In today’s briefing:
- Ohayo Japan: US Stocks Slide; Japan X: Gender Diversity and Overboarding A Dual Challenge
- Japan Banks – Accelerating Domestic Credit | JGB Yields Higher | Provisions -79% QoQ & -58% YoY
- Around China Housing In 80 Seconds – Visualizing The 2012-2023 Monthly Data
- US Banks – Snapshots Ahead of 3Q23 Results
- Weekly Sustainable Investing Surveyor – Week Ended September 22, 2023
Ohayo Japan: US Stocks Slide; Japan X: Gender Diversity and Overboarding A Dual Challenge
- OVERSEAS: SPX -1.5%; weak consumer confidence; weak new home sales; and Dimon warning of 7% rates
- JAPAN: NKY futs -1.3% vs cash; JPY 149.1/$. Kao to sell-off brands on cosmetics slump
- JAPAN X: The issue of overboarding in Japan is becoming a big problem, more so given needs to diversify the board
Japan Banks – Accelerating Domestic Credit | JGB Yields Higher | Provisions -79% QoQ & -58% YoY
- What’s new is that Japan’s domestic credit growth is accelerating, and it’s now better than in Singapore, for instance; accelerating to 2.51% YoY in July from 0.77% February low
- Loan growth and higher JGB yields, both matter for net interest income, and margins. Two year JGB yields are 0.035% on 22 September compared with -0.075% on 30 June.
- Profit delta can rise further for Japan’s banks due to better NPLs, with the largest banks’ credit costs/loans moving to 5bps in 1Q24, vs 21bps in 4Q22, 11bps in 1Q23
Around China Housing In 80 Seconds – Visualizing The 2012-2023 Monthly Data
- Through a set of 4 quick animations of city-level data (70 cities), we illuminate the dynamics of new home prices in China over the past 12 years
- This helps put the current (since mid-2021) downturn in context and build intuition about the components of the aggregate declines, including the by-city-tier breakdown
- We point out a number of key data caveats and traps in the interpretation of the data sets
US Banks – Snapshots Ahead of 3Q23 Results
- We focus in on three key issues – unrealized losses on bond holdings, commercial real estate exposure and deposit movements – ahead of US banks’ release of 3Q23 results
- Current US Treasury yields imply further erosion of US banks’ adjusted CET1 ratios; we estimate that accumulated unrealized securities losses accounted for 25% of system total equity to June 2023
- Bank system deposits are declining, but not alarmingly; CRE exposure is a key potential credit risk for the US banks; we like Capital One and we are cautious on Zions
Weekly Sustainable Investing Surveyor – Week Ended September 22, 2023
- The WTR Sustainable Index underperformed the broader market, falling 5.3% W/W versus the S&P 500 Index (down 2.9%), the Russell 2000 Index (down 3.8%), and the Nasdaq Index (down 3.3%).
- Energy Technology (14.6% of the index) contributed to the index’s underperformance, falling 7.5%, while Industrial Climate and Ag Technology (46.5% of the index) was down 2.7%, ClimateTech Mining was down 8.0%, and Advanced Transportation Solutions was down 7.2%.
- Top 10 Performers: CLIR, NHHH, BRDS, NILI, FPX, ATLX, GIGA, ABML, WAVE, LTBR
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