Stock economic – Jamiron http://jamiron.net/ Fri, 30 Sep 2022 07:38:26 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://jamiron.net/wp-content/uploads/2021/10/icon-20-120x120.png Stock economic – Jamiron http://jamiron.net/ 32 32 Stocks end tough quarter amid economic fears https://jamiron.net/stocks-end-tough-quarter-amid-economic-fears/ Fri, 30 Sep 2022 07:17:00 +0000 https://jamiron.net/stocks-end-tough-quarter-amid-economic-fears/ LONDON — European markets rose on Friday, gaining some breathing room after a torrid week as the third quarter drew to a close. The pan-European Stoxx 600 added 0.8% in early trade, with oil and gas stocks climbing 1.9% to lead the gains as most sectors and major exchanges moved into positive territory. Household goods […]]]>

LONDON — European markets rose on Friday, gaining some breathing room after a torrid week as the third quarter drew to a close.

The pan-European Stoxx 600 added 0.8% in early trade, with oil and gas stocks climbing 1.9% to lead the gains as most sectors and major exchanges moved into positive territory. Household goods fell 0.3%.

Global equities have continued to struggle in recent sessions on fears of slowing growth and aggressive monetary policy tightening.

The widespread selling on Wall Street continued on Thursday, with all three major averages falling sharply as investors weighed the prospects for future U.S. Federal Reserve rate hike decisions and their impact on markets. The S&P 500 hit a new low for the year. Equity futures were mixed in early trade ahead of Friday’s trade.

Shares in Asia-Pacific also fell on Friday after the overnight plunge in the United States, although new data showed Chinese factory activity unexpectedly increased in August.

On Friday, European investors will focus on initial eurozone inflation figures for September, due at 10am London time, with economists expecting annual consumer prices to have risen by one new record of 9.7%.

Volatility persists in UK markets after the Bank of England intervened in the bond market on Wednesday to shore up the country’s financial stability, following a historic long-term gilt selloff. The pound also hit an all-time low on Monday following widely condemned fiscal policy announcements from the new government, but has staged a significant rally in recent days.

In the US, several Fed officials are scheduled to speak on Friday afternoon, and markets will be watching closely for indications as to the pace of future central bank rate hikes.

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meloni: Elections in Italy: Who is Giorgia Meloni? Read to know https://jamiron.net/meloni-elections-in-italy-who-is-giorgia-meloni-read-to-know/ Mon, 26 Sep 2022 14:34:00 +0000 https://jamiron.net/meloni-elections-in-italy-who-is-giorgia-meloni-read-to-know/ The leader of the Brothers of Italy party, Giorgia Meloni, said she had an unbroken relationship with history while adding in an interview that former fascist leader Benito Mussolini had a rather complex personality. The political career of Giorgia Meloni At the age of 15, Meloni joined the youth wing of the neo-fascist Italian Social […]]]>
The leader of the Brothers of Italy party, Giorgia Meloni, said she had an unbroken relationship with history while adding in an interview that former fascist leader Benito Mussolini had a rather complex personality.

The political career of Giorgia Meloni

At the age of 15, Meloni joined the youth wing of the neo-fascist Italian Social Movement party to take a stand against terrorism in Italy at that time.

Meloni founded the Brothers of Italy and has led the party since 2014. Meloni is also embarking on an election campaign with the slogan “Italy and the Italian people first!”

Giorgia Meloni took over the presidency of the European Conservatives and Reformists party in 2020.

Since entering politics, Meloni has spent her entire career as an MP and party official.

Drones and helicopters search for missing after glacier collapse in Italy

Research assignments on

Helicopter crews and drones were searching for around 15 people missing in the Italian Alps on Monday after part of a mountain glacier collapsed.

Giorgia Meloni and her vague views of the past

Meloni has yet to distance herself from fascism and even wrote in her autobiography that she is well aware that she is navigating a political minefield.

She further wrote that we are children of history and we have come a more complex and convoluted path than others want to know.

Meloni rejects the common cult to fascism. However, whenever she holds a press conference at the party headquarters, a fascist can be clearly seen.

FAQs

  1. What is the fascist symbol always seen in Giorgia Meloni’s press conference at party headquarters?
    The fascist symbol is the logo of the Brothers of Italy, which is a flame in the colors green, white and red. The national colors of Italy are green, white and red. This flame burns symbolically on the tomb of Mussolini.
  2. What did Giorgia Meloni do during the last election campaign?
    The politician plans to move the party to the centre-right. Currently, Giorgia Meloni plans to overhaul the party to appeal to the middle class. Last fall, Meloni sent numerous group memos to the party asking them to stop making any references to fascism and even asking them to stop making extreme comments.

Disclaimer Statement: This content is written by an external agency. The views expressed herein are those of the respective authors/entities and do not represent the views of Economic Times (ET). ET does not guarantee, vouch for or endorse any of its content and is not responsible for it in any way. Please take all necessary steps to ensure that the information and content provided is correct, updated and verified. ET hereby disclaims all warranties, express or implied, with respect to the report and its contents.

