Tokyo stocks edged higher on Monday as signs of a slowdown in coronavirus infections raised optimism that Japan would soon ease restrictions in additional prefectures, although escalating Sino-U.S. trade tensions kept investors wary. The daily number of new coronavirus cases reported in Tokyo dropped to five on Sunday, the lowest since the capital was placed under a state of emergency on April 7. Japan lifted a state of emergency in large parts of the country on Thursday but said it would remain in place in Tokyo until the novel coronavirus was contained.

Russell 2000 ETF (IWM) lagged the larger S&P 500 ETF (SPY) by more than 10 percentage points since the end of the third quarter of 2018 as investors first worried over the possible ramifications of rising interest rates and the escalation of the trade war with China. The hedge funds and institutional investors we track […]

SMFG vs. BBVA: Which Stock Is the Better Value Option?

Last year's fourth quarter was a rough one for investors and many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 4.8% during 2018 and average hedge fund losing about 1%. The Russell 2000, composed of smaller companies, performed even worse, trailing […]

SMFG vs. BBVA: Which Stock Is the Better Value Option?

Japanese stocks advanced in line with their Wall Street and Asian peers and hit a two-and-a-half-month high on Tuesday, as encouraging early-stage data for a potential coronavirus vaccine boosted hopes for a swift reopening of the global economy. Data from Moderna Inc's COVID-19 vaccine, the first to be tested in the United States, showed it produced protective antibodies in a small group of healthy volunteers, the company said on Monday. MSCI's broadest index of Asia-Pacific shares outside Japan last traded up 1.6% in late Asian trade.

(Bloomberg) -- Japan Post Bank Co. plunged by a record in Tokyo on Monday after it forecast profit that missed analysts’ expectations, failed to give guidance on dividend payments, and booked paper losses on some investments.The shares dropped as much as 15%, the biggest intraday decline since the company was listed in 2015 as part of a privatization process. The postal bank expects net income will fall about 27% to 200 billion yen ($1.9 billion) in the year ending March 2021, it said Friday. Shares of the parent company also fell, sliding as much as 10%.“This is a negative surprise,” Masahiko Sato, an analyst at SMBC Nikko Securities Inc., wrote in a note to clients. He said most market participants had expected profit would be around 280 billion yen this year, which is line with the bank’s own midterm target.The outlook for lower profit is likely to raise concerns about whether the bank can keep its dividend payment, said Rie Nishihara, an analyst at JPMorgan Chase & Co. “Even if the bank can achieve the net profit guidance, the payout ratio will rise to around 95% from 68.5% last year,” she said.Read more on Japan Post Bank’s CLO plans after paper lossPaper losses on the bank’s securities portfolio were also a concern, according to Nishihara. Japan Post Bank, the nation’s biggest holder of domestic savings, has been increasing investments abroad to make up for rock-bottom interest rates at home, making it more vulnerable to global financial-market moves.The company reported 121.9 billion yen in unrealized losses on overseas collateralized loan obligations last quarter amid the coronavirus-fueled market turmoil. Still, it will keep adding to its CLO holdings, Senior Managing Executive Officer Hiroichi Shishimi said.(Updates with comments from analysts in the third and fourth paragraphs.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Moody's Japan K.K. has today assigned Counterparty Risk Ratings (CRRs) to 28 rated Japanese banks and branches. Please click on this link https://www.moodys.com/viewresearchdoc.aspx?docid=PBC_ARFTL423269 for the List of Affected Credit Ratings.

Tesla makes the list Continue reading...

(Bloomberg) -- Japan’s top banks forecast the biggest bad-loan costs since the aftermath of the global financial crisis, joining other global lenders in bracing for the fallout from the coronavirus pandemic.Total credit costs at Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. will almost double to 1.1 trillion yen ($10.3 billion) in the year ending March 2021, the most in 11 years, the Tokyo-based lenders forecast Friday. They expect combined net income of 1.3 trillion yen, the lowest since the year ended March 2010.“Credit costs are the biggest concern,” Mizuho Chief Executive Officer Tatsufumi Sakai told reporters in a teleconference.Banks worldwide are setting aside billions of dollars to prepare for a wave of defaults as the coronavirus triggers potentially the worst global recession since the Great Depression. Interest-rate cuts around the world are compounding the misery for Japanese banks, which have been expanding loans abroad to make up for negative rates at home.For years, the nation’s lenders have relied on low credit costs to prop up earnings as rock-bottom rates erode lending profitability. They have also been booking gains from sales of shares held in corporate clients -- something that’s becoming tougher after equity markets plunged this year. Shares of the three banks themselves have tumbled at least 29% this year to trade at about a third of their book values.“I expect megabank stock prices to remain under downward pressure,” said Toyoki Sameshima, an analyst at SBI Securities Co. “It’s just impossible to determine whether their credit costs and other estimates are realistic or conservative, given how uncertain the outlook is in this unprecedented economic slowdown.”MUFG, Japan’s biggest bank, expects profit to climb about 4% this year, mainly because it booked massive writedowns on its Southeast Asian units last fiscal year. Mizuho forecasts a 29% drop, while Sumitomo Mitsui sees its earnings sliding 43%. All projections are lower than analysts’ estimates.The bleak outlook is increasing the impetus for cost cutting. Sumitomo Mitsui released a midterm business plan that involves reducing its headcount by 6,000 over the next three years through natural attrition, CEO Jun Ohta said. The bank has about 100,000 employees worldwide.At the same time, Ohta said his bank will persist with its strategy of expanding abroad and is seeking acquisition opportunities.MUFG will accelerate efforts to digitalize its operations as the coronavirus changes customer behavior, CEO Hironori Kamezawa said. Bright SignsOne bright sign for investors is the lenders all pledged to maintain dividend payments in the current fiscal year. That confirmed analysts’ expectations even after some overseas rivals were forced to curb or withhold payouts at the behest of regulators.Another is the prospect of Japan reopening parts of its economy as new virus cases decline. The government is lifting a state of emergency in most prefectures earlier than scheduled and will evaluate next week whether do the same in major cities including Tokyo, where nine new infections were found on Friday, according to broadcaster NTV.Sakai said Mizuho’s projections were based on the assumption that the economy will bottom out by the end of the next quarter. Similarly, MUFG’s forecast was based on a slow U-shaped recovery beginning in the July-September period.“To be honest, we don’t know whether credit costs are enough or not,” given the breadth of the Covid-19 crisis, Ohta said. “We would like to respond flexibly by watching the situation.”Data next week is likely to confirm that Japan is in a deep recession, with analysts estimating the economy shrank an annualized 4.5% in the first three months of the year. Gross domestic product is expected to plunge 21.5% in the current quarter.The banks are seeing strong loan demand, as businesses scramble to secure funding to weather the economic storm. Loans at major lenders grew the most since 2009 in April, Bank of Japan figures showed this week.That may not be sustained because companies will have little incentive to spend during the slump.“In the very short term, large corporates do have liquidity needs,” said Michael Makdad, an analyst at Morningstar Inc. in Tokyo. “You get a short-term boost, but after that things slow down.”(Updates with MUFG CEO comment in the 10th paragraph. An earlier version was corrected to remove an erroneous reference to Sumitomo Mitsui increasing this year’s dividend)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

