EEMEA Financials: Most/Least
Preferred – July adjustments
�� Adjusting our monthly most/least preferred stock list
In this note we adjust our most/least preferred EEMEA bank stocks list. This
mostly reflects strong recent moves in the Turkish market. The list is consistent
with our fundamental 12-month opinions but intended to appeal to investors with a
shorter-term horizon. The list comprises 8 stocks (4 “most” and 4 “least”
preferred) which we review monthly.
Changes to our list
Having appreciated strongly in the last 2 weeks, we are removing Garanti Bank
from our most preferred list, and replacing it with Yapi Kredi – a similar story, but
one that has somewhat lagged.
For our least preferred list, we are removing Isbank. While fundamentals are poor,
we are conscious of bottom-fishing, and the stock has begun to move sharply. We
are adding BZWBK and Nedbank to the list.
Most preferred EEMEA Financial stocks
Yapi Kredi (Turkey): strong turnaround, addressing some concerns, has lagged
Standard Bank (SA): first class retail (unsecured) exposure, strong corporate
Sberbank (Russia): leading position in fast growing Russian banking, large
exposure to retail and mortgage lending and ample capital to fund growth
Raiffeisen (Regional): unique regional play, well balanced regional earnings mix
Least preferred EEMEA Financial stocks
BZWBK (Poland): strong earnings growth but in the price; risk of higher rates
Komercni banka (Czech): stock has re-rated ahead of earnings outlook
Bank Leumi (Israel): slow growth, special divis ending, inflated on M&A talk
Nedbank (South Africa): premium multiple to other SA banks not justified
The full rationale for our recommendations is contained in the most recent
stand-alone research for each company, which you are advised to read. See
inside this report for a commentary on the list constituents.