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Vietnam’s economic growth relies on high-tech FDI | Company https://jamiron.net/vietnams-economic-growth-relies-on-high-tech-fdi-company/ Sat, 24 Sep 2022 02:54:00 +0000 https://jamiron.net/vietnams-economic-growth-relies-on-high-tech-fdi-company/ Illustrative photo (Source: VNA) Hanoi (VNA) – Vietnam’s economic growth accelerated in 2022, with experts seeing foreign investment in high-tech as a driving force. The World Bank (WB), International Monetary Fund (IMF) and others have sharply upgraded their GDP growth forecasts for the country, with a growing number of economists now expecting it to exceed […]]]>

Illustrative photo (Source: VNA)

Hanoi (VNA) – Vietnam’s economic growth accelerated in 2022, with experts seeing foreign investment in high-tech as a driving force.

The World Bank (WB), International Monetary Fund (IMF) and others have sharply upgraded their GDP growth forecasts for the country, with a growing number of economists now expecting it to exceed 8% this year.

Foreign investment in high technology will continue to propel Vietnam’s economic growth for years to come, said Michael Kokalarichief economist at investment funds VinaCapitalsaid.

In a note, Kokalari said, citing recently published research by economists at Harvard University, that one of the reasons Vietnam is an economic exception is that FDI supports the country’s manufacturing while driving a increasing complexity of products made in Vietnam.

According to the economist, an increase in the complexity of the products that a country is able to produce is the most powerful engine of growth for the economy of a developing country.

“Recent announcements from Samsung, Apple and others make us confident that high-tech foreign investment will continue to propel Vietnam’s economic growth for years to come,” he said.

Samsung, Vietnam’s largest foreign investor, has announced that it will start producing semiconductor parts in the country.

Apple has announced that it will start producing Watches and MacBooks in Vietnam, the first time they will be made outside of China.

Vietnam's economic growth relies on high-tech FDI hinh anh 2Illustrative image (Source: Nikkei Asia)

Apple has “big plans for Vietnam” according to insiders, who also noted that the Apple Watch is particularly complicated to manufacture due to the challenge of squeezing so many components into such a small package.

According to research by the London School of Economics and the World Bank, FDI helps “developing economies move into higher value-added segments of the value chain”, and high-tech FDI has had a significant positive impact on the Vietnamese economy.

In addition, Vietnam has made the biggest jump in Harvard’s Economic Complexity Index rankings in the past two decades, in part because investments from Samsung and Intel have attracted a wave of other investments. tech companies from Apple, LG Electronics, Dell and a number of Japanese companies.

According to Kokalari, the main motivations for companies to set up high-tech factories in Vietnam are a highly skilled, low-wage workforce and the country’s geographic proximity to high-tech supply chains in Asia.

Economists said high-tech FDI boosts Vietnam’s GDP in two ways: by raising incomes and improving the country’s ability to produce complex products.

The former supports short-term GDP growth as domestic consumption accounts for two-thirds of Vietnam’s GDP, while the latter bolsters the country’s long-term economic prospects.

The net result is that the production of smartphones, home electronics, and other products of a relatively high degree of complexity ultimately contributed more than $1,000 of Vietnam’s $3,000 GDP per capita in 2020. .

The revenues and profits of most companies listed on Vietnamese stock exchanges are mainly directly or indirectly related to domestic consumption.

This gives active equity managers plenty of opportunities to outperform the benchmark VN index by pricing in the stock prices of companies that stand to benefit most from their exposure to rising consumer spending by Vietnam’s emerging middle class. which ultimately results from the increase in high-tech FDI. entries.

Kokalari said, “Foreign factories in Vietnam still import most of the production components/inputs they need to make the products they export, especially high-tech products like consumer electronics and smartphones.

“We expect the imported content of Vietnamese exports to fall and the contribution of local content to skyrocket as local companies develop their capacity to supply foreign companies with production inputs in the coming years.

“Secondly, the nascent wave of FDI in the production of some of the most complex products ever made in Vietnam is expected to lead to more ‘ripple effects’ that will lead local manufacturers to diversify into higher value-added segments. of the value chain.”

Apple and Samsung’s plans to produce some of the most technologically advanced products ever made in Vietnam would significantly boost Vietnam’s GDP growth in the coming years and ensure that the economic “decoupling” that Vietnam has achieved this year could be maintained in 2023.

“Our daily interactions with a wide range of Vietnamese companies – from large-cap listed companies to ultra-savvy small tech entrepreneurs – continually make us appreciate the strong parallels between Vietnam’s economy in the 2020s and Japan’s in the 2020s. the 1970s, when this country began its decades-long climb up the global value chain.

“We remain extremely optimistic about Vietnam’s economic outlook and, by extension, the outlook for much higher stock prices in the years to come.”/.

