Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<div>
This insight provides a quick summary of gross/annualised (where possible) spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and how those spreads have changed over the last week; plus the next hard events over the coming weeks.
</div>
<div>
I number 40, mostly firm, deals around the region.
</div>
<div>
More below the fold.
</div>


This insight provides a quick summary of gross/annualised (where possible) spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and how those spreads have changed over the last week; plus the next hard events over the coming weeks.


I number 40, mostly firm, deals around the region.


More below the fold.


Asia-Pac Weekly Risk Arb Summary: Shinsei Bank, Aussie Pharma, Ebook Initiative, Smartgroup

Senior Bank Analyst - Japanese Banks, Windamee Research

J. Brian Waterhouse

Senior Bank Analyst - Japanese Banks

Windamee Research

Japanese Banks

Thematic (Sector/Industry)

Lending surged in CY2020 as Japan entered a prolonged COVID-induced nationwide lockdown, prompting corporates to draw down credit lines at banks in anticipation of severe business disruption and a heightened need for cash just to keep going.  However, much of that cash was redeposited with the banks for safekeeping until needed, swelling banks’ already overflowing coffers with more cash than they could possibly cope with profitably.Now that Japan is emerging from lockdown and business is hopefully returning slowly to some semblance of normality, much of that emergency borrowing is now being repaid.  Since much of that lending was kept with the banks anyway, loan repayments are being made using surplus bank deposits.The problem for the banks is that, even though YoY growth rates are showing a sharp decline, the net inflow continues to be higher than the net outflow despite the emergency loan repayments.  Major banks’ loan to deposit (LDR) ratios have been declining for years and have now fallen to historic lows of 48.5%.  It is becoming increasingly difficult for Japanese banks to make money on their domestic loan books; many are operating in the red on their domestic business, with even the largest banks at little better than break-even.<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/232/876/original/8300-WR-JBanks-2021-0930-Deposits-TheParty%27sOver-LDR-MajorvsReg+2002-2021.jpg?1633005641" class="editor-image img-responsive" data-smartkarma-image-id="232876"></figure></section>The Japanese banking sector in 2021 has outperformed Topix for the first time in several years, aided by a weakening Yen against the US$ and hopes for a steepening yield curve in the US.  Yet, as we head into the third quarter of FY3/2022, much of the earlier outperformance by the banking sector against Topix has already been given back.“Caveat Emptor!” (May the Buyer Beware) remains our advice to would-be investors in Japanese bank stocks for the remainder of 2021 and beyond.

Lending surged in CY2020 as Japan entered a prolonged COVID-induced nationwide lockdown, prompting corporates to draw down credit lines at banks in anticipation of severe business disruption and a heightened need for cash just to keep going.  However, much of that cash was redeposited with the banks for safekeeping until needed, swelling banks’ already overflowing coffers with more cash than they could possibly cope with profitably.Now that Japan is emerging from lockdown and business is hopefully returning slowly to some semblance of normality, much of that emergency borrowing is now being repaid.  Since much of that lending was kept with the banks anyway, loan repayments are being made using surplus bank deposits.The problem for the banks is that, even though YoY growth rates are showing a sharp decline, the net inflow continues to be higher than the net outflow despite the emergency loan repayments.  Major banks’ loan to deposit (LDR) ratios have been declining for years and have now fallen to historic lows of 48.5%.  It is becoming increasingly difficult for Japanese banks to make money on their domestic loan books; many are operating in the red on their domestic business, with even the largest banks at little better than break-even.The Japanese banking sector in 2021 has outperformed Topix for the first time in several years, aided by a weakening Yen against the US$ and hopes for a steepening yield curve in the US.  Yet, as we head into the third quarter of FY3/2022, much of the earlier outperformance by the banking sector against Topix has already been given back.“Caveat Emptor!” (May the Buyer Beware) remains our advice to would-be investors in Japanese bank stocks for the remainder of 2021 and beyond.

