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.

Credit

<p>2/10 UST spread remains in double–digit, and the 10-year treasury yield rose about 20 bps in a week, indicating risk appetite in the market, on a potential US-China trade war truce and a positive development on the Brexit deal (See more of the content below).</p>

2/10 UST spread remains in double–digit, and the 10-year treasury yield rose about 20 bps in a week, indicating risk appetite in the market, on a potential US-China trade war truce and a positive development on the Brexit deal (See more of the content below).

Bondcritic Market Monitor (14-Oct): Improving Risk Apetite

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Cross Asset Strategy

<h2>Macro Insights</h2>
<p>In <a href="https://www.smartkarma.com/insights/more-demos-due-minister-stabbed-tax-shortfall-discord-re-labor-law-amendments-overhang" target="_blank" data-smartkarma-citation="insights:33058" rel="noopener">More Demos Due / Minister Stabbed / Tax Shortfall / Discord Re Labor Law / Amendments Overhang,</a> <a href="https://www.smartkarma.com/profiles/kevin-o-rourke" target="_blank" data-smartkarma-citation="accounts:2060" rel="noopener">Kevin O’Rourke</a> comments on the most important political and economic developments in Indonesia over the past week. </p>
<p>In <a href="https://www.smartkarma.com/insights/asian-resilience-lies-in-its-structural-strength" target="_blank" data-smartkarma-citation="insights:32963" rel="noopener">Asian Resilience - Lies In Its Structural Strength,</a><a href="https://www.smartkarma.com/profiles/sharmila-whelan" target="_blank" data-smartkarma-citation="accounts:1728" rel="noopener">Sharmila Whelan</a> looks at recent economic numbers coming out of Asia and asseses the longer term economic outlook, which she sees as positive. </p>
<p>In <a href="https://www.smartkarma.com/insights/vietnam-primed-for-investment-grade" target="_blank" data-smartkarma-citation="insights:32676" rel="noopener">Vietnam: Still Primed for Investment Grade</a>, credit specialist <a href="https://www.smartkarma.com/profiles/warut-promboon" target="_blank" data-smartkarma-citation="accounts:1226" rel="noopener">Warut Promboon</a> zeros in on Vietnam and sees upward momentum with its credit rating, despite Moody's recent downgrade review, which he feels shoud be ignored.</p>
<h2>Equity Bottom-Up Insights</h2>
<div class="content-highlight">
<p>In <a href="https://www.smartkarma.com/insights/bank-rakyat-bbri-ij-digitalising-the-masses-on-the-ground-in-j-town" target="_blank" data-smartkarma-citation="insights:32974" rel="noopener">Bank Rakyat (BBRI IJ) - Digitalising the Masses</a>, CrossASEAN Insight Provider <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" data-smartkarma-citation="accounts:937" rel="noopener">Angus Mackintosh</a> takes a close look at this leading Indonesian microlender and finds it a compelling story. </p>
<p>In <a href="https://www.smartkarma.com/insights/ipo-radar-crc-part-i-thai-department-store-behemoth" target="_blank" data-smartkarma-citation="insights:32962" rel="noopener">IPO Radar: CRC (Part I), Thai Department Store Behemoth,</a><a href="https://www.smartkarma.com/profiles/athaporn-arayasantiparb-cfa" target="_blank" data-smartkarma-citation="accounts:766" rel="noopener">Athaporn Arayasantiparb, CFA</a> takes a first look at the potential upcoming IPO of Central Retail.</p>
<p>In a second insight, <a href="https://www.smartkarma.com/insights/ipo-radar-crc-part-2-valuation-and-risks" target="_blank" data-smartkarma-citation="insights:32985" rel="noopener">IPO Radar: CRC (Part 2), Valuation and Risks, </a><a href="https://www.smartkarma.com/profiles/athaporn-arayasantiparb-cfa" target="_blank" data-smartkarma-citation="accounts:766" rel="noopener">Athaporn Arayasantiparb, CFA</a> zeros in on the valuation of Central Retail. </p>
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<p>In <a href="https://www.smartkarma.com/insights/stubworld-ayala-re-tests-new-lows" target="_blank" data-smartkarma-citation="insights:32944" rel="noopener">StubWorld: Ayala Re-Tests New Lows,</a><a href="https://www.smartkarma.com/profiles/david-blennerhassett" target="_blank" data-smartkarma-citation="accounts:840" rel="noopener">David Blennerhassett</a> examines the widening NAV discount of <a href="https://www.smartkarma.com/entities/ayala-corporation" target="_blank" data-smartkarma-citation="entities:1474:1" rel="noopener">Ayala Corporation (AC PM)</a> and finds it quite compelling. </p>
<p>In <a href="https://www.smartkarma.com/insights/cimb-group-cimb-mk-lack-of-catalysts-keep-us-on-the-sidelines" target="_blank" data-smartkarma-citation="insights:32842" rel="noopener">Cimb Group (CIMB MK): Lack Of Catalysts Keep Us On The Sidelines,</a><a href="https://www.smartkarma.com/profiles/emile-farsoun" target="_blank" data-smartkarma-citation="accounts:4470" rel="noopener">Emile Farsoun</a> writes on this Malaysian lender and sees its valuation as full give relatively low returns. </p>
<p>In <a href="https://www.smartkarma.com/insights/ictsi-south-america-growth-push-done-to-a-turn" target="_blank" data-smartkarma-citation="insights:33021" rel="noopener">ICTSI: South America Growth Push Done to a Turn,</a> <a href="https://www.smartkarma.com/companies/drewry-maritime-financial-research" target="_blank" data-smartkarma-citation="companies:180" rel="noopener">Drewry Maritime Financial Research</a> revisit this Philippines based global container terminal player. </p>
<p>In <a href="https://www.smartkarma.com/insights/bgrim-thai-spp-leader-with-consistent-growth-prospects" target="_blank" data-smartkarma-citation="insights:32980" rel="noopener">BGRIM: Thai SPP Leader with Consistent Growth Prospects</a>, our friends at <a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a> initiate coverage of <a href="https://www.smartkarma.com/entities/b-grimm-pcl" target="_blank" data-smartkarma-citation="entities:23996:1" rel="noopener">B Grimm Power (BGRIM TB)</a> with a BUY rating, based on a 2020E target price of Bt48, derived from discounted cash flow valuation (6.9% WACC and 1% TG). </p>
<h2>Sector and Thematic Insights</h2>
<p>In <a href="https://www.smartkarma.com/insights/battle-of-the-banks-bbl-vs-kbank" target="_blank" data-smartkarma-citation="insights:33084" rel="noopener">Battle of the Banks - BBL Vs. KBANK</a>, event driven specialist <a href="https://www.smartkarma.com/profiles/brian-freitas" target="_blank" data-smartkarma-citation="accounts:4091" rel="noopener">Brian Freitas</a> revisits the pair trade of <a href="https://www.smartkarma.com/entities/bangkok-bank-public-co-ltd" target="_blank" data-smartkarma-citation="entities:213:1" rel="noopener">Bangkok Bank Public (BBL TB) </a>versus <a href="https://www.smartkarma.com/entities/kasikornbank-pcl" target="_blank" data-smartkarma-citation="entities:293:1" rel="noopener">Kasikornbank PCL (KBANK TB)</a> and find an interesting divergence in valuations. </p>

