Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Macroeconomics

<ul>
<li>Commercial Real Estate issues, the dog that didn't bark in 2023, is back.</li>
<li>Unlike March 2023, this cannot be fixed by liquidity injections alone.</li>
<li>US employment data surprises on the upside. Further Government manipulation?</li>
</ul>


Commercial Real Estate issues, the dog that didn't bark in 2023, is back.
Unlike March 2023, this cannot be fixed by liquidity injections alone.
US employment data surprises on the upside. Further Government manipulation?


Further Cracks Appearing in the US Economy

Energy Transition | AI | Shifting World Order, Mint Finance

Suhas Reddy

Energy Transition | AI | Shifting World Order

Deep Fundamental Analysis

Mint Finance

Mint Finance's investment research blends deep fundamental analysis with technical & quant insights. Investment strategies straddle across multiple asset classes with risk management embedded into every trade to deliver an outsized reward-to-risk ratio.

Mint Finance's research is centered around three key themes. First, energy transition and climate change. Second, artificial intelligence. Third, shifting world order with its impact across politics and monetary economics.

Thematic (Sector/Industry)

<ul>
<li>Regional and small US banks face a greater risk to rising delinquencies on CRE loans given their higher exposure to CRE debt.</li>
<li>CRE loan delinquency rates and net charge-offs have accelerated since Q32022, mostly driven by the office space portfolio.</li>
<li>Within the CRE industry, property types such as hotels, offices and retail assets have the highest average rate caps, respectively.</li>
</ul>


Regional and small US banks face a greater risk to rising delinquencies on CRE loans given their higher exposure to CRE debt.
CRE loan delinquency rates and net charge-offs have accelerated since Q32022, mostly driven by the office space portfolio.
Within the CRE industry, property types such as hotels, offices and retail assets have the highest average rate caps, respectively.


Crisis in US CRE to Disproportionately Impact Regional Banks

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>A bottom-up driven scan of stock charts shows over 29 stocks with bullish technical patterns consisting of uptrends or breakouts from multi-month bases with strong potential upsides.</li>
<li>Bullish patterns are broadly based, primarily concentrated in technology and cyclicals, which argue for a continuation of the AI-related bull and an economic rebound.</li>
<li>This bottom-up analysis also pointed to bullish macro conclusions about the economy.</li>
</ul>


A bottom-up driven scan of stock charts shows over 29 stocks with bullish technical patterns consisting of uptrends or breakouts from multi-month bases with strong potential upsides.
Bullish patterns are broadly based, primarily concentrated in technology and cyclicals, which argue for a continuation of the AI-related bull and an economic rebound.
This bottom-up analysis also pointed to bullish macro conclusions about the economy.


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.

<ul>
<li>US banks show flat lining loan growth, and continued very high growth in Jumbo time deposits, borrowings. Total deposits though, remain in contraction. </li>
<li>With the liability shift away from checking accounts, loan growth at near zero YoY will not help net interest income growth. Most recent two weeks' data, loans declined USD58bn.</li>
<li>Our sample of 36 US banks shows net interest income has just turned negative in 4Q23, and its pace of decline should worsen considerably, in coming quarters. </li>
</ul>


US banks show flat lining loan growth, and continued very high growth in Jumbo time deposits, borrowings. Total deposits though, remain in contraction. 
With the liability shift away from checking accounts, loan growth at near zero YoY will not help net interest income growth. Most recent two weeks' data, loans declined USD58bn.
Our sample of 36 US banks shows net interest income has just turned negative in 4Q23, and its pace of decline should worsen considerably, in coming quarters. 


US Banks - Flat Line Loans, High Growth Higher Cost Funding, Net Interest Income Growth Is Negative

Equity Bottom-Up

<ul>
<li>Total impairment costs are soaring now at Citigroup up to USD3.5bn in 4Q23 compared with an average charge of USD1.8-1.9bn in the recent preceding quarters. </li>
<li>Net interest income appears to be topping out now, as there is generally a lagged impact on funding in a rising rate environment. </li>
<li>The implications of the Citi results, steeped in geopolitical risk, are not positive for large global banks, major US banks in particular and <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC Holdings (5 HK)</a> specifically. </li>
</ul>


Total impairment costs are soaring now at Citigroup up to USD3.5bn in 4Q23 compared with an average charge of USD1.8-1.9bn in the recent preceding quarters. 
Net interest income appears to be topping out now, as there is generally a lagged impact on funding in a rising rate environment. 
The implications of the Citi results, steeped in geopolitical risk, are not positive for large global banks, major US banks in particular and HSBC Holdings (5 HK) specifically. 


Citigroup - Impairment Costs Far Higher than Any Recent Quarter & Net Interest Income near Halting

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)

Further Cracks Appearing in the US Economy

Commercial real estate issues resurface in 2024, posing a challenge that cannot be resolved solely through liquidity injections. US employment...

Rikki Malik

Crisis in US CRE to Disproportionately Impact Regional Banks

Regional banks' asset quality is under greater threat given their high exposure to CRE loans. Hotels, offices, and retail assets have the highest...

Mint Finance

29 Reasons to Be Bullish

A bottom-up scan of stock charts shows over 29 stocks with bullish technical patterns consisting of uptrends or breakouts from multi-month bases...

Cam Hui

US Banks - Flat Line Loans, High Growth Higher Cost Funding, Net Interest Income Growth Is Negative

Weekly balance sheet data for large US banks shows liabilities shift toward higher cost funding continues, with loan growth remaining week, losing...

Daniel Tabbush

Citigroup - Impairment Costs Far Higher than Any Recent Quarter & Net Interest Income near Halting

Citigroup is now seeing its impairment costs far higher than any recent quarter, and much of this is from unfunded commitments. Its net interest...

Daniel Tabbush

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Further Cracks Appearing in the US Economy

​Commercial real estate issues resurface in 2024, posing a challenge that cannot be resolved solely through liquidity injections. US employment...

Rikki Malik

Crisis in US CRE to Disproportionately Impact Regional Banks

Regional banks' asset quality is under greater threat given their high exposure to CRE loans. Hotels, offices, and retail assets have the highest...

Mint Finance

29 Reasons to Be Bullish

A bottom-up scan of stock charts shows over 29 stocks with bullish technical patterns consisting of uptrends or breakouts from multi-month bases...

Cam Hui

US Banks - Flat Line Loans, High Growth Higher Cost Funding, Net Interest Income Growth Is Negative

Weekly balance sheet data for large US banks shows liabilities shift toward higher cost funding continues, with loan growth remaining week, losing...

Daniel Tabbush

Citigroup - Impairment Costs Far Higher than Any Recent Quarter & Net Interest Income near Halting

Citigroup is now seeing its impairment costs far higher than any recent quarter, and much of this is from unfunded commitments. Its net interest...

Daniel Tabbush

Commercial real estate issues resurface in 2024, posing a challenge that cannot be resolved solely through liquidity injections. US employment...