ANV

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Fed: Dollar Dominates, Stocks Shrink as Fed Rises Higher https://jamiron.net/fed-dollar-dominates-stocks-shrink-as-fed-rises-higher/ Thu, 22 Sep 2022 02:24:00 +0000 https://jamiron.net/fed-dollar-dominates-stocks-shrink-as-fed-rises-higher/ The dollar hit a new two-decade high and Asian stocks hit a two-year low on Thursday as the prospect of a bigger and faster-than-expected U.S. interest rate hike spooked investors. The Federal Reserve raised its benchmark rate by 75 basis points on Wednesday, the third consecutive such hike, and officials expect rates to hit 4.4% […]]]>
The dollar hit a new two-decade high and Asian stocks hit a two-year low on Thursday as the prospect of a bigger and faster-than-expected U.S. interest rate hike spooked investors.

The Federal Reserve raised its benchmark rate by 75 basis points on Wednesday, the third consecutive such hike, and officials expect rates to hit 4.4% this year – more than markets had expected before the meeting. and 100 basis points higher than the Fed forecast three months ago.

The dollar rose, short-term bonds sold off and Wall Street fell overnight, with moves extending into the Asian session.

The euro fell to a 20-year low of $0.9807 amid growing concerns over an escalation of war in Ukraine after Russia mobilized reservists for the first time since World War II.

The dollar index, which is up 2% this week and nearly 17% this year, rose 0.2% to a new 20-year high at 111.72. Gold fell 1%. S&P 500 futures fell 0.8% and European futures fell 2%.

The British pound hit its lowest level in 37 years and the Australian, Kiwi, Canadian and Singaporean dollars hit their lowest level in two years. The Chinese yuan hit a two-year low and the yen hovered near a 24-year low as investors awaited a Bank of Japan meeting.

MSCI’s broadest index of Asia-Pacific stocks outside Japan fell 1.4% to its lowest level since May 2020. The Japanese Nikkei fell 1% to a two-month low.

“The Fed is not going to stop any time soon and there is going to be an extended period of tight monetary policy for at least the next year,” said Sally Auld, chief investment officer at wealth manager JB Were in Sydney. .

“What else are you buying besides the US dollar right now?” she added, citing clouds of growth in Europe, Britain and China and a weak yen as Japan keeps interest rates low.

The U.S. yield curve deepened its inversion as short-term Treasuries sold off and the longer-term rallied as investors assessed the possibility of a “soft” economic landing and braced for damage to the economy. long-term growth.

The two-year yield hit 4.1320% in Asia, while the 10-year yield held steady at 3.5593%.

“The chances of a soft landing are likely to diminish to the extent that policy needs to be tighter, or tighter for longer,” Fed Chairman Jerome Powell told reporters after the hike was announced. rates.

UPCOMING HIKES

Central bank meetings in Taiwan, Japan, the Philippines, Indonesia, Switzerland, Britain and Norway are scheduled for later today with hikes expected everywhere but Japan.

Japan confirmed its commitment to an ultra-dovish monetary policy this week by spending more than 2 trillion yen ($13.8 billion) in the past two days to maintain a 0.25% cap on bond yields. 10-year Japanese government bonds.

However, even if no policy shifts occur, Governor Haruhiko Kuroda’s views on the steep fall in the yen will come under intense scrutiny as growing unease could portend policy shifts and a dovish attitude could trigger further yen selling.

The yen is down about 20% against the dollar this year and at 144.46 to the dollar, it is close to a 24-year low.

“We see the risk of USD/JPY heading towards 147 in the coming months,” Rabobank strategist Jane Foley said in a note to clients.

The Australian and New Zealand dollars are at their lowest since mid-2020, with the Aussie down 0.7% on Thursday to $0.6586 and the Kiwi down 0.6% to $0.5816.

In commodity markets, oil slid on fears that rising interest rates could dampen demand. U.S. crude futures were flat in early trading in Asia at $83.43 a barrel. Brent futures were at $90.39.

Wheat rose overnight on fears of a wider and deeper war in Ukraine. ($1 = 144.3800 yen)

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High-tech FDI boosts economic development in Việt Nam https://jamiron.net/high-tech-fdi-boosts-economic-development-in-viet-nam/ Tue, 20 Sep 2022 08:22:00 +0000 https://jamiron.net/high-tech-fdi-boosts-economic-development-in-viet-nam/ VIETNAM, September 20 – HCM CITY – Foreign investment in high technology will continue to drive Việt Nam’s economic growth for years to come, said Michael Kokalari, chief economist at investment fund VinaCapital. Việt Nam’s economic growth has accelerated this year, which is why the World Bank, IMF and others have sharply revised upward their […]]]>

VIETNAM, September 20 –

HCM CITY – Foreign investment in high technology will continue to drive Việt Nam’s economic growth for years to come, said Michael Kokalari, chief economist at investment fund VinaCapital.

Việt Nam’s economic growth has accelerated this year, which is why the World Bank, IMF and others have sharply revised upward their GDP growth forecasts for the country, a growing number of economists s now expecting it to exceed 8% this year. This has prompted investors to wonder what is different in Việt Nam and why.

In a note, Kokalari said, citing recently published research by economists from Harvard University, that one of the reasons why Việt Nam is an economic exception is that FDI supports the country’s manufacturing industry while leading to an increase in the complexity of products made in Việt Nam.

