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.

Equity Bottom-Up

There are plenty of risks for Singapore’s banks as the US-China trade war starts during 2Q19. We have not seen the financial impact yet, but as we near the quarter end, banks will have to take this into consideration. Even without immediate changes to defaults, forward looking loss given default (LGD) or probability of default (PD) will surely feature.  The income impact from less trade related income will likely start in 2Q19. Of course, we should not forget about oil and gas services related exposures, where oil prices are nearly in free fall and where bad loans in this segment never declined.

There are plenty of risks for Singapore’s banks as the US-China trade war starts during 2Q19. We have not seen the financial impact yet, but as we near the quarter end, banks will have to take this into consideration. Even without immediate changes to defaults, forward looking loss given default (LGD) or probability of default (PD) will surely feature.  The income impact from less trade related income will likely start in 2Q19. Of course, we should not forget about oil and gas services related exposures, where oil prices are nearly in free fall and where bad loans in this segment never declined.

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

* Well Written Plan, Does Not Suggest Its Viable:  Strategic priorities are similar to those of the previous 3 year Strategic Plan: a) continue the pivot toward Asia; b) focus on the international network; c) turn around the US business; and d) invest for future growth.* New Plan Does Not Add Up: That said, the updated strategic plan is confusing and very simply does not add up – especially considering that HSBC will be limiting loan growth to 1-2% per annum. The greater than 6% RoTE target for…

* Well Written Plan, Does Not Suggest Its Viable:  Strategic priorities are similar to those of the previous 3 year Strategic Plan: a) continue the pivot toward Asia; b) focus on the international network; c) turn around the US business; and d) invest for future growth.* New Plan Does Not Add Up: That said, the updated strategic plan is confusing and very simply does not add up – especially considering that HSBC will be limiting loan growth to 1-2% per annum. The greater than 6% RoTE target for…

HSBC Holdings Plc– New Strategic Plan Is Complete Nonsense

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

Over the past several weeks we have outlined the case for our increasingly bullish outlook, noting that market internals remain favorable and S&amp;P 500 and MSCI ACWI price trends are showing evidence of early-stage uptrend formations. In today’s report we provide an overview of international markets and highlight our top recommendations.

Over the past several weeks we have outlined the case for our increasingly bullish outlook, noting that market internals remain favorable and S&amp;P 500 and MSCI ACWI price trends are showing evidence of early-stage uptrend formations. In today’s report we provide an overview of international markets and highlight our top recommendations.

Thematic (Sector/Industry)

Banks in Hong Kong have some of the lowest levels of loan loss reserves (LLR) compared with loans and also their loan loss provision (LLP) expenses are paltry. The sharp rise of interest rates during late this year will see a marked increase in interest payments. This is due to the magnitude of the rate change, which is over 60% higher. It is fairly simple to service loans at near zero interest rates, but the propensity for defaults is suddenly much higher as rates climb to 1.25%.  Hong Kong – 3…

Banks in Hong Kong have some of the lowest levels of loan loss reserves (LLR) compared with loans and also their loan loss provision (LLP) expenses are paltry. The sharp rise of interest rates during late this year will see a marked increase in interest payments. This is due to the magnitude of the rate change, which is over 60% higher. It is fairly simple to service loans at near zero interest rates, but the propensity for defaults is suddenly much higher as rates climb to 1.25%.  Hong Kong – 3…

It is difficult to be anything but concerned with <a href="https://www.smartkarma.com/entities/516" target="_blank" data-smartkarma-citation="entities:516:1">HSBC Holdings Plc (5 HK)</a> [<a href="https://www.smartkarma.com/entities/21976" target="_blank" data-smartkarma-citation="entities:21976:1">HSBC Holdings Plc (HSBA LN)</a>].  Four fines or settlements come to mind over the past several weeks. One is for HK$400 million for the Hong Kong branch of its Swiss private-banking subsidiary, over the sale of Lehman-linked products. Together with this fine, HSBC Private Bank (Suisse) will have its license to give advice on securities suspended and its license partially suspended to deal in securities. Another fine is for…

It is difficult to be anything but concerned with HSBC Holdings Plc (5 HK) [HSBC Holdings Plc (HSBA LN)].  Four fines or settlements come to mind over the past several weeks. One is for HK$400 million for the Hong Kong branch of its Swiss private-banking subsidiary, over the sale of Lehman-linked products. Together with this fine, HSBC Private Bank (Suisse) will have its license to give advice on securities suspended and its license partially suspended to deal in securities. Another fine is for…

Hong Kong

Hang Seng Bank Limited and its subsidiaries provide banking and related financial services.

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Hang Seng Bank (11 HK)

DBS – Three Things To Remember

There are plenty of risks for Singapore’s banks as the US-China trade war starts during 2Q19. We have not seen the financial impact yet, but as we...

Daniel Tabbush

HSBC Holdings Plc– New Strategic Plan Is Complete Nonsense

* Well Written Plan, Does Not Suggest Its Viable: Strategic priorities are similar to those of the previous 3 year Strategic Plan: a) continue the...

Thomas J. Monaco

Global Equity Markets Overview

Over the past several weeks we have outlined the case for our increasingly bullish outlook, noting that market internals remain favorable and...

Vermilion Research

Hong Kong Banks – Interest Rate Shock

Banks in Hong Kong have some of the lowest levels of loan loss reserves (LLR) compared with loans and also their loan loss provision (LLP) expenses...

Daniel Tabbush

HSBC Does Not Impress

It is difficult to be anything but concerned with HSBC Holdings Plc (5 HK) [HSBC Holdings Plc (HSBA LN)]. Four fines or settlements come to mind...

Daniel Tabbush

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