Japanese Bank Deposits:  The Party's Over


For the month of September, 9 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$14bn.



Clicking on the company name in the table below will take you to the entity page where you can read the initial insight(s) written by Smartkarma contributors on these new deals and follow-up discussions, or simply click on the insight link(s) below the name.







New Deals


Industry


Size (US$bn)


Type


Premium




Australia




Ausnet Services (AST AU) 
Transmission
7.0
Scheme
31%



AusNet Services (AST AU) Opens Its Books to Brookfield
AusNet Services (AST AU): Spurned APA Trumps Brookfield's Proposal
AusNet (AST AU): APA Elevates Tussle With Brookfield And Taps Takeover Panel




Ale Property (LEP AU) 
Pub properties
0.8
Scheme
N/A


ALE-Charter Hall: A Post-Lockdown Bet on Australian Pubs



Smartgroup Corp (SIQ AU) 
Employee services
1.0
Scheme
31.7%


Smartgroup (SIQ AU): Indicative Offer From TPG/Potential Capital/Aware Super



Japan




Maxvalu Nishinihon (8287 JP) / Fuji Co Ltd (8278 JP) 
Supermarkets
1.6
Merger
N/A


Fuji (8278) &amp; Maxvalu Nishinihon (8287): Aeon Family Supermarket Integration



Nippo Corp (1881 JP) 
Contractor
2.0
Tender Offer
13.8%



ENEOS To Steamroll Nippo (1881 JP) Minorities
NIPPO (1881 JP) Gets Some Cowbell - It Probably Needs More




Shinsei Bank (8303 JP) 
Financial
1.0
Hostile Offer
38.9%



SBI (8473) Launches a HOSTILE Tender Offer on Shinsei Bank (8303)!
Shinsei Bank - Valuations
Shinsei Looks To A Poison Pill, But Probably Not Really
Shinsei To Launch a Poison Pill; SBI Plays Coy, So We Wait SBI &amp; Shinsei Talking Past Each Other  




Malaysia




Scientex Bhd (SCI MK) 
Real estate
0.1
VTO
12.97%


Scientex - Daibochi: Unconditional Voluntary Take-Over Offer



Singapore








Roxy Pacific Holdings (ROXY SP) 
Real estate
0.3
Offer
19.8%


Roxy-Pacific (ROXY SP): Pre-Conditional Offer Led By Founder



US




iClick Interactive Asia Group (ICLK US) 
Online marketer
0.6
Merger
19%


IClick (ICLK US): PAG &amp; Oasis Shake The Trees


Source: Smartkarma Insights






The average premium for the new deals announced (or first discussed) in September was ~24%, with a year-to-date average of ~32% (121 deals &amp; total deal size of US$249bn).
This compares to the average premium for all deals in 2020 (158 deals) and 2019 (145 deals) of 31% and 31.5% respectively.



Offer Premium Summary




     




2019


2020


2021 YTD



Australia
33.0%
32.4%
34.9%


Hong Kong
25.2%
34.7%
33.9%


Japan
44.0%
35.2%
28.4%


ROW
29.1%
24.2%
33.1%


Average
31.5%
31.1%
32.4%



Source: Smartkarma Insights








Summary of News in September of Arb Situations On Smartkarma's Radar


(Again, click on the company names to take to you to the insights and/or discussion posts for a more comprehensive read-through on each situation)






Australia


Comments (with links to announcements &amp; insights)




1300 Smiles Ltd (ONT AU) 

No September update




5G Networks Ltd/Australia (5GN AU) / Webcentral (WCG AU) 

No September update




Afterpay Touch (APT AU) 

No September update




Australian Pharmaceutical Industries (API AU) 

17-Sep:  Aussie Pharma (API AU): Wesfarmer's Sweetened (Yet Indicative) Offer
27-Sep: Aussie Pharma (API AU): Sigma's Rival Bid (Just) Edges Wesfarmers
Sigma Healthcare (SIG AU)'s corporate affairs manager said due diligence can commence immediately. As API indicated that Sigma's NBIO was capable of being superior, it opened up access. So much for exclusive DD.




