Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

Mizuho Financial Group / Equity Bottom-Up

<ul>
<li>The Financial System Report published on April 18th focuses on the key Japanese bank issues, including the prospect of domestic rate hikes</li>
<li>We focus primarily on the key take-aways from the BoJ report, in particular with relation to potential rate hikes; our key picks appear to be better geared than the average</li>
<li>We highlight Resona, Mizuho and Concordia in the bigger caps, with positive views on Suruga, Gunma and Tokyo Kiraboshi in the regional banks</li>
</ul>


The Financial System Report published on April 18th focuses on the key Japanese bank issues, including the prospect of domestic rate hikes
We focus primarily on the key take-aways from the BoJ report, in particular with relation to potential rate hikes; our key picks appear to be better geared than the average
We highlight Resona, Mizuho and Concordia in the bigger caps, with positive views on Suruga, Gunma and Tokyo Kiraboshi in the regional banks


Potential Domestic Rate Hike Impacts Highlighted in the BoJ’s Latest Financial System Report

<ul>
<li>The Japanese banks’ share prices have barely moved following the Bank of Japan’s exit from negative interest rates; is it largely discounted or does the continued accommodative stance instil caution? </li>
<li>Japanese banks will benefit from 100% of their deposits at the BoJ earning 0.1%, as opposed to 40% of bank deposits which was the case up to the 20th March</li>
<li>We believe our positive recommendations are all geared into higher domestic interest rates; we highlight Resona, Mizuho and Suruga in this report for their high cash and at bank balances</li>
</ul>


The Japanese banks’ share prices have barely moved following the Bank of Japan’s exit from negative interest rates; is it largely discounted or does the continued accommodative stance instil caution? 
Japanese banks will benefit from 100% of their deposits at the BoJ earning 0.1%, as opposed to 40% of bank deposits which was the case up to the 20th March
We believe our positive recommendations are all geared into higher domestic interest rates; we highlight Resona, Mizuho and Suruga in this report for their high cash and at bank balances


Japanese Banks – Cash Balances and the BoJ’s Negative Interest Rate Policy Exit

Tokyo Kiraboshi Financial Group / Equity Bottom-Up

<ul>
<li>We explore twelve Japanese regional banks to look for key beneficiaries of the improving interest rate outlook, along with valuations, credit quality and capital adequacy</li>
<li>The global interest rate outlook is in some flux, with the Fed’s and ECB’s prospects of near-term easing being tempered; this should support Japanese JGB yields and domestic bank valuations</li>
<li>We are positive on three banks that are big beneficiaries of rising domestic interest rates; top pick Tokyo Kiraboshi Financial, Gunma Bank and higher risk option Suruga Bank</li>
</ul>


We explore twelve Japanese regional banks to look for key beneficiaries of the improving interest rate outlook, along with valuations, credit quality and capital adequacy
The global interest rate outlook is in some flux, with the Fed’s and ECB’s prospects of near-term easing being tempered; this should support Japanese JGB yields and domestic bank valuations
We are positive on three banks that are big beneficiaries of rising domestic interest rates; top pick Tokyo Kiraboshi Financial, Gunma Bank and higher risk option Suruga Bank


Japanese Regional Banks – Three Key Positive Picks

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Several days ago I published a piece showing the data for TOPIX flows for April month-end.</li>
<li>This is an update reflecting new data companies have reported to regulators, one large correction to a data provider's data, and one Very Large Flow.</li>
<li>I believe that the revised data is more accurate. And there is more flow. With a spreadsheet attached. </li>
</ul>


Several days ago I published a piece showing the data for TOPIX flows for April month-end.
This is an update reflecting new data companies have reported to regulators, one large correction to a data provider's data, and one Very Large Flow.
I believe that the revised data is more accurate. And there is more flow. With a spreadsheet attached. 