According to the economist, an increase in the complexity of the products that a country is able to produce is the most powerful engine of growth for the economy of a developing country.

“Recent announcements from Samsung, Apple and others make us confident that foreign investment in high technology will continue to propel Việt Nam’s economic growth for years to come,” he said.

Samsung, Việt Nam’s largest foreign investor, has announced that it will start producing semiconductor parts in the country.

Apple has announced that it will start producing Watches and MacBooks in Việt Nam, the first time they will be made outside of China.

Apple has “big plans for Việt Nam” according to insiders, who also noted that the Apple Watch is particularly complicated to manufacture due to the challenge of squeezing so many components into such a small package.

According to research by the London School of Economics and the World Bank, FDI helps “developing economies move into higher value-added segments of the value chain”, and high-tech FDI has had a significant positive impact on the economy of Việt Nam. .

In addition, Việt Nam has made the biggest jump in Harvard’s Economic Complexity Index rankings in the past two decades, in part because investments from Samsung and Intel have attracted a wave of other high-tech investments from Apple, LG Electronics, Dell and a number of Japanese companies. .

According to Kokalari, the main motivations for companies to set up high-tech factories in Việt Nam are a highly skilled, low-wage workforce and the country’s geographic proximity to high-tech supply chains in Asia.

The recent trade tensions between the United States and China, in particular the recent announcement by the Biden administration that it will maintain Trump’s tariffs on Chinese imports, essentially guarantees that multinational companies will continue to inject FDI into Việt Nam for years to come, Kokalari said.

Việt Nam’s trade surplus with the United States more than doubled from $35 billion in 2018 to $71 billion (20% of GDP) in 2021, a period during which its trade deficit with China also more than doubled to $54 billion.

Moving up the value chain drives GDP growth

According to economists, high-tech FDI boosts Việt Nam’s GDP in two ways: by increasing incomes and by improving the country’s ability to produce complex products.

The former supports short-term GDP growth since domestic consumption accounts for two-thirds of Việt Nam’s GDP, while the latter bolsters the country’s long-term economic prospects.

The net result is that the production of smartphones, home electronics, and other products of a relatively high degree of complexity ultimately contributed more than $1,000 of Việt Nam’s $3,000 GDP per capita in 2020. .

Revenues and profits of most companies listed on Việt Nam stock exchanges are mainly directly or indirectly related to domestic consumption.

This gives active equity managers plenty of opportunities to outperform the benchmark VN index by pricing in the stock prices of companies that stand to benefit the most from their exposure to rising consumer spending by emerging middle-class consumers in Việt Nam. which ultimately results from the increase in high technology. IDE entries.

Kokalari said, “Foreign-owned factories in Việt Nam still import most of the production components/inputs they need to make the products they export, especially high-tech products like consumer electronics. and smartphones.

“We expect the imported content of Vệt Nam’s exports to drop and the contribution of local content to skyrocket as local companies develop their capacity to supply foreign companies with production inputs in the coming years.

“Secondly, the nascent wave of FDI in the production of some of the most complex products ever made in Việt Nam is expected to lead to more ‘ripple effects’ that will lead local manufacturers to diversify into higher value segments. added to the value chain”.

Apple and Samsung’s plans to produce some of the most technologically advanced products ever made in Việt Nam would significantly boost Việt Nam’s GDP growth in the coming years and ensure that the economic “decoupling” that Việt Nam Nam realized this year could be sustained into 2023.

“Our daily interactions with a wide range of Vietnamese companies – from large-cap listed companies to ultra-savvy small tech entrepreneurs – continually make us appreciate the strong parallels between Việt Nam’s economy in the 2020s and that of Japan. in the 1970s, when this country began its decades-long climb up the global value chain.

“We remain extremely optimistic about Việt Nam’s economic outlook and, by extension, the outlook for much higher stock prices in the years to come.” —VNS

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OFG Bancorp: Puerto Rico’s rapid economic recovery to boost earnings (NYSE: OFG) https://jamiron.net/ofg-bancorp-puerto-ricos-rapid-economic-recovery-to-boost-earnings-nyse-ofg/ Sun, 18 Sep 2022 17:52:00 +0000 https://jamiron.net/ofg-bancorp-puerto-ricos-rapid-economic-recovery-to-boost-earnings-nyse-ofg/ Cavan Images OFG Bancorp Earnings (NYSE: OFG) will likely continue to increase over the next year and a half due to the strength of Puerto Rico’s economy, which will increase the size of the loan portfolio. In addition, the margin will increase in the context of the increase interest rate environment, which will further support […]]]>

Cavan Images

OFG Bancorp Earnings (NYSE: OFG) will likely continue to increase over the next year and a half due to the strength of Puerto Rico’s economy, which will increase the size of the loan portfolio. In addition, the margin will increase in the context of the increase interest rate environment, which will further support earnings. Overall, I expect OFG Bancorp to report earnings of $3.33 per share for 2022, up 18% year-over-year. Compared to my last company report, I increased my revenue estimate primarily because I increased my loan growth estimate. For 2023, I expect the company to report earnings of $3.64 per share, up 9% year-over-year. The year-end target price suggests a strong upside from the current market price. Therefore, I maintain a buy rating on OFG Bancorp.

