This report reviews the June performance of emerging market banks, highlighting the outperformance of Andean and Indian equities alongside a cautious outlook on China due to regulatory tightening. It identifies Kazakhstan’s Kaspi as a preferred buy, noting a potential recovery in fintech margins and dividend resumption.
Key Takeaways
- 1.Andean, Turkish, and Indian banks led performance in June, while China, Qatar, and Kuwait were weak.
- 2.Saudi Arabia banking sector outlook remains positive due to funding normalization and structural ROE.
- 3.Kaspi (Kazakhstan) is the preferred stock, seen as ripe for recovery following HEPS integration and dividend resumption.
Table of Contents
- What worked: Andean banks – Cibest
- What didn’t work: Mainland China / Hong Kong
- What to look forward to: Saudi Banks
- Saudi Banking sector in key charts
- Our stock pick: Kaspi (Kazakhstan)
- Key reports to highlight
- Valuation comparisons – Asia
- Valuation comparisons – EMEA
- Valuation comparisons – LatAm
- Valuation comparisons – LatAm Insurers
- Valuation comparisons – Exchanges
- Valuation and risks
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Authors
Carlos Gomez-Lopez, CFANeha AgarwalaCihan Saraoglu, PhDGary Lam, CFAAybek Islamov, CFA
Securities
KSPICIB
Themes
Cross-border regulatory tightening in AsiaEmerging Market bank performance divergenceSaudi Arabia banking sector funding and profitability
Regions
Asia PacificLatin AmericaMiddle EastPeruColombiaTurkey