Category Archives: Companies

Disaster Zone Credit Suisse Strategic Resolution Unit – the Banks Trashcan

Credit Suisse speaks of core results and then separately of the revenues and expenses from the Strategic Resolution Unit (SRU). But they seem to use this wind-down unit for moving regular occuring problem loans and non-performing loans that were reported in other core units in previous quarters. (see graphs from the quartely reports near the bottom of this post, where movements are documented in the footnotes of the financial statements.)

It’s very interesting to see that this units losses eclipse all profits quarter by quarter. Not surprising if all the good business is in the core results and all the bad business is moved to the Strategic Resolution Unit. “The Strategic Resolution Unit consolidates the remaining portfolios from the former non-strategic units plus additional businesses and positions that do not fit with our strategic direction. ”

If they were loosing money with this unit in stable Q4 15 and somewhat less stable Q1 16 what will have happened in more volatile Q2? There seems to be a high likelihood that whatever problems arise, they will find their way to the SRU.

Also note: This problem bank within Credit Suisse Group employes close to 1500  people! Corporate center, that manages about the same amount of assets has 350 employees.

credit-suisse-strategic-resolution-unit

strategic-resolution-unit strategic-resolution-unit_0 strategic-resolution-unit_2 strategic-resolution-unit_3 strategic-resolution-unit_4 strategic-resolution-unit_5 strategic-resolution-unit_6 strategic-resolution-unit_7 strategic-resolution-unit_8 strategic-resolution-unit_9 strategic-resolution-unit_10

Bank CDS in Focus – Credit Suisse and UBS Credit Default Swaps Post-Brexit

Sometimes a good graph saves a lot of words. That’s why I’m posting these. Normally I’m no fan of CNBC, as they overdramatize to keep viewers and sell advertising. But I really liked their graphs!image1

I just can’t imagine the moves in RBS, Barclays and Lloyds are justified.image2

image3

Interesting about this one; GS has held up better than Morgan Stanley and BofA. So this isn’t about revenue from europe for US Banks. For the stock market it would be more pertinent to show leverage ratios or CET capital ratios of the banks versus the drop. I know I would be looking at the capital cushion when deciding whether to take aim at a bank.image4

Important addition:

CDS on June 27th (according to my source)

Credit Suisse Group
1Y = 111
5Y = 170
10Y = 202

UBS
1Y = 43
5Y = 82
10 Y = 121

Shows you that Credit suisse is double as dangerous as UBS. Or UBS is seen as really safe.

This one was aired later:

euro-stoxx-banks-brexit-bottom-or-beginning

Makes me think we’re at or near the bottom!!!

Goldbach Media (GBMN) – Golden Cross – 50-200SMA Crossover – Technical Breakout Setup

The shares of Goldbach Media (GBMN) look like they are setting up to breakout of their sideways path.

Heavy volume and large off market transactions have occured in the last 2 weeks.

The 50 (Single Moving Average = SMA; PURPLE) and the 200 (SMA; LIGHT GREEN) are close to crossing. When the 50 crosses above the 200, it’s called a “golden cross.” Generally, a buy signal is established when the shorter-term 50-day SMA crosses above the 200-day SMA. Keep in mind, that the 50-day, 200-day Simple Moving Average crossover is a very long-term strategy. (But the grain of salt to this analysis is in this article: Does the Golden Cross really work)

goldbach-media-chart-50dma-200dma-crossover-2015-gbmn-3 goldbach-media-chart-50dma-200dma-crossover-2015-gbmn-2 goldbach-media-chart-50dma-200dma-crossover-2015-gbmn

Short Interest in Transocean (Symbol/Ticker RIGN RIG)

One of the reasons Transocean is so volatile:

Short Interest; currently over 10 days would be needed to cover the short interest in Transocean. transocean-rign-rig-short-interest-2015-2014

 

transocean-3-year-stock-chart-2014-2015

Another reason Transocean shares are so volatile:

Oil Price

crude-oil-3-year-chart-2012-2015

This makes Transocean an interesting candidate for an investor looking for exposure to the oil price and a change in sentiment (based for example on Transoceans financing becoming more solid, capital increases out the way etc).

