In today’s briefing:
- Asia Financials: The Fallout from SVB and Silvergate | Where’s the Biggest Asset/Liability Mismatch?
- Good Morning Japan |Contagion Fears Dominate; NUGGET: Effective Activism – TARGET, TIMING, TACTICS
- “Sudden Death” of Silicon Valley Bank (SVB) – The Impact on China Healthcare
- China Oil Sector: A Look from SOE Valuation Enhancement Angle
- Weekly Stock Bullfinder – Week of 3/13
- Pdd/3690.hk/700.hk/1877HK/BGNE：PDD Enters Local Life Services Business
Asia Financials: The Fallout from SVB and Silvergate | Where’s the Biggest Asset/Liability Mismatch?
- The unfolding crisis is unlikely to have far-reaching impacts on Asia financial names, given their more robust deposit franchises and sector diversification.
- That said, the Taiwanese financial holdcos do seem to be substantially more exposed than their peers in other markets owing to the USD fixed-income exposures at their life insurance units.
- In a flight-to-quality scenario, we expect Fubon FHC to outperform the more geared Shin Kong FHC.
Good Morning Japan |Contagion Fears Dominate; NUGGET: Effective Activism – TARGET, TIMING, TACTICS
- OVERSEAS. US stocks hit again on contagion fears as Fed takes control of Silicon Valley Bank; Lots of activity over the weekend to shore up confidence.
- JAPAN. NKY Futs -2.2% vs Cash. USDJPY strengthened to 135. With all activity in the US to shore up confidence, Japan likely bottoms early; Ueda confiremed as BOJ Governor.
- NUGGET. Dainippon Print(7912) – Confluence of Target, Timing and Tactics. A spectacular win for Elliot, Activism in Japan and for Japan
“Sudden Death” of Silicon Valley Bank (SVB) – The Impact on China Healthcare
- SVB has special institutions in China and its business mode is Venture Lending. The closure of SVB could make it harder for Chinese startups to raise money from US investors/banks.
- The scale of SVB is small, but it cannot be said that it has no impact on the fundamentals of China healthcare companies. Investors need to reassess the potential risks.
- SVB’s woes would not be a serious blow to the US if government takes timely action. However, if BRICS currency is established, it would be real fatal for the dollar.
China Oil Sector: A Look from SOE Valuation Enhancement Angle
- The oil majors – CNOOC Ltd (883 HK), China Petroleum & Chemical (386 HK) and PetroChina (857 HK) – are interesting plays on government’s plan to boost capital market valuations.
- Higher dividend payout, privatisation of undervalued subsidiaries, return to A-shares, share buyback and upping stake by major shareholders are just some example of supporting tactics.
- The government may possibly mobilise more offshore funds of SOEs to add stakes. We think ROE expansion and capital market valuations to gain importance in senior management KPIs.
Weekly Stock Bullfinder – Week of 3/13
- After breaking above the bear market trend line resistance area, last week’s banking sector contagion fears, spotlighted by Silicon Valley Bank’s (SVB) collapse, pushed the S&P 500 back below its 200 day moving average on high volume.
- Startup-focused lender SVB Financial Group is the largest US bank failure since 2008 and was the 16th biggest in the U.S. at the end of last year with about $209 billion in assets.
- Silicon Valley Bank’s failure is the largest since Washington Mutual went bust in 2008.
Pdd/3690.hk/700.hk/1877HK/BGNE：PDD Enters Local Life Services Business
- 1877HK/BGNE： Coherus announce FDA inspection of Toripalimab manufacturing facility in China in C2Q23（+）
- 700HK：Honour of Kings (HOK) International Version first launches in Brazil (+);
- PDD/3690HK: PDD begins recruiting merchants for its local life services business (+/-)
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