Freedom Holding Corp (FRHC)

[HMB2010]

Very interesting - hey, he owns a bank!

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18:38 / 04.26.17 465 views
Buy a bank!
+ T -
Since the end of 2016, the US stock market has grown vigorous pace - S & P500 index from November 4, 2016 to March 1, 2017 added as much as 15%. During the same time in the US financial sector grew almost twice as strong: almost + 30%. Banking stocks have grown only on some promises Trump deregulate the sector and reduce taxes. In addition, the hand of the financiers and increase the Fed's interest rate. Then tell why buy shares of banks is still not too late, and how tall they can be waiting. Now the market correction, which is already close to completion. Signs that a long-term decline is not. Volatility has again at the lows, and hence the demand for a low hedge. In the US market clearly growing appetite for risk - investors are willing to participate in the IPO and buy shares of new companies on the open market. Also at the annual maximum fund of emerging markets (iShares MSCI Emerging Markets (EEM), that is not observed outflow of capital from risky assets. The deregulation of the banking sector is largely due to changes in the Dodd-Frank law. He was admitted to the United States after the 2008 crisis, to give the stability of the financial system. The law including includes the "Volcker rule," which does not allow banks to use the money clients in the commission on the stock exchange transactions. This may reduce the risks for the economy, but also reduced the profitability of banks. D I change the law require the approval of Congress. There is another amendment on the minimum capital of banks, a change which by Congress is independent. It sets the Fed and the Trump can convince the regulator to reduce this requirement. Reduction of minimum capital would increase earnings per share (EPS) of banks by about 5 %, because then the banks will receive more free money supply to complete transactions. also, in January 2018 will come into force changes to the calculations of the bank debt burden called "progressive" approach. When calculating the debt burden, this method would include assets such as US Treasuries and the Fed deposits. Changes in the structure of banks' assets will not happen, however, the efficiency of banks of their capital will increase significantly. I estimate the real effect will be seen in the first quarter of 2018, it will be to increase EPS by approximately 10% .On favor of banks, including the growing trend in the Fed rate. Macroeconomic indicators contribute to this, and the Fed is planning to increase the rate twice more this year. We are waiting for it to happen in the second half of the year, most likely in September and December. Due to the above amendments to the greatest benefit of the investment industry giants - Goldman Sachs, Morgan Stanley, JP Morgan and Citibank. The rate increase will increase profits primarily to banks that are engaged in consumer crediting. Leaders here, of course, Bank of America and Wells Fargo. For example, a recent report from the Bank of America became aware of the increase in revenue to $ 24.90 billion, up 13% compared to the same quarter last year. Structural changes, such as the rate increase will affect the share price in the long run. If Trump is selling all the planned reforms, it is safe to expect an increase of 20% of the banking sector and higher after that happens.



Tags: the IPO , of Goldman Sachs , US stock market , Bank of America , at Wells ONLY Fargo , Morgan Stanley , of JP Morgan , Freedom Finance

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