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)

<p>With full data out from Singapore’s banks, it is becoming even clearer, how loan mix can impact net interest income, and margins. It is also a stark reminder of the inherent relative weakness at HSBC.</p>

With full data out from Singapore’s banks, it is becoming even clearer, how loan mix can impact net interest income, and margins. It is also a stark reminder of the inherent relative weakness at HSBC.

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

<p><strong><em>*Challenging Result:</em></strong> Oversea Chinese Banking Corp. (OCBC.SP) [OCBC] reported 2Q21 net profit of SGD 1.2 bn, a SGD 341 mn (22.7%) decrease on a linked quarter basis. OCBC’s bottom-line weakness was primarily attributable to two factors: 1) SGD 71 mn (44.1%) increase in the loss provision, which is well justified given the re-acceleration in net new NPL growth; and 2) SGD 362 mn (24.6%) decrease in overall fee revenues, driven primarily by weaker attributable Great Eastern (GE.SP) earnings which likely will be here to stay; and  </p><p><em><strong>*Credit </strong></em><em><strong>Breaking Down After Reprieve</strong></em><em><strong>: </strong></em> By our calculation, we find that net new NPL growth has re-acclerated to SGD 771 mn or 78.3% on an annualized basis versus a negative SGD 78 mn or 8.0% for 1Q21. Given the increase in net new NPLs, reserve would appear to now be wanting by SGD 3.1 bn or just under three quarters of bottom-line results.</p>

*Challenging Result: Oversea Chinese Banking Corp. (OCBC.SP) [OCBC] reported 2Q21 net profit of SGD 1.2 bn, a SGD 341 mn (22.7%) decrease on a linked quarter basis. OCBC’s bottom-line weakness was primarily attributable to two factors: 1) SGD 71 mn (44.1%) increase in the loss provision, which is well justified given the re-acceleration in net new NPL growth; and 2) SGD 362 mn (24.6%) decrease in overall fee revenues, driven primarily by weaker attributable Great Eastern (GE.SP) earnings which likely will be here to stay; and  *Credit Breaking Down After Reprieve:  By our calculation, we find that net new NPL growth has re-acclerated to SGD 771 mn or 78.3% on an annualized basis versus a negative SGD 78 mn or 8.0% for 1Q21. Given the increase in net new NPLs, reserve would appear to now be wanting by SGD 3.1 bn or just under three quarters of bottom-line results.

Oversea Chinese Banking Corp. – Re-Accelerating Credit Risk

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Yoma Strategic Holdings / Equity Bottom-Up

Key Singapore Market Moves and Flows in July

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<div>
<p>On the 18 May, Yue Xiu (the investment arm of the Guangzhou municipal government) <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0519/2021051900117.pdf" target="_blank" rel="noopener">made an Offer</a>, by way of a Scheme, for <a href="https://www.smartkarma.com/entities/chong-hing-bank-ltd" target="_blank" data-smartkarma-citation="entities:344:1" rel="noopener">Chong Hing Bank (1111 HK)</a> shares not owned, at HK$20.80/share, a 51.2% premium to last close, and a 97% premium to the day preceding the last trading day. The Cancellation Price, which was a 10.1% discount to the NAV, would NOT be increased.</p>
</div>
<div>
<p>Standard Scheme conditions apply. Chong Hing is Hong Kong incorporated, therefore there is no headcount test.</p>
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<div>
<p>The Scheme Document is now <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0730/2021073000133.pdf" target="_blank" rel="noopener">out</a>.  The Scheme Meeting will be held on the 30 August with expected payment (assuming the Scheme resolutions are approved by independent shareholders) on the 7 October.</p>
<p>The IFA considers the Offer to be fair and reasonable, although that report covered the bare minimum. </p>
</div>
<div>
<p>More below the fold.</p>
</div>


On the 18 May, Yue Xiu (the investment arm of the Guangzhou municipal government) made an Offer, by way of a Scheme, for Chong Hing Bank (1111 HK) shares not owned, at HK$20.80/share, a 51.2% premium to last close, and a 97% premium to the day preceding the last trading day. The Cancellation Price, which was a 10.1% discount to the NAV, would NOT be increased.