Empired Ltd (EPD AU) 

25-Sep: Empired (EPD AU): Scheme Booklet Out. Meeting On The 25 October




Hansen Technologies (HSN AU) 

5-Sep: And it's a no deal - BGH withdraws its proposal for Hansen Technologies (HSN AU).
 
"Having conducted extensive due diligence inquiries in relation to the company, BGH has not notified Hansen of any issue which Hansen considers material in the context of Hansen’s current operations and strategy. BGH Capital has advised the company that it continues to see Hansen as a highly effective organisation with an outstanding management team and strong prospects."




iCar Asia Ltd (ICQ AU) 

9-Sep: Carsome has requested an extension of the exclusivity period under the process deed with iCar Asia Ltd (ICQ AU), such that the exclusivity period is extended initially to the 30 September, then to automatically to the 30 October provided Casome has completed DD by the 30 Sept. Ithe board is currently minded to agree to this request.




Huon Aquaculture (HUO AU) 

23-Sep: Huon Aquaculture (HUO AU)'s Scheme Booklet is out. The Scheme Meeting will take place on the 29 October, with expected implementation on the 8 November.  28-Sep: The effective date under JBS' Offer has been changed to the 3 November from 4 November previously. 




Iress Ltd (IRE AU) 

16-Sep: Another deal failure. EGT and Iress Ltd (IRE AU) have been unable to agree to a transaction. 




Japara Healthcare (JHC AU) 

18-Sep: Japara Healthcare (JHC AU): 21st October Scheme Meeting




Mainstream Group Holdings Ltd (MAI AU) 
No September update



Milton Corp Ltd (MLT AU) 

3-Sep: Marvelous Milton Merger Mapping Mabbled: Ratio Done, Now For The Hard Part
17-Sep: Marvelous Milton and WHSP (SOL AU) Index Event Prepositioning Analysis




Oil Search Ltd (OSH AU) 

10-Sep: Oil Search/Santos: PNG a Potential Party Pooper




Rhipe Ltd (RHP AU) 

9-Sep: Rhipe (RHP AU): Done Deal As Scheme Booklet Dispatched




Spark Infrastructure (SKI AU) 

No September update




Sydney Airport (SYD AU) 

13-Sep:  Sydney Airport (SYD AU): Consortium Ups Bid And Granted Due Diligence




Think Childcare (TNK AU) 

29-Sep: Shareholders approved the Scheme




Youfoodz Holdings (YFZ AU) 

2-Sep: Youfoodz Holdings (YFZ AU) announced that the Federal court of Australia has approved the convening of Scheme Meeting and despatch of Scheme Booklet. The Scheme Meeting will be conducted as a virtual meeting (video conference) at 10.00 am (Sydney time) on Friday, 8th October 2021.










Hong Kong


Comments (with links to announcements &amp; insights)




Beijing Capital Land Ltd H (2868 HK) 

23-Sep: Beijing Capital Land Ltd H (2868 HK) H shareholders overwhelmingly approve the merger. The last day of trading in shares is today - the 24th.  Payment is expected on or before the 8 November. 




China Youzan Limited (8083 HK) 

No September update




Golden Throat Holdings (6896 HK) 

1-Sep: As expected, Golden Throat Holdings (6896 HK) has pushed out the dispatch date for the Scheme Dochemnt to the 19 October (on or before). 



Kerry Logistics Network (636 HK)

16-Sep: Partial closes for Kerry Logistics Network (636 HK) - 89.6% pro-ration. Not bad. 




Nature Home Holding Company (2083 HK) 

14-Sep: Nature Home (2083 HK): Scheme Doc Out. Court Meeting On 6 Oct. Evergrande Overhang
28-Sep: Nature Home (2083 HK): Risk Aversity Sees Spread Blow Out




Suchuang Gas Corp (1430 HK) 

27-Sep: Shares suspended for some reason.