Updated TOPIX Big April Basket Flows; More Big Flows and ¥270bn a Side

<ul>
<li>Every year in April there is an interesting phenomenon with TOPIX. It is what <a href="https://www.smartkarma.com/profiles/janaghan-jeyakumar-cfa" target="_blank" data-smartkarma-citation="accounts:3173" rel="noopener">Janaghan Jeyakumar, CFA</a> calls "The Big April Basket." The TSE re-assesses Liquidity Factor Coefficients.</li>
<li>It also does a FFW change, and this year it has Phased Weight Reductions for those slowly leaving TOPIX and PWR re-inclusions for those identified last October as going back.</li>
<li>Janaghan had 18 "High Conviction" LF removals. All were hits. They are upweights. Then there are 34 changes to FFW coefficients.</li>
</ul>


Every year in April there is an interesting phenomenon with TOPIX. It is what Janaghan Jeyakumar, CFA calls "The Big April Basket." The TSE re-assesses Liquidity Factor Coefficients.
It also does a FFW change, and this year it has Phased Weight Reductions for those slowly leaving TOPIX and PWR re-inclusions for those identified last October as going back.
Janaghan had 18 "High Conviction" LF removals. All were hits. They are upweights. Then there are 34 changes to FFW coefficients.


The TOPIX Big April Basket Flows:  ¥200bn a Side Including Many Multi-ADV Flows

Japan

The San-in Godo Bank, Ltd. is a regional bank mainly operating in Shimane and Tottori Prefectures.  The Bank offers banking services including deposits, loans, foreign exchange transactions, and securities brokerage.  The San-in Godo Bank also provides financial services such as leasing, credit cards, letter of credit, invests in venture capital, and develops software.

North Pacific Bank, Ltd. is the surviving company through the merger of Sapporo Hokuyo Holdings. The company provides banking services including deposits, loans, foreign currency transactions, trust banking, and securities investments.

THE SHIGA BANK, LTD. is a regional bank mainly operating in Shiga.  The Bank also provides financial services including credit card and leasing as well as data management services.

Hokuhoku Financial Group, Inc. is a holding company, which manages financial operations for its subsidiaries.  As a financial group, the Company provides general banking services including deposits, loans, and foreign exchange transactions.  The Group also provides other financial services such as leasing and credit cards.

Daishi Hokuetsu Financial Group, Inc. provides banking services. The Company offers deposit, loan, settlement, and other services. Daishi Hokuetsu Financial Group provides services in Japan.

Daishi Hokuetsu Financial Group (7327 JP)

The Hyakugo Bank, Ltd. is a regional bank based in Mie.  The Bank provides general banking services including deposits, loans, and foreign exchange transactions.  The Hyakugo Bank also develops computer software and provides financial services such as leasing and credit cards.

Nishi-Nippon Financial Holding Inc. is a holding company established through the merger of The Nishi-Nippon City Bank, Limited, The Bank of Nagasaki, Ltd and Nishi Nippon Shinyo Hosho. The group manages the subsidiary companies and provides variety of financial services.

Tokyo Kiraboshi Financial Group, Inc. operates banks. The Company mainly offers financial services. Tokyo Kiraboshi Financial Group provides services in Japan.

Tokyo Kiraboshi Financial Group (7173 JP)

The Bank of Nagoya, Ltd. is a Nagoya based regional bank.  The Bank provides banking services such as deposits, loans, trust funds, and bond issuance.  The Bank of Nagoya also provides financial services such as leasing and credit cards.

Aozora Bank, Ltd. provides banking services including deposits, savings, loans, foreign exchange transactions, and securities investments. Aozora Bank also provides services such as trust account, resolution and collection, and venture capital.

Bank Danamon Indonesia Tbk PT provides general banking services. The Bank's head office is located in Jakarta with branch offices throughout Indonesia.

Westamerica Bancorporation is the holding company for Westamerica Bank and Bank of Lake County.  The Banks provide a full range of services to individual and corporate customers in northern and central California.  The Company's other subsidiaries finance accounts receivable and inventory lines of credit and term business loans, as well as provides data processing services to the Company.

Thanachart Capital Public Company Limited provides financial services including consumer, corporate and mortgage financing.  Additionally the Company provides securities underwriting and investment advisory services.  Thanachart Capital also provides insurance services through its subsidiaries.

Alliance Bank Malaysia Berhad provides a full range of commercial banking services for retail and institutional customers. The Bank offers savings and current accounts, fixed deposits, investments, loans, insurance, wealth management, phone banking, and business cards. Alliance Bank Malaysia serves customers in Singapore and Malaysia.

PT Bank Tabungan Pensiunan Nasional Tbk. is a financial institution that specializes in funding and lending. The Bank offers accounts in deposits & savings, pension loans, small to medium sized business loans, and other financial products.  Bank Tabungan offers services in bank clearance, payment, collection, transfer, and payroll services.

