Independent Asian Credit Research, Bondcritic

Warut Promboon

Independent Asian Credit Research

Asian Fixed Income/Frontier Market Research

Bondcritic

Bondcritic, established in 2009, is designed to be an independent credit research voice that helps investors gain insights and unbiased analyses on Asian fixed income market. Our mission is to discover deep-value Asian high-yield and distressed bonds with a bottom-up approach, together with the help of our proprietary ESG (Environmental, Social Development, and Governance) model. At the same time, we focus on bringing investment cases of unrated and unloved issuers to the general public.

Thematic (Sector/Industry)

We see 2020 as full of surprises, marked by rising geopolitical risk. Major headlines this year will include the US election in November, BREXIT, the greater China situation (which includes a cross-strait tension between China and Taiwan and the on-going protest in Hong Kong), the US-China trade war, a lack of progress in the Nuclear talk with North Korea, and, last but not least, the middle east tension which has already escalated to the next level. The attack that killed Iran’s top general on 2-Jan started the year on the right track for gold and oil prices as well as those relying on prices of these two commodities, such as the Mideastern countries and Russia.
In the year ahead, we favor equities over bonds in general.  As we believe valuations are stretched, securities selection is key and a buying opportunity on the sell-off event, especially stemming from the geopolitical risk, will reward value investors. We prefer emerging markets (EM) equities and bonds as we expect more upside potentials in light of improving credit fundamentals and a continued fund flow into an EM world for diversification away from developed markets (DM). At the end of the day, unpredictable policy shifts in the US and in Europe do not help. We also do not expect China’s trade war with the US and debt debacle to go away anytime soon.
In a year of rising geopolitical risk, we expect infrastructure, utilities, and other non-cyclical businesses to do better. However, rising oil prices and continued recovery (albeit at a slow pace) should help the oil and gas sector.
This year should be another record year for green financing, spurred by more awareness that our planet is changing for the worst (i.e. the bushfire in Australia). Green financing (including green bonds) has a more committed group of investors which means less volatile spread movement in general.
In 2020, we will add additional angles to our fixed income research to include equity and F/X strategies as well as green bond research. Capital markets continue to evolve and, even at a slower pace than expected, we believe local currency EM bonds and tokenized securities (i.e. security tokens) are two topics we will follow closely. Stay tuned!

We see 2020 as full of surprises, marked by rising geopolitical risk. Major headlines this year will include the US election in November, BREXIT, the greater China situation (which includes a cross-strait tension between China and Taiwan and the on-going protest in Hong Kong), the US-China trade war, a lack of progress in the Nuclear talk with North Korea, and, last but not least, the middle east tension which has already escalated to the next level. The attack that killed Iran’s top general on 2-Jan started the year on the right track for gold and oil prices as well as those relying on prices of these two commodities, such as the Mideastern countries and Russia.
In the year ahead, we favor equities over bonds in general.  As we believe valuations are stretched, securities selection is key and a buying opportunity on the sell-off event, especially stemming from the geopolitical risk, will reward value investors. We prefer emerging markets (EM) equities and bonds as we expect more upside potentials in light of improving credit fundamentals and a continued fund flow into an EM world for diversification away from developed markets (DM). At the end of the day, unpredictable policy shifts in the US and in Europe do not help. We also do not expect China’s trade war with the US and debt debacle to go away anytime soon.
In a year of rising geopolitical risk, we expect infrastructure, utilities, and other non-cyclical businesses to do better. However, rising oil prices and continued recovery (albeit at a slow pace) should help the oil and gas sector.
This year should be another record year for green financing, spurred by more awareness that our planet is changing for the worst (i.e. the bushfire in Australia). Green financing (including green bonds) has a more committed group of investors which means less volatile spread movement in general.
In 2020, we will add additional angles to our fixed income research to include equity and F/X strategies as well as green bond research. Capital markets continue to evolve and, even at a slower pace than expected, we believe local currency EM bonds and tokenized securities (i.e. security tokens) are two topics we will follow closely. Stay tuned!

