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.

Equity Bottom-Up

Sumitomo Mitsui Financial Group / Equity Bottom-Up

<ul>
<li>SMFG can benefit like peer banks from BOJ policy change, but less so than MUFG, while at the same time, there does not appear to be a strong alpha story</li>
<li>ROE and ROA for SMFG show now expansion over the years, and this is stark contrast to MUFG, part of this appears to be due many weak subsidiaries</li>
<li>Credit costs are now averaging 23bps over the past four quarters vs 13bps during 1Q18 to 4Q19, not improving credit metrics like many others, with high write-offs.</li>
</ul>


SMFG can benefit like peer banks from BOJ policy change, but less so than MUFG, while at the same time, there does not appear to be a strong alpha story
ROE and ROA for SMFG show now expansion over the years, and this is stark contrast to MUFG, part of this appears to be due many weak subsidiaries
Credit costs are now averaging 23bps over the past four quarters vs 13bps during 1Q18 to 4Q19, not improving credit metrics like many others, with high write-offs.


SMFG (8316) - 75% Less JGBs than MUFG | Affiliates Show Worsening Profit | Credit Costs ~2x Vs Past

Mitsubishi UFJ Financial (MUFG) / Equity Bottom-Up

<ul>
<li>The biggest Japan banks by assets, in spotlight as near ending of negative interest rates, with lowest LDR, so highest bonds, cash, can see major benefit from YCC relief</li>
<li>Years of low ROE at 5-7% seem behind MUFG now with 12-17% in past two quarters, where leverage is not out of control, with cost improvements key</li>
<li>Loss loans down 29% over past two years, can support low credit costs, which dropped sharply from 81bps to 15bps from 3Q23 to 1Q24, possibly moving to reversals</li>
</ul>


The biggest Japan banks by assets, in spotlight as near ending of negative interest rates, with lowest LDR, so highest bonds, cash, can see major benefit from YCC relief
Years of low ROE at 5-7% seem behind MUFG now with 12-17% in past two quarters, where leverage is not out of control, with cost improvements key
Loss loans down 29% over past two years, can support low credit costs, which dropped sharply from 81bps to 15bps from 3Q23 to 1Q24, possibly moving to reversals


MUFG (8306) - Biggest JPN Bank, Lowest LDR at 48%: Most Bonds | ROE Surge to 12% May Be Sustainable

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.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/integral-corporation" target="_blank" data-smartkarma-citation="entities:40028:1" rel="noopener">Integral Corporation (5842 JP)</a> is looking to raise around US$123m in its Japan IPO.</li>
<li>Integral is a private equity management company advising funds that invest in both listed and unlisted companies in Japan, with a focus on mid-sized companies.</li>
<li>In our previous notes, we looked at the company’s past performance. In this note, we talk about valuation.</li>
</ul>



Integral Corporation (5842 JP) is looking to raise around US$123m in its Japan IPO.
Integral is a private equity management company advising funds that invest in both listed and unlisted companies in Japan, with a focus on mid-sized companies.
In our previous notes, we looked at the company’s past performance. In this note, we talk about valuation.


Integral Corporation Pre-IPO - Thoughts on Valuation

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>Last week (Aug. 18) we discussed the 10-year Treasury yield and DXY testing respective resistance (4.3%-4.35% and $103.50-$103.70).</li>
<li>As long as no decisive breakouts in the 10-year yield or DXY, we were buyers on the pullback to $93 on MSCI ACWI (ACWI-US).</li>
<li>Outside of our overweight countries (Japan, India, Taiwan, Greece), defensive Sectors continue to lag. We highlight buys in Technology, Services, Consumer Discretionary, Industrials, Materials/Energy, and Financials.</li>
</ul>


Last week (Aug. 18) we discussed the 10-year Treasury yield and DXY testing respective resistance (4.3%-4.35% and $103.50-$103.70).
As long as no decisive breakouts in the 10-year yield or DXY, we were buyers on the pullback to $93 on MSCI ACWI (ACWI-US).
Outside of our overweight countries (Japan, India, Taiwan, Greece), defensive Sectors continue to lag. We highlight buys in Technology, Services, Consumer Discretionary, Industrials, Materials/Energy, and Financials.


Key Supports Holding Strong; 10-Year Treasury Yield Below Key Resistance; Buys in Non-Defensives

Mizuho Financial Group / Equity Bottom-Up

<ul>
<li>Mizuho has well positioned for YCCC relief with its balance sheet management in 1Q24</li>
<li>Less low yielding cash assets, higher loans, securities, shift into NCDs, from deposits</li>
<li>Mizuho reports credit costs reversals and better credit metrics are clear in NPL detail</li>
</ul>


Mizuho has well positioned for YCCC relief with its balance sheet management in 1Q24
Less low yielding cash assets, higher loans, securities, shift into NCDs, from deposits
Mizuho reports credit costs reversals and better credit metrics are clear in NPL detail


Mizuho - Strong Balance Sheet Management & With Better Credit Metrics

Japan

Sumitomo Mitsui Financial Group, Inc. manages financial operations for its subsidiaries. The Company provides commercial banking and a variety of financial services.

Sumitomo Mitsui Financial Group (8316 JP)

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Sumitomo Mitsui Financial Group (8316 JP)

SMFG (8316) - 75% Less JGBs than MUFG | Affiliates Show Worsening Profit | Credit Costs ~2x Vs Past

SMFG appears less leveraged to BOJ policy changes than MUFG, especially with ~75% less JGBs. It appears a less interesting alpha story; profit...

Daniel Tabbush

MUFG (8306) - Biggest JPN Bank, Lowest LDR at 48%: Most Bonds | ROE Surge to 12% May Be Sustainable

With a view on YCC relief, no more negative interest rates, MUFG is one to focus on: largest bank in Japan by assets, mkt cap, low 48% LDR - lower...

Daniel Tabbush

Integral Corporation Pre-IPO - Thoughts on Valuation

Integral Corporation (5842 JP) is looking to raise around US$123m in its Japan IPO. In this note, we talk about valuations.

Sumeet Singh

Key Supports Holding Strong; 10-Year Treasury Yield Below Key Resistance; Buys in Non-Defensives

We remain constructive on global equities as long as $ACWI remains above $93 (1+ year base support). 10-year Treasury yield $TNX holding below 4.3...

Vermilion Research

Mizuho - Strong Balance Sheet Management & With Better Credit Metrics

JGB yields are surging now up to 0.657% where Mizuho can benefit substantially, also with likely sharply higher company profit forecast. Weakening...

Daniel Tabbush

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