Bank Tabungan Pensiunan Nasional (BTPN IJ)

The Jammu & Kashmir Bank Limited provides banking services, including CD's, educational loans, housing loans and car loans.  The Bank also provides insurance services through a joint venture with MetLife India Insurance Company. The Group has about 475 branches throughout India.

S&T Bancorp, Inc. is the holding company for S&T Bank and S&T Investment Company, Inc.  S&T Bank is a full service bank providing service to its customers through a network of offices located in Allegheny, Armstrong, Clarion, Indiana, Jefferson, Clearfield, and Westmoreland counties in Pennsylvania.

First Commonwealth Financial Corporation is a bank holding company.  The Company, through its subsidiaries, provides general banking business and offers a range of financial services including traditional retail banking services, such as savings, time deposits, mortgage, consumer installment, and commercial loans.

Bank Ina Perdana PT is headquartered in Indonesia. The Company's line of business includes the operation of national commercial banks.

BIMB Holdings Berhad provides all aspects of Islamic banking services.  Through its subsidiaries, the Company underwrites family and general takaful (Islamic insurance) and provides stock broking and other related services. BIMB Holdings  also has operation in unit trust management, provides training and consultancy  services, and leases fixed assets to related companies.

Suruga Bank Ltd. is a Shizuoka based regional bank mainly operating in the Kanto area (central eastern part of Japan) including Tokyo.  The Bank provides deposits, loans, and foreign exchange transactions.  The Suruga Bank also provides financial services such as leasing, letter of credit, and credit cards services.

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Suruga Bank Ltd (8358 JP)

Potential Domestic Rate Hike Impacts Highlighted in the BoJ’s Latest Financial System Report

The BoJ's FSR focuses on issues like potential domestic rate hikes. Key picks are Resona, Mizuho, and Concordia in big caps, the positive regional...

Victor Galliano

Japanese Banks – Cash Balances and the BoJ’s Negative Interest Rate Policy Exit

Japanese banks' share prices mark time post-BoJ's exit from negative interest rates, due to BoJ'S continued accommodative stance. We highlight...

Victor Galliano

Japanese Regional Banks – Three Key Positive Picks

The rising interest rate outlook in Japan benefits regional banks; our top picks, based on interest rate gearing and other key factors, are Tokyo...

Victor Galliano

Updated TOPIX Big April Basket Flows; More Big Flows and ¥270bn a Side

Earnings releases in tech will start to pick up the next few days, and while the market is open on the 29th then also on the 1st and 2nd, the 5-day...

Travis Lundy

The TOPIX Big April Basket Flows: ¥200bn a Side Including Many Multi-ADV Flows

The TOPIX Big April Basket is ¥200bn a side of flows - FFW changes, PWR cascading deletions, PWR unwinds, share count changes, Liquidity Factor...

Travis Lundy

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52-week Range

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Potential Domestic Rate Hike Impacts Highlighted in the BoJ’s Latest Financial System Report

​The BoJ's FSR focuses on issues like potential domestic rate hikes. Key picks are Resona, Mizuho, and Concordia in big caps, the positive regional...

Victor Galliano

Japanese Banks – Cash Balances and the BoJ’s Negative Interest Rate Policy Exit

​Japanese banks' share prices mark time post-BoJ's exit from negative interest rates, due to BoJ'S continued accommodative stance. We highlight...

Victor Galliano

Japanese Regional Banks – Three Key Positive Picks

The rising interest rate outlook in Japan benefits regional banks; our top picks, based on interest rate gearing and other key factors, are Tokyo...

Victor Galliano

Updated TOPIX Big April Basket Flows; More Big Flows and ¥270bn a Side

Earnings releases in tech will start to pick up the next few days, and while the market is open on the 29th then also on the 1st and 2nd, the 5-day...

Travis Lundy

The TOPIX Big April Basket Flows: ¥200bn a Side Including Many Multi-ADV Flows

The TOPIX Big April Basket is ¥200bn a side of flows - FFW changes, PWR cascading deletions, PWR unwinds, share count changes, Liquidity Factor...

Travis Lundy

The BoJ's FSR focuses on issues like potential domestic rate hikes. Key picks are Resona, Mizuho, and Concordia in big caps, the positive regional...

Japanese banks' share prices mark time post-BoJ's exit from negative interest rates, due to BoJ'S continued accommodative stance. We highlight...