Regional economy bodes well for loan growth

OFG Bancorp’s loan portfolio exceeded my expectations by growing 2.1% in the second quarter of 2022. This led to first-half loan growth of 8% annualized. Management was bullish on loan growth on the conference call and said it expects the auto finance, consumer and business segments to contribute to growth.

The rapidly strengthening Puerto Rican economy will likely be the main driver of OFG Bancorp’s loan growth. Puerto Rico’s unemployment rate has fallen sharply this year and continues to break records every month. Such a rapidly improving labor market can only whet the local appetite for credit, especially consumer loans.

Chart
Puerto Rico unemployment rate data from YCharts

Additionally, the economic activity index shows that economic activity is currently robust in the region, which also bodes well for credit demand.

Puerto Rico Economic Activity Index

Puerto Rico Economic Development Bank

Given these factors, I expect the loan book to grow at an annualized rate of 6% each quarter through the end of 2023. In my last report on OFG Bancorp, I estimated loan growth to 5.0% for 2022. I have now revised my estimated growth loan up to 7.2% due to the second quarter performance as well as the faster than expected speed of economic improvement.

I expect growth in other balance sheet items to follow loan growth. Equity book value growth, in particular, will be much lower due to pressures from unrealized losses on available-for-sale securities. As interest rates rose, the market value of these securities fell, resulting in large unrealized losses that flowed directly to equity without affecting the income statement. The tangible book value per share has already fallen from $19.1 at the end of December 2021 to $18.86 at the end of June 2022.

The 75 basis point hike in the federal funds rate in July will put further pressure on the book value of equity. Additionally, I expect another 75 basis point hike in the fed funds rate for the rest of the year. On the other hand, retained earnings will increase the book value of equity. The following table shows my balance sheet estimates.

EX18 FY19 FY20 FY21 FY22E FY23E
Financial situation
Net loans 4,432 6,642 6,501 6,329 6,784 7,201
Net loan growth 9.3% 49.9% (2.1)% (2.6)% 7.2% 6.1%
Other productive assets 1,285 1,095 459 896 1,767 1,774
Deposits 4,908 7,699 8,416 8,603 9,211 9,585
Total responsibilities 5,583 8,252 8,740 8,831 9,415 9,790
Common Equity 908 953 994 1,069 1,078 1,216
Book value per share ($) 17.7 18.4 19.3 21.3 22.3 25.1
Tangible BVPS ($) 15.9 15.7 16.7 19.1 19.9 22.7

Source: SEC Filings, Author’s Estimates

(In millions of dollars, unless otherwise indicated)

Sticky deposit costs to allow for margin expansion

OFG Bancorp’s net interest margin has grown rapidly this year, primarily due to rising interest rates.

Net interest margin OFG Bancorp

Presentation of 2nd quarter 2022 results

The margin has jumped this year despite a two to three month lag between a rate hike and its aftermath, as mentioned in the conference call. The high sensitivity of the margin to rates is explained not only by floating rate loans, but also by a deposit mix which is heavily composed of non-interest bearing deposits. These deposits represented 60.5% of total deposits at the end of June 2022. Non-interest bearing deposits will keep the average cost of deposits rising in a rising rate environment.

The results of management’s interest rate sensitivity analysis showed that a 200 basis point increase in interest rates can increase net interest income by 5.14% year-over-year.

OFG Bancorp Interest Rate Sensitivity Analysis

Filing 2Q 2022 10-Q

Given these factors, I expect the margin to increase by 15 basis points in the second half of 2022 and then remain unchanged in 2023.

Increase in provision expense estimate

Non-performing loans represented 1.81% of total loans, while provisions represented 2.36% of total loans at end-June 2022. Puerto Rico’s economy signals a future improvement in credit quality. Therefore, I do not expect much pressure on the provisioning of the existing loan portfolio. However, the loan additions mentioned above will require additional provisioning for expected loan losses.

Overall, I expect net provision expense to be approximately 0.4% of total loans (annualized) in each quarter through the end of 2023. In comparison, net provision expense was an average of 1.4% of total loans over the past five years. In my last report on OFG Bancorp, I estimated a net provision charge of $17 million for 2022. I have now increased my provision charge estimate to $22 million for this year, primarily because I increased my loan growth estimate.

Profits are expected to increase by 18%

Planned loan additions and margin expansion are likely to be the main drivers of earnings growth over the next year and a half. On the other hand, higher provision charges will likely limit earnings growth. Overall, I expect OFG Bancorp to report earnings of $3.33 per share for 2022, up 18% year-over-year. For 2023, I expect earnings to grow another 9% to $3.64 per share. The following table shows my income statement estimates.

