will benefit from 100% of their deposits at the BoJ earning 0.1%, as opposed to 40% of bank deposits which was the case up to the 20th March
We believe our positive recommendations are all geared into higher domestic interest rates; we highlight Resona, Mizuho and Suruga in this report for their high cash and at bank balances


Japanese Banks – Cash Balances and the BoJ’s Negative Interest Rate Policy Exit

Tokyo Kiraboshi Financial Group / Equity Bottom-Up

<ul>
<li>We explore twelve Japanese regional banks to look for key beneficiaries of the improving interest rate outlook, along with valuations, credit quality and capital adequacy</li>
<li>The global interest rate outlook is in some flux, with the Fed’s and ECB’s prospects of near-term easing being tempered; this should support Japanese JGB yields and domestic bank valuations</li>
<li>We are positive on three banks that are big beneficiaries of rising domestic interest rates; top pick Tokyo Kiraboshi Financial, Gunma Bank and higher risk option Suruga Bank</li>
</ul>


We explore twelve Japanese regional banks to look for key beneficiaries of the improving interest rate outlook, along with valuations, credit quality and capital adequacy
The global interest rate outlook is in some flux, with the Fed’s and ECB’s prospects of near-term easing being tempered; this should support Japanese JGB yields and domestic bank valuations
We are positive on three banks that are big beneficiaries of rising domestic interest rates; top pick Tokyo Kiraboshi Financial, Gunma Bank and higher risk option Suruga Bank


Japanese Regional Banks – Three Key Positive Picks

Hokuhoku Financial Group / Equity Bottom-Up

<ul>
<li>We analyse ten Japanese midcap banks to target beneficiaries of the realization of strategic shareholdings, as well as beneficiaries of the improving interest rate outlook</li>
<li>We add Hachijuni Bank and Hokuhoku Financial to the buy list, based on the potential for realization of strategic holdings; these share-holdings are large relative to their respective market capitalizations</li>
<li>We maintain Gunma Bank on the buy list, primarily for its very strong gearing into the rising interest cycle and its attractive PE multiples</li>
</ul>


We analyse ten Japanese midcap banks to target beneficiaries of the realization of strategic shareholdings, as well as beneficiaries of the improving interest rate outlook
We add Hachijuni Bank and Hokuhoku Financial to the buy list, based on the potential for realization of strategic holdings; these share-holdings are large relative to their respective market capitalizations
We maintain Gunma Bank on the buy list, primarily for its very strong gearing into the rising interest cycle and its attractive PE multiples


Japanese Midcap Banks – Three Key Picks

Japan

The Gunma Bank, Ltd. is a regional bank based in Gunma Prefecture.  The Bank provides banking services such as deposits, loans, and foreign exchange transaction.  The Gunma Bank also provides financial services such as leasing, credit cards, letter of credit, and investment advisory, and develops information systems.

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Gunma Bank (8334 JP)

Japanese Regional Banks – Adding a Smaller Cap to Our Key Positive Picks

Aside from the usual metrics, we add regional banks' cross-shareholdings as a share of market cap; smaller cap Juroku Financial added to buy list...

Victor Galliano

Potential Domestic Rate Hike Impacts Highlighted in the BoJ’s Latest Financial System Report

The BoJ's FSR focuses on issues like potential domestic rate hikes. Key picks are Resona, Mizuho, and Concordia in big caps, the positive regional...

Victor Galliano

Japanese Banks – Cash Balances and the BoJ’s Negative Interest Rate Policy Exit

Japanese banks' share prices mark time post-BoJ's exit from negative interest rates, due to BoJ'S continued accommodative stance. We highlight...

Victor Galliano

Japanese Regional Banks – Three Key Positive Picks

The rising interest rate outlook in Japan benefits regional banks; our top picks, based on interest rate gearing and other key factors, are Tokyo...

Victor Galliano

Japanese Midcap Banks – Three Key Picks

We focus on Japanese midcap banks' key shareholder attributes; Hachijuni and Hokuhoku added to buys for their large strategic holdings, while Gunma...

Victor Galliano

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japanese Regional Banks – Adding a Smaller Cap to Our Key Positive Picks

​Aside from the usual metrics, we add regional banks' cross-shareholdings as a share of market cap; smaller cap Juroku Financial added to buy list...

Victor Galliano

Potential Domestic Rate Hike Impacts Highlighted in the BoJ’s Latest Financial System Report

​The BoJ's FSR focuses on issues like potential domestic rate hikes. Key picks are Resona, Mizuho, and Concordia in big caps, the positive regional...

Victor Galliano

Japanese Banks – Cash Balances and the BoJ’s Negative Interest Rate Policy Exit

​Japanese banks' share prices mark time post-BoJ's exit from negative interest rates, due to BoJ'S continued accommodative stance. We highlight...

Victor Galliano

Japanese Regional Banks – Three Key Positive Picks

The rising interest rate outlook in Japan benefits regional banks; our top picks, based on interest rate gearing and other key factors, are Tokyo...

Victor Galliano

Japanese Midcap Banks – Three Key Picks

We focus on Japanese midcap banks' key shareholder attributes; Hachijuni and Hokuhoku added to buys for their large strategic holdings, while Gunma...

Victor Galliano

Aside from the usual metrics, we add regional banks' cross-shareholdings as a share of market cap; smaller cap Juroku Financial added to buy list...

The BoJ's FSR focuses on issues like potential domestic rate hikes. Key picks are Resona, Mizuho, and Concordia in big caps, the positive regional...

Japanese banks' share prices mark time post-BoJ's exit from negative interest rates, due to BoJ'S continued accommodative stance. We highlight...