Soho China Ltd (410 HK) 

10-Sep: Another deal break.










India


Comments 




Adani Power (ADANI IN) 

No September update




Mphasis Ltd (MPHL IN) 

No September update










Japan


Comments (with links to announcements &amp; insights)




GCA Corporation (2174 JP) 

9-Sep: Houlihan Lokey Bumps the GCA Offer - A Whopping 1.3%!!!
28-Sep: The Houlihan Lokey (HLI US) takeout of GCA Corporation (2174 JP) is on its way. The Tender Offer Result was just announced and HLI has 89.58%. That means there will be an EGM and squeezeout. 




Hitachi Metals (5486 JP) 

No September update




Sakai Ovex (3408 JP) 
9-Sep: The Sakai Ovex (3408 JP) Tender Offer has been completed successfully. 
The bidders did not get as much as I thought they might, but the top owner has 77.27%.  That means the squeezeout will go through an EGM and this will be delisted maybe a month after the EGM.










Malaysia


Comments 




Ijm Plantations (IJMP MK) 
No September update



MMC Corp Bhd (MMC MK) 
22-Sep: MMC Corp (MMC MK): This Is A Buy








New Zealand


Comments 




Z Energy Ltd (ZEL NZ) 
27-Sep: Z Energy Ltd (ZEL NZ) announced that the original four-week exclusivity period with Ampol has been extended by a further two weeks.









Taiwan


Comments (with links to insights &amp; announcements)




China Development Financial (2883 TT) / China Life Insurance (2823 TT)

