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India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Asia banks
Tales from the buy side
Event
�� We recently marketed our views on Asia banks (inclusive of Japan) through
Europe and the US. We conveyed the following points on the region: 1) our
market preference at the start of the year; 2) capital as an investment theme;
and 3) our positive operational outlook for banks in the region. We received
little pushback to our views, with most investors seemingly in agreement with
our thoughts. The dilemma that many investors appeared to be facing was
how to position themselves in the sector. On the immediate horizon, most
investors we met appear to like Singapore and Korea, while Indonesia and
India were seen less favourably.
Impact
�� For the most part, our preference for Singapore, Korea, Japan and the
Philippines and our more guarded stance on Indonesia, India and Taiwan
seems to resonate well with many investors. Like us, we got the impression
that many investors were less upbeat about the markets that did well last
year, with attention shifting to the cheaper, laggard sectors.
�� We pushed capital as an investment theme. We clarified that the issue on
capital has less to do with solvency in Asia, but rather in the context of growth,
consolidation, capital raising and capital management. We believe investors in
Europe and the US were more attuned to the issue of capital than their Asiabased
counterparts. Capital raising risk was the foremost concern particularly
for Japan and China.
�� We conveyed our sanguine outlook on bank profitability and that we expect
growth in pre provision profit. The operational script will largely remain an
extension of the trends we saw last year, with low provisions remaining a key
driver of profitability. Investors’ operational concerns were largely on margins
and the lending trend, with the discussion often veering to the various risks to
earnings.
Outlook
�� We received little pushback to our views, with most investors seemingly in
agreement with our thoughts. The dilemma that many investors appear to be
facing was how to position themselves in the sector, as they attempt to
balance the expected headwinds on the more immediate horizon with the
more attractive longer term story. The short term factors revolved largely
around valuations, growth, inflation and property. The longer term
considerations included the various appealing structural story, positive
earnings outlook, solid balance sheet and the region’s economic resiliency.
�� In general, our impression was that investor sentiment was consistent with
ours. In the short term, this means being most positive on Singapore and
Korea, and less keen on Indonesia and India. Japan remains largely a trade,
while disenchantment hovers around China. Valuations remain the primary
issue against HK, Thailand, Malaysia, Philippines and Taiwan.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Asia banks
Tales from the buy side
Event
�� We recently marketed our views on Asia banks (inclusive of Japan) through
Europe and the US. We conveyed the following points on the region: 1) our
market preference at the start of the year; 2) capital as an investment theme;
and 3) our positive operational outlook for banks in the region. We received
little pushback to our views, with most investors seemingly in agreement with
our thoughts. The dilemma that many investors appeared to be facing was
how to position themselves in the sector. On the immediate horizon, most
investors we met appear to like Singapore and Korea, while Indonesia and
India were seen less favourably.
Impact
�� For the most part, our preference for Singapore, Korea, Japan and the
Philippines and our more guarded stance on Indonesia, India and Taiwan
seems to resonate well with many investors. Like us, we got the impression
that many investors were less upbeat about the markets that did well last
year, with attention shifting to the cheaper, laggard sectors.
�� We pushed capital as an investment theme. We clarified that the issue on
capital has less to do with solvency in Asia, but rather in the context of growth,
consolidation, capital raising and capital management. We believe investors in
Europe and the US were more attuned to the issue of capital than their Asiabased
counterparts. Capital raising risk was the foremost concern particularly
for Japan and China.
�� We conveyed our sanguine outlook on bank profitability and that we expect
growth in pre provision profit. The operational script will largely remain an
extension of the trends we saw last year, with low provisions remaining a key
driver of profitability. Investors’ operational concerns were largely on margins
and the lending trend, with the discussion often veering to the various risks to
earnings.
Outlook
�� We received little pushback to our views, with most investors seemingly in
agreement with our thoughts. The dilemma that many investors appear to be
facing was how to position themselves in the sector, as they attempt to
balance the expected headwinds on the more immediate horizon with the
more attractive longer term story. The short term factors revolved largely
around valuations, growth, inflation and property. The longer term
considerations included the various appealing structural story, positive
earnings outlook, solid balance sheet and the region’s economic resiliency.
�� In general, our impression was that investor sentiment was consistent with
ours. In the short term, this means being most positive on Singapore and
Korea, and less keen on Indonesia and India. Japan remains largely a trade,
while disenchantment hovers around China. Valuations remain the primary
issue against HK, Thailand, Malaysia, Philippines and Taiwan.
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