
America First is my mantra in bank stock investing The coronavirus crisis is a disaster for most global/regional banks.
US money center banks are the best capitalized, most liquid, most profitable banks in the world - with some amazing dividend yields (Wells Fargo 6.2%) that will not be cut.
European banking encompasses the good (BNP, ABN), the bad (UniCredit/Intesa as La Bella Italia is in lockdown) and the ugly (Deutsche Bank, uninvestible at any price).
Emerging market banks? Mickey Mouse, Minnie Mouse and Donald Duck high finance, so caveat emptor! Bank Profits/ROE will plunge as net interest rate margins contract, default rates rise, house prices sink 10 - 20% and economic growth contracts all over the world.
US money center banks have fallen 30% in the first ten weeks of 2020. Outside the US, I expect declines in bank shares in the range of 50 - 80% from recent peaks as the economic crisis deepens.
NMC Health’s Mickey Mouse governance stiffs investors once again. Now we hear that NMC’s actual debt is $5 billion, not the $2.3 billion reported in its obviously false, audited balance sheet.
How could the board, management, internal/external auditors, company secretary, lawyers, LSE regulators, debt capital markets and commercial lenders be ignorant about $2.7 billion in hidden borrowings? This is beyond accounting fraud – it is abracadabra finance at its most shameful.
NMC Health, like Abraaj Capital, makes a mockery of the Gulf’s admittedly surreal financial ecosystem. Bravo Muddy Waters for exposing the scam.
Matein Khalid is the CIO of Asas Capital Management