EX18 FY19 FY20 FY21 FY22E FY23E
income statement
Net interest income 316 323 408 407 468 518
Allowance for loan losses 56 97 93 0 22 28
Non-interest income 80 82 124 133 133 133
Non-interest charges 207 233 345 326 345 367
Net income – Common Sh. 78 47 68 145 161 176
BPA – Diluted ($) 1.52 0.92 1.32 2.81 3.33 3.64

Source: SEC Filings, Author’s Estimates

(In millions of dollars, unless otherwise indicated)

In my last report on OFG Bancorp, I estimated earnings at $3.07 per share for 2022. I have now revised my earnings estimate upwards, mainly because I increased the growth estimate of my loan.

Actual earnings may differ materially from estimates due to the risks and uncertainties associated with inflation and, therefore, the timing and magnitude of interest rate increases. Also, a deeper or longer than expected recession may increase the expected loan loss provisioning beyond my estimates.

Maintain a buy rating

OFG Bancorp offers a dividend yield of 2.9% at the current quarterly dividend rate of $0.20 per share. Earnings and dividend estimates suggest a payout ratio of 22% for 2023, which is the same as the average for the past five years. Therefore, I do not expect an increase in the level of dividends.

I use historical price/tangible accounting (“P/TB”) and price/earnings (“P/E”) multiples to value OFG Bancorp. The stock has traded at an average P/TB ratio of 1.17 in the past, as shown below.

Chart
OFG Price to Tangible Book Value data by YCharts

Multiplying the average P/TB multiple by the expected tangible book value per share of $19.9 yields a price target of $23.2 for the end of 2022. This price target implies a decline of 15.0% compared to the closing price on September 16. The following table shows the sensitivity of the target price to the P/TB ratio.

Multiple P/TB 0.97x 1.07x 1.17x 1.27x 1.37x
TBVPS – Dec 2022 ($) 19.9 19.9 19.9 19.9 19.9
Target price ($) 19.3 21.2 23.2 25.2 27.2
Market price ($) 27.3 27.3 27.3 27.3 27.3
Up/(down) (29.5)% (22.2)% (15.0)% (7.7)% (0.4)%
Source: Author’s estimates

The stock has traded at an average P/E ratio of around 14.4x in the past, as shown below.

Chart
OFG PE Ratio data by YCharts

Multiplying the average P/E multiple by the expected earnings per share of $3.33 yields a target price of $47.7 for the end of 2022. This price target implies a 74.8% upside from at the closing price on September 16. The following table shows the sensitivity of the target price to the P/E ratio.

Multiple P/E 12.4x 13.4x 14.4x 15.4x 16.4x
EPS – 2022 ($) 3.33 3.33 3.33 3.33 3.33
Target price ($) 41.1 44.4 47.7 51.1 54.4
Market price ($) 27.3 27.3 27.3 27.3 27.3
Up/(down) 50.4% 62.6% 74.8% 86.9% 99.1%
Source: Author’s estimates

Equal weighting of target prices from both valuation methods gives a combined result target price of $35.5, implying a 29.9% upside from the current market price. Adding the forward dividend yield gives an expected total return of 32.4%. Therefore, I maintain a buy rating on OFG Bancorp.

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Global markets retreat to economic ‘hurricane’ https://jamiron.net/global-markets-retreat-to-economic-hurricane/ Fri, 16 Sep 2022 20:05:56 +0000 https://jamiron.net/global-markets-retreat-to-economic-hurricane/ Breadcrumb Links FP Investor Markets brace for another round of interest rate hikes from the US Federal Reserve and Bank of England next week Author of the article: A trader working at the New York Stock Exchange. Photo by Andrew Kelly/Reuters Files Content of the article The impending economic “hurricane” that JPMorgan boss Jamie Dimon […]]]>

Markets brace for another round of interest rate hikes from the US Federal Reserve and Bank of England next week

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The impending economic “hurricane” that JPMorgan boss Jamie Dimon warned of in June is starting to blow hard around the world and global markets are falling again.

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In a stark trade reading on Thursday night, global delivery firm FedEx withdrew the financial forecast it issued just three months ago, as it said the global demand slowdown had accelerated at the end of August and was about to worsen in the November quarter. Also lacking revenue and earnings forecasts, FedEx shares fell 16% after the bell.

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The World Bank added to the macroeconomic gloom and warned late Thursday that the global economy was heading into recession as central banks around the world simultaneously hiked interest rates to tackle persistent inflation.

Believing the world was in its biggest relapse from a post-recession recovery since 1970, he saw little to no support from major central banks and said they may need to raise interest rates. interest of two additional percentage points on top of the two point increase already seen compared to the 2021 average.

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As markets brace for another round of interest rate hikes from the US Federal Reserve and the Bank of England next week, stocks fell across the world on Friday. The MSCI global equity index was on the verge of a two-month low and set for its worst full week since June. Asian and European stock markets fell and US stock futures were in the red.

As two-year U.S. Treasury yields edged closer to 4% for the first time in 15 years, fed funds futures markets are now seeing policy rates as high as 4.5% by March and not seeing no return below 4% for the rest of 2023.

With global currency markets becoming increasingly choppy, the dollar has climbed again in the past 24 hours – topping 7.0 Chinese yuan for the first time in more than two years and hitting its highest level against the sterling since 1985.