Frontier and emerging markets (Vietnam)

Dylan Waller

Cross Asset Strategy

Sri Lanka's equity market is currently in an attractive state following poor performance in recent years.  MSCI Sri Lanka IMI trades at 8.0x PE and 0.8xPB as of the end of September, and as I mentioned in <a href="https://www.smartkarma.com/insights/banking-on-sri-lanka" target="_blank" data-smartkarma-citation="insights:25670" rel="noopener">Banking on Sri Lanka, some of the countries banks are trading well below book value. </a> Sri Lanka's tourism industry will be a key driver of growth in the coming years.  However, tourist arrivals began to decline this May, following the terrorist attack that occurred this April, which will disrupt the country's economic growth in the short term.
The IMF projects that Sri Lanka’s economic growth will still reach 3.6% this year, which will be driven by a recovery in agriculture and manufacturing.
One major thorn that I previously addressed in <a href="https://www.smartkarma.com/insights/sri-lanka-s-short-term-outlook-is-hazy-limited-pockets-of-value-present" target="_blank" data-smartkarma-citation="insights:26903" rel="noopener">Sri Lanka's Short Term Outlook Is Hazy: Limited Pockets of Value Present</a> was the fact that the country's currency performed very poorly during 2018.  However, the currency is now in a relatively stable position, which has been supported by the increase in foreign exchange reserves this year.
The main potential long term catalysts for Sri Lanka includes the transition of its economy, which needs to be driven by FDI that focuses on new industries.  The country's current export structure is very poorly diversified given that textile and agriculture products both collectively account for 66.4% of the country’s total exports. 
Sri Lanka is well worth monitoring for value investing opportunities in the banking sector, investing in the bond market ( <a href="https://www.smartkarma.com/insights/sri-lanka-hope-amidst-turbulence" target="_blank" data-smartkarma-citation="insights:26286" rel="noopener">Sri Lanka: Hope Amidst Turbulence</a> ), or by investing in companies that are expanding operations outside of Sri Lanka and targeting the FMCG and healthcare sectors ( <a href="https://www.smartkarma.com/insights/sri-lanka-market-update-hemas-holdings-sails-smoothly-through-the-hazy-macro-political-picture" target="_blank" data-smartkarma-citation="insights:29246" rel="noopener">Sri Lanka Market Update: Hemas Holdings Sails Smoothly Through the Hazy Macro/Political Picture</a> ).

Sri Lanka's equity market is currently in an attractive state following poor performance in recent years.  MSCI Sri Lanka IMI trades at 8.0x PE and 0.8xPB as of the end of September, and as I mentioned in Banking on Sri Lanka, some of the countries banks are trading well below book value.   Sri Lanka's tourism industry will be a key driver of growth in the coming years.  However, tourist arrivals began to decline this May, following the terrorist attack that occurred this April, which will disrupt the country's economic growth in the short term.
The IMF projects that Sri Lanka’s economic growth will still reach 3.6% this year, which will be driven by a recovery in agriculture and manufacturing.
One major thorn that I previously addressed in Sri Lanka's Short Term Outlook Is Hazy: Limited Pockets of Value Present was the fact that the country's currency performed very poorly during 2018.  However, the currency is now in a relatively stable position, which has been supported by the increase in foreign exchange reserves this year.
The main potential long term catalysts for Sri Lanka includes the transition of its economy, which needs to be driven by FDI that focuses on new industries.  The country's current export structure is very poorly diversified given that textile and agriculture products both collectively account for 66.4% of the country’s total exports. 
Sri Lanka is well worth monitoring for value investing opportunities in the banking sector, investing in the bond market ( Sri Lanka: Hope Amidst Turbulence ), or by investing in companies that are expanding operations outside of Sri Lanka and targeting the FMCG and healthcare sectors ( Sri Lanka Market Update: Hemas Holdings Sails Smoothly Through the Hazy Macro/Political Picture ). 

Banking on Sri Lanka: October 2019 Update

Sri Lanka

Sri Lanka Government International Bond (SRILAN GOVT)

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Sri Lanka Government International Bond (SRILAN GOVT)

2020 Strategy: Less Than 20/20

We see 2020 as full of surprises, marked by rising geopolitical risk. Major headlines this year will include the US election in November, BREXIT,...

Bondcritic

Banking on Sri Lanka: October 2019 Update

Sri Lanka's equity market is currently in an attractive state following poor performance in recent years. MSCI Sri Lanka IMI trades at 8.0x PE and...

Dylan Waller

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)