6month Chart indicates a leveling off of selling pressure:

transocean-6month-chart-2014-2015

 

Züblin Immobilien (ZUBN) – A play on ECB QE for 2015-2016

Züblin Immoblien has a large part of its property portfolio in France, Holland and Germany (next to Switzerland).

As the company has announced it wants to sell the commercial properties in France, which are in somewhat of a slump, it can be expected that ECB QE will lead to more liquidity and therefor a higher probability of being able to sell the properties.

As it’s currently not clear where the NAV of Züblin stands (last publicly available data was around 1.70-1.80 in October 2014), but the portfolio was valued then, and since further pressure on prices in France should have subdued, it could be an interesting play – at these depressed levels around CHF 1.10 – to bounce, to move back to its NAV.

Last data available from INSEE show that the property market in January ’15 was already on the mend. The last news in 2014 regarding the commercial office rental market around Paris had been negative.

There’s also a trend of property developers to buy unused commercial rent properies and turn them into appartements or hotels. This has been rising according to this report by keops.fr (page 7). Also the same report shows that asset mangers and funds have been becoming more active with purchases.

***

March 24th Update:

“ECB President Mario Draghi says he’s already seen the benefits from the QE program, with borrowing costs for businesses and households coming down and new investment projects becoming more attractive. Purchasing managers index for the eurozone for March out on Tuesday also confirmed that the dark clouds are evaporating from the region.” source marketwatch.com

Swiss Winners of the SNB Decision January 15th; Phoenix Mecano

If you’re interested in which companies are not suffering as a result of the SNB decision, here’s one:

Phoenix Mecano has lost just 1% as of today (Jan 20th) vs the SMI drop of ~12% (figure 1). If you were to just look at figure 2, showing Phoenix Mecano revenue by country, and knowing the company is Switzerland based, you would assume that they were going to suffer due to the fact that such a huge part of revenue is in Germany. But, as can be seen from figure 3 with the employee location, just a fraction of their employees are located in Switzerland. Many are in Germany, Middle East / Far East, Rest of World. So this is one company that will not suffer from costs rising in Switzerland on a relative comparison.

Figure 1: Phoenix Mecano vs SMI pricesmi-vs-phoenix-mecano-snb-decision-chart-graph

Figure 2: Gross sales by regionphoenix-mecano-gross-sales-by-region-graph-chart-2013

Figure 3: Employees by regionphoenix-mecano-employees-by-region-2013

Swissquote Website At Maximum (or Overloaded) since EURCHF Cap-Drop Decision by SNB

I also noticed this first hand in the last two days:

While other media sites were coping well with high visitor flows, the Swissquote website was extremley slow or not spitting out quotes. At some points going into time-out mode.

Today the proof their system was maxed-out and not ready for such a surge in information demand:

swissquote-system-optimisation

The disturbing thing in Switzerland is, there’s not really any other site that is so user-friendly. From an customer/prospect point of view the information product Swissquote has to offer with regard to clarity, speed, overview, order book depth, volume and most active information has been unmatched in the last 10 years (with exception of Bloomberg, Reuters and the like terminals of course).

Even though sites like SIX Swiss Exchange spent a fortune on creating a new website a few years back, the user-friendliness just isn’t there. It’s not made for traders, nor for casual investors who want to quickly check the market volume, most active, read news.

Hell, some banks still show you there previous days closing price when you ENTER AN ORDER. Totally unbelievable. It should be minimum standard to show an order book to anyone entering an equity order. Everyone always talking about high standards and expertise in Switzerland really needs to get a grip with the fact that the take-up of technology is slow in most banks when it comes to trading. I still have to call in to place an SMI-future order for one client with one bank. Pre-2000 style.

Kuoni – Reasons to be Bullish?

Todays FAZ carried an article about the renaissance of travel agents.

renaissance_der_reisebüros_kuoni_2

renaissance_der_reisebüros_kuoni

In a seperate news article Hotelplan has announced it is in the black for the first time in 5 years.

Here’s a 5 year chart of Kuoni (KUNN SW): Important areas; CHF 210-220 / CHF 250 / CHF 300. We’re currently a few percentage points below the CHF 300 level. The green line depics the performance of the SMI.

kuoni-5year-stock-equity-chart_2009-2014