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

*Troubling Result: J.P. Morgan Chase &amp; Co (JPM.US) [JPM] reported 2Q21 bottom-line results of USD 11.9 bn, declining USD 2.4 bn (16.4%) linked quarter, as four out of five business units posted bottom-line declines pushing overall revenues lower USD 1.6 bn (5.0%). On a core operating basis, JPM’s results declined somewhat less – down USD 2.2 bn or 15.3% over the period. Results were weak almost across the board; and*Credit Quality Reversing Previous Gains: We calculate that net new NPLs linked quarter grew USD 4.9 bn bn or 177.3% on an annualized basis – a far cry from the 22.2% and 0.2% increase at 1Q21 and 4Q20, respectively. While JPM would appear on its face to be well-provided for, provision releases now appear to be coming to an end. If the current uptick in net new NPLs is here to stay, JPM would appear light on reserves in the neighborhood of USD 7.0 bn or 50% of quarterly PBT.

*Troubling Result: J.P. Morgan Chase &amp; Co (JPM.US) [JPM] reported 2Q21 bottom-line results of USD 11.9 bn, declining USD 2.4 bn (16.4%) linked quarter, as four out of five business units posted bottom-line declines pushing overall revenues lower USD 1.6 bn (5.0%). On a core operating basis, JPM’s results declined somewhat less – down USD 2.2 bn or 15.3% over the period. Results were weak almost across the board; and*Credit Quality Reversing Previous Gains: We calculate that net new NPLs linked quarter grew USD 4.9 bn bn or 177.3% on an annualized basis – a far cry from the 22.2% and 0.2% increase at 1Q21 and 4Q20, respectively. While JPM would appear on its face to be well-provided for, provision releases now appear to be coming to an end. If the current uptick in net new NPLs is here to stay, JPM would appear light on reserves in the neighborhood of USD 7.0 bn or 50% of quarterly PBT. 

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.

Thematic (Sector/Industry)

The story for banks now is about credit cost reversals, reinstatement of dividends, and lastly resumption of loan growth. Data from some US banks may have incredibly positive read through for DBS, others.

The story for banks now is about credit cost reversals, reinstatement of dividends, and lastly resumption of loan growth. Data from some US banks may have incredibly positive read through for DBS, others.

Bond market data and technology, BondEvalue

BondEvalue

Bond market data and technology

BondEvalue is a Singapore-based Fintech that specializes in bond market data and technology. The company's information services business offers bond market data on hard-currency corporate & sovereign bonds across Asia, Middle East, Europe and the Americas. The data, which includes bond prices, yields, news and analytics, is offered to end investors via interactive Mobile and Web Apps. Investors can sign up for a free trial of the service either via the company's website (https://bondevalue.com) or by downloading the BondEvalue Mobile App (http://onelink.to/wej7jq). BondEvalue is also developing an electronic bond exchange, BondbloX in Singapore that allows investors to trade bonds electronically in smaller sizes (US$1,000 or equivalent). For more information, visit https://www.bondblox.com/

Bond Market Data and Technology

Credit

US Markets retreated from their early gains even after strong Q2 earnings from banking majors JPMorgan and Goldman Sachs (details below). S&amp;P and Nasdaq were down ~0.4% with the fall spearheaded by Boeing’s 4.2% drop after the FAA reported a manufacturing quality issue on its 787 fleet (details below). Real Estate, down 1.3% and Consumer Discretionary down 1.2% led the drop while IT up 0.4% provided some support. Financials, Industrials and Energy were also down ~1%. US CPI  rose to 0.9% MoM in June against a forecast of 0.5% – the largest one month change since June 2008. The inflation reading YoY came in at 5.4%, the highest in 13 years, vs. an estimate of 5.0%. The Core CPI, the index for all items less food and energy, rose 4.5% over the last year, the highest since 1991. US 10Y Treasury yields ended 3bp higher to 1.4% after the CPI release and a weak 30Y bond auction. European indices were broadly flat – DAX, CAC and FTSE down 0.01%. US IG and HY CDS spreads widened 0.7bp and 3.8bp respectively. EU main CDS spreads were flat while crossover spreads tightened 0.5bp. Brazil’s Bovespa was up 0.5%. Saudi TASI and Abu Dhabi’s ADX were up 0.4% and 0.3% respectively. Asian markets opened in the red – HSI and Shanghai were down 0.4%, Nikkei was down 0.2% and Singapore’s STI was down 0.1%. Asia ex-Japan CDS spreads were 0.1bp tighter.

KT Corp Launches $ Bond; Macro; Rating Changes; New Issues; Talking Heads; Top Gainers & Losers

Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

For our next Smartkarma Webinar, we are thrilled to welcome back Insight Provider <a href="https://www.smartkarma.com/profiles/kyle-rudden" target="_blank" data-smartkarma-citation="accounts:4495" rel="noopener">Kyle Rudden</a> , who will be sharing insights on the trending issue of Environmental, Social, and Governance Investing. ESG investing is widely seen as a way of investing “sustainably” where investments are made with consideration of the environment and human well-being, as well as the economy. Kyle believes global sustainability is imperative and views private-sector capital as its cornerstone. As such, he supports the various impact-oriented strategies typically associated with ESG investing. However, his views on ESG and investing lean more pragmatic than idealistic, and his research focuses on applying ESG analysis to general investing rather than to "ESG investing" per se. Kyle subscribes to the Triple Bottom Line view of sustainability, where economic and financial metrics are deemed as important as ESG factors.This webinar is organised jointly by Smartkarma and SGX.<h3>The webinar will be hosted on Wednesday, 14 July 2021, 17:00 SGT/HKT.</h3><div class="content-highlight"><h2><a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=86937019742" target="_blank" rel="noopener">Register for the Webinar here</a></h2></div>Kyle Rudden is an ESG (Environmental, Social, Governance) analyst with an alpha-centric approach to ESG research. After all, ESG investing is, first and foremost, investing. "Alpha-centric" does not mean apathetic, however. Quite the contrary. Kyle believes global sustainability – i.e., environmental stewardship, social equality, and economic prosperity – is imperative, and private-sector capital is its cornerstone. Private-sector capital still has fiduciary responsibilities. Profitability is necessary for sustained impact. The Triple Bottom Line. People, Planet, AND Profit.

For our next Smartkarma Webinar, we are thrilled to welcome back Insight Provider Kyle Rudden , who will be sharing insights on the trending issue of Environmental, Social, and Governance Investing. ESG investing is widely seen as a way of investing “sustainably” where investments are made with consideration of the environment and human well-being, as well as the economy. Kyle believes global sustainability is imperative and views private-sector capital as its cornerstone. As such, he supports the various impact-oriented strategies typically associated with ESG investing. However, his views on ESG and investing lean more pragmatic than idealistic, and his research focuses on applying ESG analysis to general investing rather than to "ESG investing" per se. Kyle subscribes to the Triple Bottom Line view of sustainability, where economic and financial metrics are deemed as important as ESG factors.This webinar is organised jointly by Smartkarma and SGX.The webinar will be hosted on Wednesday, 14 July 2021, 17:00 SGT/HKT.Register for the Webinar hereKyle Rudden is an ESG (Environmental, Social, Governance) analyst with an alpha-centric approach to ESG research. After all, ESG investing is, first and foremost, investing. "Alpha-centric" does not mean apathetic, however. Quite the contrary. Kyle believes global sustainability – i.e., environmental stewardship, social equality, and economic prosperity – is imperative, and private-sector capital is its cornerstone. Private-sector capital still has fiduciary responsibilities. Profitability is necessary for sustained impact. The Triple Bottom Line. People, Planet, AND Profit.

Smartkarma Webinar | Foundations of Sustainable/ESG Investing and Finance

*Competitor Call Confirms Business Is Dead: A competitor hosted a conference call with the management of HSBC Holdings plc (5.HK/HSBA.LN) [HSBC]. Much of the discussion centered on Hong Kong/Asia, where net interest income remains under pressure due to low spreads, credit remains benign, and now Wealth Management is again in focus; and    *Elephant In Room Not Discussed: CET 1 was 15.9% at 1Q21, and the Group continues to aim for between 14.0% -14.5%. Unfortunately there was no mention nor even a question on its US franchise, HSBC North America (HSBCNA), which if sold or even managed properly could would easily allow HSBC to realize its CET1 goal  - given the losses management still needs to take on that mess.

*Competitor Call Confirms Business Is Dead: A competitor hosted a conference call with the management of HSBC Holdings plc (5.HK/HSBA.LN) [HSBC]. Much of the discussion centered on Hong Kong/Asia, where net interest income remains under pressure due to low spreads, credit remains benign, and now Wealth Management is again in focus; and    *Elephant In Room Not Discussed: CET 1 was 15.9% at 1Q21, and the Group continues to aim for between 14.0% -14.5%. Unfortunately there was no mention nor even a question on its US franchise, HSBC North America (HSBCNA), which if sold or even managed properly could would easily allow HSBC to realize its CET1 goal  - given the losses management still needs to take on that mess.

HSBC Holdings Plc – Head Still Buried In The Sand

United States

JPMorgan Chase & Co. provides global financial services and retail banking. The Company provides services such as investment banking, treasury and securities services, asset management, private banking, card member services, commercial banking, and home finance. JP Morgan Chase serves business enterprises, institutions, and individuals.

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JPMorgan Chase & Co (JPM US)

J.P. Morgan & Co. – Not Good Jamie

J.P. Morgan: JPM reported a QOQ decline in 2Q21 in bottom-line of 16.4%. Previous credit quality gains have reversed, leading us to question...

Thomas J. Monaco

JPM, WFC, DBS – Credit Costs

The story for banks now is credit cost reversals, reinstatement of dividends, and lastly resumption of loan growth. Data from some US banks may...

Daniel Tabbush

KT Corp Launches $ Bond; Macro; Rating Changes; New Issues; Talking Heads; Top Gainers & Losers

US Markets retreated from their early gains even after strong Q2 earnings from banking majors JPMorgan and Goldman Sachs (details below). S&P...

BondEvalue

Smartkarma Webinar | Foundations of Sustainable/ESG Investing and Finance

On 14 July, 5pm SGT, join our webinar with Kyle Rudden, who will be sharing his insights on the trending issue of ESG Investing and the Triple...

Smartkarma Research

HSBC Holdings Plc – Head Still Buried In The Sand

HSBC HOLDINGS: A competitor call with management centered on benign Hong Kong/Asia. The Group aim is a CET1 of 14-14.5%. No mention HSBC North...

Thomas J. Monaco

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