No September update












(Mostly) Asia M&A: September 2021 Roundup

Travis Lundy

Since <a href="https://www.smartkarma.com/entities/sbi-holdings-inc" target="_blank" data-smartkarma-citation="entities:10928:1" rel="noopener">SBI Holdings (8473 JP)</a> launched a Tender Offer to buy 27+% of <a href="https://www.smartkarma.com/entities/shinsei-bank-ltd" target="_blank" data-smartkarma-citation="entities:16897:1" rel="noopener">Shinsei Bank (8303 JP)</a> to take it to a 48% stake nearly three weeks ago, there has been considerable back and forth between the two parties - both directly in press releases and Opinion Statements - and through the press and speculation/opinion/commentary by disinterested third parties.The series of interactions in public in a kind of dual-path 'Call and Response' function is shown below. <table class="table table-striped">
<colgroup>
<col>
<col span="2">
<col>
</colgroup>
<tbody>
<tr><td colspan="4" style="text-align: left; width: 675pt;"><h2>The Series of Documents - Call &amp; Response</h2></td></tr>
<tr>
<td>Date</td>
<td>Issuer</td>
<td>Language</td>
<td>Title</td>
</tr>
<tr>
<td>09-Sep-21</td>
<td>SBI</td>
<td>English</td>
<td><a href="https://www.sbigroup.co.jp/english/news/pdf/2021/0909_a_en.pdf" target="_blank" rel="noopener">Notice Regarding Commencement of Tender Offer</a></td>
</tr>
<tr>
<td colspan="3" style="text-align: center;"></td>
<td>Self-explanatory</td>
</tr>
<tr>
<td>09-Sep-21</td>
<td>Shinsei</td>
<td>English</td>
<td>Acknowledgment of Tender Offer</td>
</tr>
<tr>
<td colspan="3" style="text-align: center;"></td>
<td>Self-explanatory</td>
</tr>
<tr>
<td>17-Sep-21</td>
<td>Shinsei</td>
<td>English</td>
<td><a href="https://www.shinseibank.com/corporate/en/news/pdf/pdf2021/210917" target="_blank" rel="noopener">Notice of Introduction of Takeover Defense Measures</a></td>
</tr>
<tr>
<td colspan="3" style="text-align: center;"></td>
<td>Shinsei proposes a Poison Pill to be decided at an EGM</td>
</tr>
<tr>
<td>17-Sep-21</td>
<td>Shinsei</td>
<td>English</td>
<td><a href="https://www.shinseibank.com/corporate/en/news/pdf/pdf2021/210917_Announcement2_e.pdf" target="_blank" rel="noopener">Notice of Reservation of Opinion on TOB</a></td>
</tr>
<tr>
<td colspan="3" style="text-align: center;"></td>
<td>Shinsei says SBI's account is not completely accurate, clarifies 2019 proposal</td>
</tr>
<tr>
<td>17-Sep-21</td>
<td>SBI</td>
<td>Japanese</td>
<td><a href="https://www.sbigroup.co.jp/news/2021/0917_12649.html" target="_blank" rel="noopener">Notice Regarding the Tender Offer for Shinsei Bank</a></td>
</tr>
<tr>
<td colspan="3" style="text-align: center;"></td>
<td>SBI says that the Poison Pill is a Delaying Tactic and is bad</td>
</tr>
<tr>
<td>24-Sep-21</td>
<td>SBI</td>
<td>English</td>
<td><a href="https://www.sbigroup.co.jp/english/news/pdf/2021/0924_a_en.pdf" target="_blank" rel="noopener">Notice Regarding Our Response to “Request for Extension of End Date of Tender Offer"</a></td>
</tr>
<tr>
<td colspan="3" style="text-align: center;"></td>
<td>SBI Says will extend if Shinsei Responds to Four Points</td>
</tr>
<tr>
<td>27-Sep-21</td>
<td>Shinsei</td>
<td>English</td>
<td><a href="https://www.shinseibank.com/corporate/en/news/pdf/pdf2021/210927_Announcement_e.pdf" target="_blank" rel="noopener">Notice Regarding Response from SBI Regional Holdings to Shinsei Questions</a></td>
</tr>
<tr>
<td colspan="3" style="text-align: center;"></td>
<td>Shinsei responds, saying four points irrelevant; ignores three questions</td>
</tr>
<tr>
<td>28-Sep-21</td>
<td>SBI</td>
<td>English</td>
<td><a href="https://www.sbigroup.co.jp/english/news/pdf/2021/0928_a_en.pdf" target="_blank" rel="noopener">Notice Regarding Our Response to “Questions to SBI"</a></td>
</tr>
<tr>
<td colspan="3" style="text-align: center;"></td>
<td>SBI Provides responses to Shinsei's questions</td>
</tr>
<tr>
<td>29-Sep-21</td>
<td>SBI</td>
<td>Japanese</td>
<td><a href="https://www.sbigroup.co.jp/news/2021/0929_12663.html" target="_blank" rel="noopener">Notice Regarding Extension of TOB for Shinsei Bank</a></td>
</tr>
<tr>
<td colspan="3" style="text-align: center;"></td>
<td>Response indicating displeasure to Shinsei's responses to four points and three questions</td>
</tr>
</tbody>
</table>The interaction so far can be described as follows:<ol>
<li>SBI launches a TOB. Shinsei says "Oh no."</li>
<li>Shinsei says SBI's portrayal of the original approach was "inaccurate". Shinsei looks for a white knight, and launches a poison pill defense. </li>
<li>Then they both talk past each other. </li>
</ol>Most of the interaction so far has been utterly pointless. The only really interesting part of the entire charade has been the "clarification" that in the original 2019 proposal, SBI had proposed buying a large stake, having Shinsei then raise BVPS and EPS by buying shares in the market, then squeezing out minorities, then agreeing to buy back the government's stake at a much higher price. <div class="content-remarks">While it was utterly appropriate for Shinsei to reject that as a proposal, the failure of that proposal to gain traction was not so much in the content as it was in the way it was presented. SBI buys a stake, Shinsei buys back shares, and eventually accretion gets to a point where Shinsei can buy back the shares held by the government. That's a pretty story in hindsight. There was no good reason to lay it out for all to see initially. </div>So where we stand now is that Shinsei has launched the Poison Pill, both sides have established that they are talking past each other, and it will become a war of public relations with Shinsei trying to convince various parties who fundamentally don't want to approve a poison pill that this time it would be OK to do so. So we wait... In the meantime, there are some interesting things going on.