(Bloomberg) -- Sumitomo Mitsui Financial Group Inc. plans to persist with its overseas expansion by boosting headcount and seeking acquisitions even as the coronavirus clouds the profit outlook for Japan’s second-largest bank.The lender aims to add 500 staff overseas over the next three years, while reducing domestic headcount by 6,500 during the same period, a senior bank official said. It’s looking for opportunities to buy boutique mergers advisory firms in developed markets, the official said, asking not to be identified due to internal policy.Chief Executive Officer Jun Ohta has signaled a willingness to seize growth opportunities outside of Japan even as Covid-19 hammers the global economy and causes bad-loan costs to swell. That’s in contrast with some lenders elsewhere in the world that are retreating to their home markets to serve struggling companies.Read how global banks are turning inward during the pandemicThe overseas expansion is part of a midterm plan announced last week. Much of the staff increase will be in Asia, where it plans to expand business in countries including India, the official said. Other additions will be in compliance and risk management in the U.S. and Europe.It’s also seeking to add traders in London and New York, the person said. The bank’s sales and trading business in London and New York remains small and it needs to increase staff in rates and other areas, the official said, adding that it will consider expanding trading in bonds that are below investment grade.Sumitomo Mitsui is interested in buying a U.S. regional bank, although an acquisition is unlikely to happen in the near future because of regulatory hurdles and the need for a large war chest to complete the deal, the official said.The Tokyo-based bank last week forecast a 43% drop in profit this fiscal year as it expects credit costs to jump to the highest since the global financial crisis.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of SMBC Nikko Securities Inc. Tokyo, November 06, 2019 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of SMBC Nikko Securities Inc. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers.

Coronavirus is probably the 1 concern in investors' minds right now. It should be. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW. We predicted that a US recession is imminent and US stocks will go down by at least 20% in the next 3-6 […]

SoftBank Group Corp's talks to secure $3 billion from Japan's three biggest banks have stalled as the lenders have hit internal lending limits to the firm, two people said, complicating a $9.5 billion rescue package for WeWork. The Japanese technology conglomerate is now likely to enter the new year without the WeWork financing in place, the people said, adding the banks are also concerned about the risks involved in rescuing the U.S. office-sharing startup. Mizuho Financial Group Inc, Mitsubishi UFJ Financial Group Inc (MUFG) and Sumitomo Mitsui Financial Group Inc (SMFG) are seeking ways to provide the financing while offsetting exposure, the people said, declining to be identified because the information is not public.

Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of Sumitomo Mitsui Financial Group, Inc. Tokyo, December 03, 2019 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Sumitomo Mitsui Financial Group, Inc. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers.

Let's see if Sumitomo Mitsui (SMFG) stock is a good choice for value-oriented investors right now from multiple angles.

Let's see if Sumitomo Mitsui (SMFG) stock is a good choice for value-oriented investors right now from multiple angles.

Mitsubishi UFJ Financial Group Inc (MUFG), Japan's largest lender by assets, forecast on Friday a full year profit that fell short of analysts' expectations on coronavirus-related credit costs. MUFG, which owns 24% of Wall Street investment bank Morgan Stanley, expects 550 billion yen ($5.14 billion) in net income for the year ending in March 2021, compared with an average 762.6 billion forecast of 12 analysts polled by Refinitiv. Annual net profit for the year that ended in March was 528.2 billion yen, compared with analysts' estimate of 668.3 billion.

Successful investors are always balancing risk and reward depending on their own personal risk tolerance. One common metric used to gauge risk is price-to-book ratio, or P/B. A company’s book value is ...

Japanese shares rose on Monday as signs of a slowdown in coronavirus infections raised optimism that the government would soon ease restrictions in additional prefectures, although escalating U.S.-China trade tensions kept investors wary. The daily number of new coronavirus cases reported in Tokyo dropped to five on Sunday, the lowest since the capital was placed under a state of emergency on April 7. Japan lifted a state of emergency in large parts of the country on Thursday but said it would remain in place in Tokyo until the novel coronavirus was contained.