Banks

Highlights Analysis on Indonesia is available below. EM financial markets have diverged from the global growth indicators they have historically correlated with. This raises doubts about the sustainability of this rally. In China, broad bank credit has not accelerated at all, while non-bank…

Highlights European Growth: Europe’s economy is slowing, while core inflation remains subdued. The ECB must now contemplate the need for a monetary policy ease so soon after ending its bond buying program. Likely ECB Options: The ECB will likely have no choice but to initiate a new round of…

Highlights In their current form and size, perpetual bonds issuance and the central bank bills swap program are unlikely game-changers for the banking system in China. However, this mechanism constitutes monetization of banks’ capital and bad assets, i.e., recapitalization of banks, by the…

Regional Consolidation Should Help Propel Bank Stocks…

Highlights Portfolio Strategy Vibrant and broad-based bank credit growth, pristine credit quality, pent up bank buyback demand and a V-shaped recovery in bank ROE more than offset the risk of 10/2 yield curve inversion, and suggest that the path of least resistance is higher for the S&P…

Highlights All of our recent investment recommendations have performed very strongly but have further to go: 1.   Own a combination of European banks plus U.S. T-bonds. 2.   Overweight EM versus DM. 3.   Overweight European versus U.S. equities. 4.  …

This is the second of a two-part Special Report on the structural changes that have occurred as a result of the Great Recession and financial crisis. We look at three issues: asset correlation, the safety of the financial system, and the level of global debt. First, correlations among financial…

Dear Client, I have been on the road visiting clients in St. Louis, Minneapolis, and Chicago this week. Instead of our regular Weekly Report, we are sending you a Special Report on European bank stocks written by my colleague Xiaoli Tang from our Global Asset Allocation service. In advance of the…

Highlights On the bright side, Malaysia’s structural backdrop is improving notably, especially in the semiconductors segment. Yet the cyclical growth outlook remains downbeat. While we are maintaining a market-weight allocation to Malaysian equities within an EM equity portfolio, we are…