Standard Scheme conditions apply. Chong Hing is Hong Kong incorporated, therefore there is no headcount test.


The Scheme Document is now out.  The Scheme Meeting will be held on the 30 August with expected payment (assuming the Scheme resolutions are approved by independent shareholders) on the 7 October.
The IFA considers the Offer to be fair and reasonable, although that report covered the bare minimum. 


More below the fold.


Chong Hing Bank (1111 HK): Scheme Doc Out. IFA Says Fair

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<p>PropertyGuru and Bridgetown 2 announced, on 23rd Jul 2021, that they have entered into a business combination agreement which will see PropertyGuru go public in the US. The transaction will value PropertyGuru at an EV of US$1.35bn and equity value of US$1.78bn.</p><p>We have looked at the company’s prior listing attempt when it tried to list in Australia in 2019. In this note, we will comment on the current listing arrangement.</p><p>Link to our previous notes:</p><ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/propertyguru-ipo-powered-by-singapore-recharged-by-vietnam-but-dragged-down-by-others" target="_blank" rel="noopener">PropertyGuru IPO - Powered by Singapore, Recharged by Vietnam but Dragged Down by Others</a></li>
<li><a href="https://www.smartkarma.com/insights/propertyguru-ipo-sotp-leaves-one-well-short-of-the-low-end" target="_blank" rel="noopener">PropertyGuru IPO - SOTP Leaves One Well Short of the Low-End</a></li>
<li><a href="https://www.smartkarma.com/insights/propertyguru-ipo-agents-q-a-shows-its-stranglehold-in-s-pore-throws-up-some-interesting-nuggets" target="_blank" rel="noopener">PropertyGuru IPO - Agents Q&amp;A Shows Its Stranglehold in S’pore; Throws up Some Interesting Nuggets</a></li>
</ul>

PropertyGuru and Bridgetown 2 announced, on 23rd Jul 2021, that they have entered into a business combination agreement which will see PropertyGuru go public in the US. The transaction will value PropertyGuru at an EV of US$1.35bn and equity value of US$1.78bn.We have looked at the company’s prior listing attempt when it tried to list in Australia in 2019. In this note, we will comment on the current listing arrangement.Link to our previous notes:
PropertyGuru IPO - Powered by Singapore, Recharged by Vietnam but Dragged Down by Others
PropertyGuru IPO - SOTP Leaves One Well Short of the Low-End
PropertyGuru IPO - Agents Q&amp;A Shows Its Stranglehold in S’pore; Throws up Some Interesting Nuggets


PropertyGuru/Bridgetown 2 SPAC Listing/Merger - Second Time Lucky - Some Food for Thought

Singapore

Oversea-Chinese Banking Corporation Limited offers a comprehensive range of financial services.  The Company's services include deposit-taking, corporate, enterprise and personal lending, international trade financing, investment banking, private banking, treasury, stockbroking, insurance, credit cards, cash management, asset management and other financial and related services.

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OCBC (OCBC SP)

Banks – Margins

With full data out from Singapore’s banks, it is becoming even clearer, how loan mix can impact net interest income, and margins. It is also a...

Daniel Tabbush

Oversea Chinese Banking Corp. – Re-Accelerating Credit Risk

OVERSEA CHINESE BANKING: OCBC reported a QOQ 2Q21 net profit decline of 22.7% driven by higher provisions and weaker associate income. Net new NPLs...

Thomas J. Monaco

Key Singapore Market Moves and Flows in July

The STI’s 1.2% gain in July brought its price gain over the first seven months to 11.4%, with dividends boosting the total return to 13.2%,...

Singapore Exchange Ltd (SGX)

Chong Hing Bank (1111 HK): Scheme Doc Out. IFA Says Fair

Taking over a bank at below book, not just with respect to precedent transactions, appears too cheap. Nevertheless, no other suitor will emerge....

David Blennerhassett

PropertyGuru/Bridgetown 2 SPAC Listing/Merger - Second Time Lucky - Some Food for Thought

PropertyGuru and Bridgetown 2 announced, that they have merge to take PropertyGuru go public in the US. The transaction will value PropertyGuru at...

Sumeet Singh

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