Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

Back on the 4 March, <a href="https://www.smartkarma.com/entities/bank-of-east-asia-ltd" target="_blank" data-smartkarma-citation="entities:341:1" rel="noopener">Bank of East Asia (23 HK)</a> <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0304/2020030400035.pdf" target="_blank" rel="noopener">announced</a> a strategic review of its portfolio. The review was supported by Elliott Management, and was viewed as a tentative truce between the two ahead of an expected court date to arbitrate BEA's alleged relationship with two of its key shareholders, Japan’s <a href="https://www.smartkarma.com/entities/sumitomo-mitsui-financial-gr" target="_blank" data-smartkarma-citation="entities:217:1" rel="noopener">Sumitomo Mitsui Financial (8316 JP)</a> and Spain’s <a href="https://www.smartkarma.com/entities/caixabank-sa" target="_blank" data-smartkarma-citation="entities:21255:1" rel="noopener">CaixaBank SA (CABK SM)</a>. I discussed this development in <a href="https://skr.ma/f3hfy" target="_blank" rel="noopener">Elliott &amp; BEA: "Fiefdom" On Pause</a>.
Fast forward six and half months and BEA has <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0923/2020092300183.pdf" target="_blank" rel="noopener">decided</a> to initiate a "sale process for BEA Life Limited (“BEA Life”) in order to enhance the value of the Bank’s business, improve its financial position and enable its management team to focus on its core banking operations in Hong Kong and Mainland China".  The announcement was supported by Elliott.
BEA added that it would seek to enter into a "long-term exclusive distribution agreement that will provide an ongoing source of revenue for BEA as a distributor of insurance products through its banking platform."
Reportedly BEA could raise US$500mn-US$600mn from the sale, which is roughly in line with the gross written premiums of HK$4.8bn in 2019; and ~5.5x the net insurance premium of HK$826mn in FY19. 
BEA said it would further identify opportunities to grow its core businesses   - presumably this already formed part of its forward roadmap. 
But does the sale and formation of a so-called bancassurance partnership, make BEA a more attractive company (as a standalone or takeover target); or a less attractive bank as it focuses on is pedestrian traditional banking ops? Or is this simply, just the opening salvo from its ongoing strategy?
As always, more below the fold.

Back on the 4 March, Bank of East Asia (23 HK) announced a strategic review of its portfolio. The review was supported by Elliott Management, and was viewed as a tentative truce between the two ahead of an expected court date to arbitrate BEA's alleged relationship with two of its key shareholders, Japan’s Sumitomo Mitsui Financial (8316 JP) and Spain’s CaixaBank SA (CABK SM). I discussed this development in Elliott &amp; BEA: "Fiefdom" On Pause.
Fast forward six and half months and BEA has decided to initiate a "sale process for BEA Life Limited (“BEA Life”) in order to enhance the value of the Bank’s business, improve its financial position and enable its management team to focus on its core banking operations in Hong Kong and Mainland China".  The announcement was supported by Elliott.
BEA added that it would seek to enter into a "long-term exclusive distribution agreement that will provide an ongoing source of revenue for BEA as a distributor of insurance products through its banking platform."
Reportedly BEA could raise US$500mn-US$600mn from the sale, which is roughly in line with the gross written premiums of HK$4.8bn in 2019; and ~5.5x the net insurance premium of HK$826mn in FY19. 
BEA said it would further identify opportunities to grow its core businesses   - presumably this already formed part of its forward roadmap. 
But does the sale and formation of a so-called bancassurance partnership, make BEA a more attractive company (as a standalone or takeover target); or a less attractive bank as it focuses on is pedestrian traditional banking ops? Or is this simply, just the opening salvo from its ongoing strategy?
As always, more below the fold.

BEA (23 HK): Big Banc Theory And Elliott's Hard Slog

Asean-focused. Ex-Head of Thai Research

Athaporn Arayasantiparb, CFA

Godzilla vs King Kong of Thai Banking. We noticed on the Discovery tool that two stocks that topped the list in Thailand were rival banks, SCB and KBANK, so it would be kinda fun to do a quick Superman vs Terminator comparison for our first piece in May. Most investors tend to ignore BBL (the country's biggest bank by assets profiled in <a href="https://www.smartkarma.com/insights/rabble-rousers-ep-3-the-king-of-banks" target="_blank" data-smartkarma-citation="insights:6762">Rabble Rousers (Ep. 3): The King of Banks</a>), because of the overly conservative management and slow pace of expansion, while KTB ( <a href="https://www.smartkarma.com/insights/big-brother-ep-3-blessing-or-bane" target="_blank" data-smartkarma-citation="insights:7599">Big Brother (Ep 3): Blessing or</a>…

Godzilla vs King Kong of Thai Banking. We noticed on the Discovery tool that two stocks that topped the list in Thailand were rival banks, SCB and KBANK, so it would be kinda fun to do a quick Superman vs Terminator comparison for our first piece in May. Most investors tend to ignore BBL (the country's biggest bank by assets profiled in Rabble Rousers (Ep. 3): The King of Banks), because of the overly conservative management and slow pace of expansion, while KTB ( Big Brother (Ep 3): Blessing or…