Since SBI Holdings (8473 JP) launched a Tender Offer to buy 27+% of Shinsei Bank (8303 JP) to take it to a 48% stake nearly three weeks ago, there has been considerable back and forth between the two parties - both directly in press releases and Opinion Statements - and through the press and speculation/opinion/commentary by disinterested third parties.The series of interactions in public in a kind of dual-path 'Call and Response' function is shown below. 






The Series of Documents - Call &amp; Response

Date
Issuer
Language
Title


09-Sep-21
SBI
English
Notice Regarding Commencement of Tender Offer



Self-explanatory


09-Sep-21
Shinsei
English
Acknowledgment of Tender Offer



Self-explanatory


17-Sep-21
Shinsei
English
Notice of Introduction of Takeover Defense Measures



Shinsei proposes a Poison Pill to be decided at an EGM


17-Sep-21
Shinsei
English
Notice of Reservation of Opinion on TOB



Shinsei says SBI's account is not completely accurate, clarifies 2019 proposal


17-Sep-21
SBI
Japanese
Notice Regarding the Tender Offer for Shinsei Bank



SBI says that the Poison Pill is a Delaying Tactic and is bad


24-Sep-21
SBI
English
Notice Regarding Our Response to “Request for Extension of End Date of Tender Offer"



SBI Says will extend if Shinsei Responds to Four Points


27-Sep-21
Shinsei
English
Notice Regarding Response from SBI Regional Holdings to Shinsei Questions



Shinsei responds, saying four points irrelevant; ignores three questions


28-Sep-21
SBI
English
Notice Regarding Our Response to “Questions to SBI"



SBI Provides responses to Shinsei's questions


29-Sep-21
SBI
Japanese
Notice Regarding Extension of TOB for Shinsei Bank



Response indicating displeasure to Shinsei's responses to four points and three questions


The interaction so far can be described as follows:
SBI launches a TOB. Shinsei says "Oh no."
Shinsei says SBI's portrayal of the original approach was "inaccurate". Shinsei looks for a white knight, and launches a poison pill defense. 
Then they both talk past each other. 
Most of the interaction so far has been utterly pointless. The only really interesting part of the entire charade has been the "clarification" that in the original 2019 proposal, SBI had proposed buying a large stake, having Shinsei then raise BVPS and EPS by buying shares in the market, then squeezing out minorities, then agreeing to buy back the government's stake at a much higher price. While it was utterly appropriate for Shinsei to reject that as a proposal, the failure of that proposal to gain traction was not so much in the content as it was in the way it was presented. SBI buys a stake, Shinsei buys back shares, and eventually accretion gets to a point where Shinsei can buy back the shares held by the government. That's a pretty story in hindsight. There was no good reason to lay it out for all to see initially. So where we stand now is that Shinsei has launched the Poison Pill, both sides have established that they are talking past each other, and it will become a war of public relations with Shinsei trying to convince various parties who fundamentally don't want to approve a poison pill that this time it would be OK to do so. So we wait... In the meantime, there are some interesting things going on.