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In a sign of darkening investor sentiment, markets dismissed signs of surprising resilience in Chinese retail sales and industrial production figures for August and instead focused on the fallout from the worsening of the real estate crisis.

Property investment fell 13.8% last month, the fastest pace since December 2021. New home prices fell 1.3% year-on-year in August, the fastest pace since August 2015 .

With few signs that China will significantly ease zero-COVID soon, some analysts expect the economy to grow just 3% this year, which would be the slowest since 1976 – excluding the 2.2% expansion during the first COVID hit in 2020.

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Foreign investors continued to exit Chinese bonds last month and, with the yuan falling, China’s foreign exchange regulator on Friday urged companies not to speculate in the currency.

Sterling’s last slide was sharper. British retail sales fell much more than expected in August, another sign that the economy is slipping into recession.

Oil rose on Friday, but the year-over-year rise in the price of Brent fell below 20% for the first time since February 2021.

The International Energy Agency forecast near zero oil demand growth in the fourth quarter due to a weaker demand outlook for China, while the US Department of Energy said there was little likely to seek to fill the strategic petroleum reserve before fiscal year 2023.

© Thomson Reuters 2022

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Stock futures rise slightly ahead of fresh batch of economic data https://jamiron.net/stock-futures-rise-slightly-ahead-of-fresh-batch-of-economic-data/ Thu, 15 Sep 2022 01:34:00 +0000 https://jamiron.net/stock-futures-rise-slightly-ahead-of-fresh-batch-of-economic-data/ U.S. stock futures were slightly higher on Wednesday evening as investors anticipated several economic reports due out in the morning. Futures contracts linked to the Dow Jones Industrial Average edged up 17 points, or 0.05%. S&P 500 futures added 0.22% and Nasdaq 100 futures advanced 0.12%. Earlier in the day, the major averages ended a […]]]>

U.S. stock futures were slightly higher on Wednesday evening as investors anticipated several economic reports due out in the morning.

Futures contracts linked to the Dow Jones Industrial Average edged up 17 points, or 0.05%. S&P 500 futures added 0.22% and Nasdaq 100 futures advanced 0.12%.

Earlier in the day, the major averages ended a choppy session on a slightly higher note. The Dow Jones closed up slightly, 30 points, after falling more than 200 points at one point. The S&P 500 rose 0.3% and the Nasdaq Composite rose 0.7%.

Stocks sought stability after a warmer-than-expected inflation report on Tuesday sent them tumbling to post their worst day since 2020. August’s consumer price index report showed the headline inflation rose 0.1% on a monthly basis, despite lower gasoline prices.

“One-day events are difficult to extrapolate,” said Jeff deGraaf, founder and president of Renaissance Macro Research, on CNBC’s “Closing Bell: Overtime.” “It’s one of those extreme events that doesn’t have a sequel and tends to be good news, not bad.”

“Inflation is really a dark cloud over equities, but I think it’s really important for people to keep in mind that it’s not about good and bad in the markets, it’s about better and worse,” he added, “and it looks like inflation is getting better.”

Wednesday’s Producer Price Index report showed wholesale prices fell 0.1% in August, which deGraaf said gave him comfort.

Investors eagerly await a series of economic updates on Thursday morning, including retail sales, import prices and jobless claims, as well as the Philadelphia Fed’s manufacturing survey and the the making of the Empire State — all at 8:30 a.m. ET.

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India’s chief economic adviser expects inflation fears to ease over time https://jamiron.net/indias-chief-economic-adviser-expects-inflation-fears-to-ease-over-time/ Tue, 13 Sep 2022 09:55:00 +0000 https://jamiron.net/indias-chief-economic-adviser-expects-inflation-fears-to-ease-over-time/ By CNBCTV18.com Sep 13, 2022, 3:25 PM IST (Released) mini India’s Chief Economic Advisor is not worried about CPI inflation crossing the 7% mark. In fact, he lists some positives for the Indian economy in this conversation with CNBC TV-18. India’s chief economic adviser, V Anantha Nageswaran, is not worried about retail inflation crossing the […]]]>

By CNBCTV18.com IST (Released)

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India’s Chief Economic Advisor is not worried about CPI inflation crossing the 7% mark. In fact, he lists some positives for the Indian economy in this conversation with CNBC TV-18.

India’s chief economic adviser, V Anantha Nageswaran, is not worried about retail inflation crossing the 7% mark in August. The CEA attributed the figure to base effects and said the market could overreact to a possible shortage of food crops and prices could react in advance.

“As soon as the market knows that food grain stocks are sufficient and the planting deficit is not as large as claimed, I expect the current spike in food prices to moderate over time. ,” CEA told CNBC TV-18.

During the 1970s, as inflation rose, the expectation of high inflation became entrenched in the economic decision-making of households and businesses. The higher inflation rose, the more people expected it to stay high, and they incorporated this belief into wage and price decisions.

But what are inflation expectations?

This is the rate at which consumers, businesses and investors expect prices to rise in the future. If prices are expected to increase by 3%, companies will seek to increase prices by at least 3%, while workers will expect a similar increase in their wages.

