The Banking and Strategy Initiative

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Banks scoring $7 under par in 2011

According to a current Bloomberg news analysis, the banks promised a over $34 EPS for the Top 6 banks and are delivering $27 worth for 2011.

However 2012 estimates are still higher by 57% or $44 per share EPS from JP Morgan, Goldman Sachs, Bank of America, Morgan Stanley, Wells Fargo and Citibank

Improved trading results, more investment-banking deals, expense-cutting measures and lower credit costs will lead to the increase in earnings that didn’t materialize last year, analysts say. That may provide a boost to stock prices after financials were the worst-performing industry in the U.S. in 2011.

Business week and thus Bloomberg TV continue to assert further that the analysts also missed the US GDP forecast at 3.1% where likely the US will score a healthy but lower 1.8%

Banks prospects have improved with each clearing stress test while European counterparts plan a $95o bln contraction in assets keeping pace with EZ GDP contraction to bring regulatory capital estimates in line with Basel 3 requirementsa s national registers go bankrupt and focus on surviving the wave of Economic contraction with no help from the banks

No Bad news, is probably good news

The year started well for the Top six jumping more than 4% in yesterday’s trading session but while different analysts quoted point to trading prospects, revenues and profits would wel increase from higher advisory business and more stable flows into the asset management business and wealth cross sella sa bottom has likely been found ( or speculated upon ) in the markets and the US markets head north from the tired 1250 mark around which it peaked in the last 5 -6 mini rallies in 2011

 Global stock offerings plunged 29 percent from 2010 and U.S. bond issuance fell 6.7 percent as companies delayed plans to raise capital, according to data compiled by Bloomberg. Fixed-income trading likely dropped 27 percent and equities revenue 3 percent at the 10 biggest investment banks, according to industry consultant Coalition Ltd.

The mortgage markets have been showing good traction thoughthe last two weeks showed up a drop in refinancing that made 83% of the loan deals for banks in 2011 and purchase application in today’s MBA report

China likely to maintain IPO leadership

Though the big board beat Hong kong on liquidity and performance issues for key IPOs towards the end, the market in China may yet be the biggest one around and international brands likely to make a beeline for Asian Financial markets to finance local growth. The new exchanges in Shenzen have also been sharing an almost equal burden of new issuance in 2011 and may provide domestic liquidity in China as Top 6 get a chance to demystify the Asian labyrinth

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This entry was posted on January 4, 2012 by in Amitonomics, Banking, US and tagged , , , , , , , .


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