Asia Ex-J Consumer/ Transport analyst

Valerie Law, CFA

Thematic (Sector/Industry)

In this week's ASEAN Weekly, I decided to fill in for the series as I suspect <a href="https://www.smartkarma.com/profiles/937" target="_blank" data-smartkarma-citation="accounts:937">Angus Mackintosh</a> is collecting good stories in J-town but got stuck in heavy traffic (with no Internet connection).  Macro<a href="https://www.smartkarma.com/profiles/35" target="_blank" data-smartkarma-citation="accounts:35">Manu Bhaskaran</a> asks if tax increases are really needed in Singapore, given that healthcare and social spending is rising at a rapid clip. In Malaysia, with the Malaysian ringgit down 6.7% YoY and higher oil prices that take inflation above 3% YoY,  <a href="https://www.smartkarma.com/profiles/612" target="_blank" data-smartkarma-citation="accounts:612">Prasenjit K. Basu</a> expects Bank Negara to raise…

In this week's ASEAN Weekly, I decided to fill in for the series as I suspect Angus Mackintosh is collecting good stories in J-town but got stuck in heavy traffic (with no Internet connection).  MacroManu Bhaskaran asks if tax increases are really needed in Singapore, given that healthcare and social spending is rising at a rapid clip. In Malaysia, with the Malaysian ringgit down 6.7% YoY and higher oil prices that take inflation above 3% YoY,  Prasenjit K. Basu expects Bank Negara to raise…

The Week That Was in Asean@Smartkarma - Sweet Deals, Seaweeds and Shifting Patient Flows

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

Smartkarma

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

Research Reinvented

In this week's ASEAN offering we have some quite controversial commentary on the Singapore Banks, that suggest that there is more pain to come on credit costs. Three Insight Providers comment on Indonesia's current political standoff and the prospects for economy. We have a travel report and overview on Sri Lanka versus other Frontier Vietnam and Pakistan. We ask, can <a href="https://www.smartkarma.com/entities/497" target="_blank" data-smartkarma-citation="entities:497:1">Comfortdelgro Corp Ltd (CD SP)</a> win out against innovative competitors and improving public transport? We have interesting post…

In this week's ASEAN offering we have some quite controversial commentary on the Singapore Banks, that suggest that there is more pain to come on credit costs. Three Insight Providers comment on Indonesia's current political standoff and the prospects for economy. We have a travel report and overview on Sri Lanka versus other Frontier Vietnam and Pakistan. We ask, can Comfortdelgro Corp Ltd (CD SP) win out against innovative competitors and improving public transport? We have interesting post…

The Week That Was in ASEAN@Smartkarma - Banking Woes, the Rise of the Machines and Big Box Shopping

Recently, MCorp Review listened to a talk by E8 Consulting on open source and its applications in building fintech platforms and developing investing strategies and found it quite interesting. Firstly, they defined open source and explained why it was so useful. Typically, open source is free and bound by certain license terms; it allows various users to change the source code and develop commercial applications for it. Probably, the best example of this is how Bloomberg terminals, a highly…

Recently, MCorp Review listened to a talk by E8 Consulting on open source and its applications in building fintech platforms and developing investing strategies and found it quite interesting. Firstly, they defined open source and explained why it was so useful. Typically, open source is free and bound by certain license terms; it allows various users to change the source code and develop commercial applications for it. Probably, the best example of this is how Bloomberg terminals, a highly…

Thailand

SCB Life Assurance Pcl offers life insurance.  The Company offers both individual and group life insurance and markets it through agents, banks, and over the telephone.

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Scb Life Assurance (SCBLIF TB)

BEA (23 HK): Big Banc Theory And Elliott's Hard Slog

Just two months before Elliott Management and Bank Of East Asia (23 HK) head back to court to arbitrate on BEA's purported overarching relationship...

David Blennerhassett

Battle of the Bankers: SCB Vs KBANK

Godzilla vs King Kong of Thai Banking. We noticed on the Discovery tool that two stocks that topped the list in Thailand were rival banks, SCB and...

Athaporn Arayasantiparb, CFA

The Week That Was in Asean@Smartkarma - Sweet Deals, Seaweeds and Shifting Patient Flows

In this week's ASEAN Weekly, I decided to fill in for the series as I suspect Angus Mackintosh is collecting good stories in J-town but got stuck...

Valerie Law, CFA

The Week That Was in ASEAN@Smartkarma - Banking Woes, the Rise of the Machines and Big Box Shopping

In this week's ASEAN offering we have some quite controversial commentary on the Singapore Banks, that suggest that there is more pain to come on...

Angus Mackintosh

EB on Open Source & Investing

Recently, MCorp Review listened to a talk by E8 Consulting on open source and its applications in building fintech platforms and developing...

Athaporn Arayasantiparb, CFA

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