Between 1978 and 1982, the United States experienced its second period of double-digit inflation in less than a decade, prompting Fed Chairman Paul Volcker to raise interest rates to as high as 19%. Volcker caused two massive but brief recessions, and subsequent spending cuts succeeded in calming inflation.

The United States is currently experiencing its worst inflation in four decades, prompting the FOMC to raise interest rates four times in a row. Experts are now predicting another 75 basis point hike at the September meeting and another 50 basis point in November. Inflation data for August in the United States will be released this evening.

Higher interest rates have always led to capital outflows from emerging economies like India. But the CEA is not worried about the Federal Reserve and the quantum of its rate hikes.

“Even if the Federal Reserve continues to tighten, the market will pull through next year. Developed economies are likely to experience an economic slowdown, which will lead to a reversal in monetary policy, and capital flows will therefore shift to regions that offer them the highest yields, and India is one of them,” he said.

To defend or not to defend?

The CEA also spoke on the currency, saying that India is not defending its currency, but the country’s fundamentals are such that the rupee can support itself.

“The RBI ensures that whatever direction the rupee moves in line with market trends, it is gradual and does not impose a burden on importers or exporters,” he said.

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Economic losses from floods in Pakistan amount to around $18 billion https://jamiron.net/economic-losses-from-floods-in-pakistan-amount-to-around-18-billion/ Fri, 09 Sep 2022 23:37:48 +0000 https://jamiron.net/economic-losses-from-floods-in-pakistan-amount-to-around-18-billion/ Floods in Pakistan: Catastrophic floods destroyed crops on 8.25 million acres in Pakistan. Islamabad: The estimated economic loss from the unprecedented floods in Pakistan is close to USD 18 billion, an increase from the previously estimated USD 12.5 billion, as calculated by the Center and endorsed by the provinces. The growth of agriculture suffered a […]]]>

Floods in Pakistan: Catastrophic floods destroyed crops on 8.25 million acres in Pakistan.

Islamabad:

The estimated economic loss from the unprecedented floods in Pakistan is close to USD 18 billion, an increase from the previously estimated USD 12.5 billion, as calculated by the Center and endorsed by the provinces.

The growth of agriculture suffered a much more severe impact as a result of the floods. The catastrophic floods destroyed crops on 8.25 million acres from an initial assessment of 4.2 million acres, further increasing economic losses, The News International reported.

Cotton, rice and minor crops have been badly damaged and if the dewatering is not carried out properly, it can cause serious problems for the sowing of wheat. The cotton harvest has evaporated in most parts of the country and now the wheat plantings are threatened.

The Ministry of National Food Security has been instructed to submit a summary to increase the minimum support price of wheat for the next harvest.

Authorities held meetings with international donors and assured them that Pakistan would put in place an effective monitoring and evaluation system to use every penny to mitigate flood losses in a transparent manner, The News International reported.

In the wake of increasing economic losses and reduced GDP growth, per capita income is expected to slow. The government had envisaged a GDP growth rate of 5 percent for the current fiscal year.

In addition, poverty and unemployment will increase dramatically, from 21.9% to over 36%. According to Pakistani government estimates, some 37% of the population has been affected by poverty after the floods in 118 districts.

A high-level committee comprised of representatives from the Ministry of Finance, Ministry of Planning, State Bank of Pakistan, RBF, PIDE and others assessed that poverty and unemployment have increased in several ways , rising from 21.9% to more than 36%.

UN Secretary-General Antonio Guterres landed in Pakistan on Friday for a two-day visit to take stock of the flooding situation and express solidarity with the people of the country affected by the extreme rains of the monsoon.

The UN chief will have meetings with Pakistani leaders and senior officials to exchange views on the national and global response to this disaster caused by climate change, an official statement said.

Guterres will travel to the areas most affected by the climate catastrophe in Pakistan. He will interact with displaced families and first responders on the ground, and oversee UN humanitarian response work in support of government rescue and relief efforts for millions of affected people.

Meanwhile, as Pakistan grapples with unprecedented flooding, the World Health Organization (WHO) has also warned of a worsening crisis in the country ravaged by record rains.

“We are following closely and with deep concern the humanitarian crisis currently facing the people of Pakistan following the devastating monsoon floods,” said Dr Ahmed Al-Mandhari, WHO Regional Director for the Mediterranean. East, about the floods in Pakistan.

In a press release issued on September 5, Dr Al-Mandhari said the current scale of flood damage and destruction is unprecedented in Pakistan – a result of long-term global climate change leading to more severe weather patterns. .

According to the World Meteorological Organization (WMO), Pakistan is facing one of the worst floods in its history.

The government estimates that millions of people across the country are affected by the rains, floods and impacts such as landslides, destruction of infrastructure, homes, farmland and livestock. The catastrophic floods have so far claimed at least 1,325 lives in Pakistan.

The human and socio-economic toll is expected to rise as flood levels continue to rise, with immense pressure on the country’s dams.

Pakistan’s meteorological service said it was the wettest August since records began in 1961. The national rainfall was 243% above average. In Baluchistan province it was +590% and in Sindh +726%, according to the monthly report.

(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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