Loan data for August 2021 from both the Japanese Bankers Association (JBA) and the Bank of Japan (BoJ) confirm that YoY loan growth for all Japanese commercial banks is now in negative territory, driven by a sharp YoY decline in lending by the major banks over the last four months.  Even on a month-on-month basis, total lending by Japanese banks has been falling for four out of the last five months.  Credit lines that were drawn down in 2020 as Japan went into nationwide COVID-induced lockdown, but were ultimately largely unneeded, are now being repaid.Interest rates remain at rock bottom, a fact that helps minimize funding costs, while the recovery in the stock market has given the banks some valuable ‘breathing space’ to offset rising credit costs with gains on selling some of the investment portfolio.  Nevertheless, margins remain under intense pressure, pushing core earnings down.  The quality of bank profits therefore continues to deteriorate, even though bottom-line profits for 1H FY3/2022 are likely to exceed most banks’ cautious initial earnings guidance.  That said, we expect few banks to opt to raise their full-year guidance significantly, regardless of 1H FY3/2022 results (due out mid-November).The Japanese banking sector in 2021 has outperformed Topix for the first time in several years, aided by a weakening Yen against the US$.  Yet, as we head into the third quarter of FY3/2022, much of the earlier outperformance by the banking sector against Topix has already been given back.“Caveat Emptor!” (May the Buyer Beware) remains our advice to would-be investors in Japanese bank stocks for the remainder of 2021 and beyond.<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/232/501/original/8300-WR-JBanks-2021-0719-TooLow4Zero-TPNBNKvsTPX+2015-2021.jpg?1632884040" class="editor-image img-responsive" data-smartkarma-image-id="232501"></figure></section>

Loan data for August 2021 from both the Japanese Bankers Association (JBA) and the Bank of Japan (BoJ) confirm that YoY loan growth for all Japanese commercial banks is now in negative territory, driven by a sharp YoY decline in lending by the major banks over the last four months.  Even on a month-on-month basis, total lending by Japanese banks has been falling for four out of the last five months.  Credit lines that were drawn down in 2020 as Japan went into nationwide COVID-induced lockdown, but were ultimately largely unneeded, are now being repaid.Interest rates remain at rock bottom, a fact that helps minimize funding costs, while the recovery in the stock market has given the banks some valuable ‘breathing space’ to offset rising credit costs with gains on selling some of the investment portfolio.  Nevertheless, margins remain under intense pressure, pushing core earnings down.  The quality of bank profits therefore continues to deteriorate, even though bottom-line profits for 1H FY3/2022 are likely to exceed most banks’ cautious initial earnings guidance.  That said, we expect few banks to opt to raise their full-year guidance significantly, regardless of 1H FY3/2022 results (due out mid-November).The Japanese banking sector in 2021 has outperformed Topix for the first time in several years, aided by a weakening Yen against the US$.  Yet, as we head into the third quarter of FY3/2022, much of the earlier outperformance by the banking sector against Topix has already been given back.“Caveat Emptor!” (May the Buyer Beware) remains our advice to would-be investors in Japanese bank stocks for the remainder of 2021 and beyond.

Japanese Bank Lending:  Too Low For Zero

Japan

SBI Shinsei Bank, Ltd. provides banking services including deposits, loans, and foreign exchange transaction, as well as investment trust service and issuance of long-term bonds.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

SBI Shinsei Bank (8303 JP)

Asia-Pac Weekly Risk Arb Summary: Shinsei Bank, Aussie Pharma, Ebook Initiative, Smartgroup

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett

Japanese Bank Deposits: The Party's Over

With Japan emerging from lockdown, emergency loans are being repaid, often using surplus deposits. But deposit declines are less than loan...

J. Brian Waterhouse

(Mostly) Asia M&A: September 2021 Roundup

For the month of September, 9 new deals were discussed on Smartkarma with an announced deal size of ~US$14bn. The average premium in September was...

David Blennerhassett

SBI & Shinsei Talking Past Each Other

SBI launched a Tender Offer on Shinsei. Shinsei has launched a poison pill to try to block SBI. There is interaction, but it is largely worthless....

Travis Lundy

Japanese Bank Lending: Too Low For Zero

Data for August 2021 from both the JBA and the BoJ confirm that YoY loan growth for all Japanese commercial banks has turned negative, driven by a...

J. Brian Waterhouse

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)