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

Equity Bottom-Up

<ul>
<li>Mainland Chinese municipalities and authorities continue to find numerous ways to bone pick the Evergrande carcass without compensation; </li>
<li>Evergrande’s offshore bondholders are now threatening legal enforcement of collateral over the company’s “opaque” debt restructuring process; and </li>
<li>Guangdong province is seeking to segregate Evergrande’s offshore assets in a fire sale to cover what they can of the company’s offshore debt. </li>
</ul>


Mainland Chinese municipalities and authorities continue to find numerous ways to bone pick the Evergrande carcass without compensation; 
Evergrande’s offshore bondholders are now threatening legal enforcement of collateral over the company’s “opaque” debt restructuring process; and 
Guangdong province is seeking to segregate Evergrande’s offshore assets in a fire sale to cover what they can of the company’s offshore debt. 


China Evergrande Group – Vultures Circling

<ul>
<li>Another Troubled Bank Deal In Asia Adds Another Managerial Distraction;   </li>
<li>DBS Agreed to Acquire Citigroup’s Taiwan Consumer Franchise for SGD 2.9 bn After Three Taiwan Banks Couldn’t Make This Deal Work; and </li>
<li>In Addition, DBS’ Fundamentals Continue to Weaken, With Lower Fees, Compressed Margins, and Modestly Weaker Credit. </li>
</ul>


Another Troubled Bank Deal In Asia Adds Another Managerial Distraction;   
DBS Agreed to Acquire Citigroup’s Taiwan Consumer Franchise for SGD 2.9 bn After Three Taiwan Banks Couldn’t Make This Deal Work; and 
In Addition, DBS’ Fundamentals Continue to Weaken, With Lower Fees, Compressed Margins, and Modestly Weaker Credit. 


DBS Group Holdings – And Baby Makes Three

China Merchants Bank H / Equity Bottom-Up

<ul>
<li>
Competitor Call Reveals Numerous Additional Risks Which Will Weigh On Results. </li>
<li>No Clarity On Go Forward Core Bottom-Line, Especially Gains and Loss Provisions. </li>
<li>Reserve to NPLs Looks Overstated, as WMP and Securities Are Included In Loan Reserves. </li>
</ul>



Competitor Call Reveals Numerous Additional Risks Which Will Weigh On Results. 
No Clarity On Go Forward Core Bottom-Line, Especially Gains and Loss Provisions. 
Reserve to NPLs Looks Overstated, as WMP and Securities Are Included In Loan Reserves. 


China Merchants Bank – Accelerating Risk

<ul>
<li>
Bad To Worse:Under mainland China’s real estate development law, the government has the right to repossess idle land sold to any developer without compensation;</li>
<li>
Demolition Man: Danzhou City is now in on the act, forcing China Evergrande Group (3333.HK) [Evergrande] to demolish 39 buildings for various violations; and</li>
<li>
Banks To Eat This As Well: Without any compensation to Evergrande, mainland Chinese banks no doubt will finally be writing down their exposure on Evergrande's now non-existent buildings.</li>
</ul>



Bad To Worse:Under mainland China’s real estate development law, the government has the right to repossess idle land sold to any developer without compensation;

Demolition Man: Danzhou City is now in on the act, forcing China Evergrande Group (3333.HK) [Evergrande] to demolish 39 buildings for various violations; and

Banks To Eat This As Well: Without any compensation to Evergrande, mainland Chinese banks no doubt will finally be writing down their exposure on Evergrande's now non-existent buildings.


<ul>
<li>
 Sea Sale: Tencent sold 14.5 mn shares in Sea, raising approximately USD 3 bn in cash – reducing Tencent’s position in Sea from 21.3% to 18.7%;   </li>
<li>
 Not A Surprise: Given mainland China’s crackdown on the country’s largest internet companies, Tencent’s disposal of Sea shares is not a surprise; and  </li>
<li>
 Other Stake Sales To Follow: Further divestitures of major stakes are likely if Tencent wishes to remain on the right side of mainland China’s Communist Party.    </li>
</ul>



 Sea Sale: Tencent sold 14.5 mn shares in Sea, raising approximately USD 3 bn in cash – reducing Tencent’s position in Sea from 21.3% to 18.7%;   

 Not A Surprise: Given mainland China’s crackdown on the country’s largest internet companies, Tencent’s disposal of Sea shares is not a surprise; and  

 Other Stake Sales To Follow: Further divestitures of major stakes are likely if Tencent wishes to remain on the right side of mainland China’s Communist Party.    


Tencent Holdings – From Sea To Shining Sea

Hong Kong

iShares MSCI Hong Kong ETF is an exchange-traded fund incorporated in the USA. The ETF's objective seeks to provide investment results that correspond to the performance of publicly traded securities in the Hong Kong market, as measured by the MSCI Hong Kong Index. The ETF invests in a representative sample of index stocks using a "portfolio sampling" technique.

iShares MSCI Hong Kong ETF (EWH US)

China Evergrande Group – Vultures Circling

EVERGRANDE: Offshore bondholders are now threatening legal enforcement of collateral over the company’s “opaque” debt restructuring process, with...

Thomas J. Monaco

DBS Group Holdings – And Baby Makes Three

DBS: Another troubled bank deal adds another managerial distraction, as DBS has agreed to acquire Citigroup’s Taiwan consumer franchise. Further,...

Thomas J. Monaco

China Merchants Bank – Accelerating Risk

CHINA MERCHANTS BANK: A discussion over the use of gains and a drop in loss provisions during 3Q21 would have been a better use of time. CMB’s core...

Thomas J. Monaco

China Evergrande Group – Razing Cain

EVERGRANDE: Danzhou City is forcing Evergrande to demolish 39 buildings for various violations. Mainland Chinese banks no doubt will write down...

Thomas J. Monaco

Tencent Holdings – From Sea To Shining Sea

TENCENT: Tencent sold 14.5 mn shares in Sea, raising USD 3 bn and reducing its position from 21.3% to 18.7%, Other stake sales will follow.

Thomas J. Monaco