Financials

Report by CHA-AM Advisors

David Scott sees global banks as still offering substantial value, with China the standout deep-value opportunity. Chinese banks trade at distressed-looking valuations despite resilient loan growth, profitability and well-covered dividends; David argues they are “too cheap to ignore”, with buybacks also looking increasingly likely given the large discounts to book value. China Merchants Bank is his preferred name given superior fundamentals and a valuation now around peer levels. By contrast, he expects Indian banks such as HDFC and Kotak to continue underperforming as intense competition for deposits, staff and lending compresses margins and efficiency. He remains positive on Banorte (a cheap play on Mexico’s growth) and Lion Finance (which is up another 155% since he last recommended it), while highlighting Commercial International Bank as a new Egyptian idea.

Report by Copley Fund Research

Active GEM funds rebounded strongly in the second quarter of 2026, delivering average year-to-date returns of 24.64% to almost match the iShares MSCI Emerging Markets ETF benchmark. However, this was far from a broad-based rally. South Korean and Taiwanese technology alone contributed 25.8% of first-half returns, with just five stocks accounting for 22% of gains, led by SK Hynix, Samsung Electronics, and TSMC. Main detractors stemmed from China and India, where Tencent, Alibaba, and HDFC Bank generated severe drag. Unlike global peers, active managers managed the technology sector well: strong stock selection within technology more than offset an allocation drag from maintaining an underweight stance. Emerging Markets remains one of the few major asset classes where active management competes over the long term.

Report by Copley Fund Research

The spread between India and China weights in active Asia Ex-Japan funds has narrowed to the lowest levels in Copley’s 13-year history and now stands at 16.17% vs. a peak of 45.3% in Aug 20. China’s decline over this period has been dominated by Consumer Discretionary, Communication Services and Financials. 3 companies standout as key drivers of the move lower: Alibaba, Tencent and Ping An Insurance. Increases in fund weight have been minimal with PDD, BYD and Trip.com seeing moderate upticks. India’s rise has been driven by the Financials sector. Specifically, 3 banks: ICICI Bank, HDFC Bank and Axis Bank.

Financials

This bank's recent underperformance creates an attractive entry point for long-term investors looking to own a high-quality franchise with a best-in-class management team and fantastic capital allocation track record. HDFC has an impeccable underwriting history with the lowest NPAs across major credit cycles in the last 28 years. This is despite growing its loan book by over 2x the industry average. With a long runway for growth ahead, and the stock trading at a 20% discount to its own 5-year average multiples, investors can expect 16%-18% compounded returns from here over the next 5 years. Click here for AlphaBox's 60-page initiation report.

Report by Copley Fund Research

Stephen Holden’s data highlights the growing divide between Value and Aggressive Growth managers in India - while Aggressive Growth investors double down, especially in Financials and Tech, Value managers are finding fewer opportunities to invest, and appear comfortable allowing their underweights to increase. That’s not to say there are no Value opportunities in India, just not enough to match either the benchmark weight, or the weight of their Growth peers. As the world focuses on a potential Growth to Value switch, in EM at least, India will be a key driver of relative performance between the two sets of investors.

Stocks highlighted include HDFC Bank, Housing Development Finance, Indian Oil Corp, Infosys and Tata Consultancy.

Financials

Report by Galliano's Financials Research

1. A shift into value in EM banks; cautious on digital banks - top picks are Sberbank, Banco do Brasil and HDFC Bank. Nubank likely to be one of the EM FinTech big negative surprises of 2022.
2. Southern Europe banks, position for the prospect of higher interest rates - highlights BBVA and Banco BPM.
3. Exchanges, competitive pressures are real, but are they priced in - B3 and Singapore Exchange standout.
4. Growth and value in digital payments - highlights Mastercard and, for its deep value, PagSeguro.
5. Digital wealth managers, picking a potential winner - BTG Pactual.

Financials

Report by Hemindra Hazari

Deafening silence from media and sell-side on HDFC’s ‘processing fee’ scandal - the latest revelations by a whistle blower reveal the shocking fact that India’s most valuable bank allegedly extorted fees from prospective loan customers who submitted false documents. If this practice is found to have been widespread then the RBI must impose stringent penalties. Hemindra Hazari believes that shareholders should review their exposures to the bank in light of these disclosures.

Financials

Report by Galliano's Financials Research

Victor Galliano identifies 3 banks that can weather the expected worsening of credit quality in the coming quarters - he highlights Axis Bank as a restructuring and earnings recovery story and HDFC Bank for its high quality balance sheet and premium returns, which are not yet fully reflected in valuations. Victor also considers State Bank of India as an attractive value play, despite its lighter core capital ratio. Banks to avoid - Canara Bank (value trap) and Bandhan Bank (large micro-finance and SME credit risk exposure).