Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Equity Bottom-Up

United Microelectron Sp Adr / Equity Bottom-Up

<ul>
<li>The divergence between the Philly Semiconductor Index and the Taiwan Market has continued despite both falling moderately.</li>
<li>Latest short interest data to note -- Faraday Technology experienced a surge in short interest ahead of its earnings this week. UMC has high short interest and results this week.</li>
<li>Institutionally underheld stock Transcend Media has experienced rising institutional ownership recently and has a very high short ratio.</li>
</ul>


The divergence between the Philly Semiconductor Index and the Taiwan Market has continued despite both falling moderately.
Latest short interest data to note -- Faraday Technology experienced a surge in short interest ahead of its earnings this week. UMC has high short interest and results this week.
Institutionally underheld stock Transcend Media has experienced rising institutional ownership recently and has a very high short ratio.


Taiwan Short Squeeze Potential: Faraday, UMC, Transcend Media Latest Stocks to Watch

Cross-Asset Strategist & Quantitative Analyst, Pennock Idea Hub

Cam Hui

Cross-Asset Strategist & Quantitative Analyst

Pennock Idea Hub

We are creators of independent equity research. The Pennock Idea Hub team are veterans of the investment industry. Much of our team has spent their careers at Merrill Lynch, Deutsche Bank, RBC Capital Markets and Wood Gundy. We have taken every aspect of research back to the studs and returned to first principles. The Pennock Idea Hub marries the interests of the sell and buy side. 

We offer the best research for institutional investors by:

-Only publishing research from veteran analysts
-Eliminate the inherent conflicts of the traditional sell and buy side relationship
-Ensure our team is always accessible; collaboration with clients nurtures our collective success

Cross-Asset & Quantitative Research

Cross Asset Strategy

<ul>
<li>The long-term structure of global markets is seeing a loss of leadership by U.S. equities and emerging new leadership in Europe.</li>
<li>The short-run outlook will depend on the results of earnings season.</li>
<li>Our base case calls for a choppy and range-bound market.Wait for the breakout, or breakdown.</li>
</ul>


The long-term structure of global markets is seeing a loss of leadership by U.S. equities and emerging new leadership in Europe.
The short-run outlook will depend on the results of earnings season.
Our base case calls for a choppy and range-bound market.Wait for the breakout, or breakdown.


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

<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

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

Managing Director

Elan Gore

TMI Data Science

TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade & traditional media.  Our proprietary software, TMI Machine, is a text-mining platform designed with the buy-side & capital markets professional in mind, text-mining the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income & individual equities.  TMI provides custom leading indicators and systematic trading strategies, operating at the nexus of linguistics & statistics drawing on vast experience in investment banking and hedge fund settings in senior quantitative and fundamental roles.  

TMI Data Science was founded by Elan Gore, an award-winning Senior Global Basic Materials Equity Analyst & China Economist with 15 years of experience in North American hedge funds & institutional managers; and Alessandro Porrino, Ph.D., an Algorithmic Trading Analyst and Programmer with 10 years of front-office experience ranging from complex FX option pricing to auto-hedging strategies at Bank of America Merrill Lynch and Standard Chartered.  Mr. Gore holds an MBA in Finance from New York University Stern School of Business, and Mr. Porrino holds a Ph.D. in Systems Engineering from Brunel University London.

<ul>
<li>After a short period of optimism following the US elections, China-Taiwan tensions are escalating sharply again; we disaggregate the theme into multiple sub-components and geographic sources to find a spike in US coverage of Taiwan tensions at +2x STDEVs, a level last seen over a year ago</li>
<li>The spike in Taiwan coverage has been driven by multiple breaches of Taiwan's Air Defense Identification Zone by Chinese warplanes; a recent warning by US Asia Pacific Commander Philip Davidson that China could invade Taiwan "in the next 6 years"; recent developments in the Quadrilateral Security Dialogue; elevated US-Japan cooperation on "Taiwan emergency"; and a barrage of high-profile op-eds in recent weeks highlighting tensions over Taiwan</li>
<li>While 2020 did not see geopolitical risks factor into the performance of MSCI Taiwan or USD/TWD, the China-Taiwan tensions theme was strongly correlated with performance in 2018-2019</li>
</ul>


After a short period of optimism following the US elections, China-Taiwan tensions are escalating sharply again; we disaggregate the theme into multiple sub-components and geographic sources to find a spike in US coverage of Taiwan tensions at +2x STDEVs, a level last seen over a year ago
The spike in Taiwan coverage has been driven by multiple breaches of Taiwan's Air Defense Identification Zone by Chinese warplanes; a recent warning by US Asia Pacific Commander Philip Davidson that China could invade Taiwan "in the next 6 years"; recent developments in the Quadrilateral Security Dialogue; elevated US-Japan cooperation on "Taiwan emergency"; and a barrage of high-profile op-eds in recent weeks highlighting tensions over Taiwan
While 2020 did not see geopolitical risks factor into the performance of MSCI Taiwan or USD/TWD, the China-Taiwan tensions theme was strongly correlated with performance in 2018-2019


TMI Snapshots:  Taiwan Tensions Rising, Will Geopolitics Return to the Forefront in 2021?

United States

iShares MSCI Taiwan 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 the Taiwanese market, as measured by the MSCI Taiwan 25/50 Index.

iShares MSCI Taiwan ETF (EWT US)

Taiwan Short Squeeze Potential: Faraday, UMC, Transcend Media Latest Stocks to Watch

Latest short interest data to note -- Faraday Technology experienced a surge in short interest ahead of its earnings this week. UMC has high short...

Vincent Fernando, CFA

The Market Leaders Hiding in Plain Sight

The long-term structure of global markets is seeing a loss of leadership by U.S. equities and emerging new leadership in Europe.

Cam Hui

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

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

TMI Snapshots: Taiwan Tensions Rising, Will Geopolitics Return to the Forefront in 2021?

Quantifying the magnitude of news flow on China-Taiwan tensions, we see a +2x STDEV spike in coverage of the topic. Markets may reassess risks as...

Elan Gore