Macro Insights
In More Demos Due / Minister Stabbed / Tax Shortfall / Discord Re Labor Law / Amendments Overhang, Kevin O’Rourke comments on the most important political and economic developments in Indonesia over the past week. 
In Asian Resilience - Lies In Its Structural Strength,Sharmila Whelan looks at recent economic numbers coming out of Asia and asseses the longer term economic outlook, which she sees as positive. 
In Vietnam: Still Primed for Investment Grade, credit specialist Warut Promboon zeros in on Vietnam and sees upward momentum with its credit rating, despite Moody's recent downgrade review, which he feels shoud be ignored.
Equity Bottom-Up Insights

In Bank Rakyat (BBRI IJ) - Digitalising the Masses, CrossASEAN Insight Provider Angus Mackintosh takes a close look at this leading Indonesian microlender and finds it a compelling story. 
In IPO Radar: CRC (Part I), Thai Department Store Behemoth,Athaporn Arayasantiparb, CFA takes a first look at the potential upcoming IPO of Central Retail.
In a second insight, IPO Radar: CRC (Part 2), Valuation and Risks, Athaporn Arayasantiparb, CFA zeros in on the valuation of Central Retail. 

In StubWorld: Ayala Re-Tests New Lows,David Blennerhassett examines the widening NAV discount of Ayala Corporation (AC PM) and finds it quite compelling. 
In Cimb Group (CIMB MK): Lack Of Catalysts Keep Us On The Sidelines,Emile Farsoun writes on this Malaysian lender and sees its valuation as full give relatively low returns. 
In ICTSI: South America Growth Push Done to a Turn, Drewry Maritime Financial Research revisit this Philippines based global container terminal player. 
In BGRIM: Thai SPP Leader with Consistent Growth Prospects, our friends at Country Group initiate coverage of B Grimm Power (BGRIM TB) with a BUY rating, based on a 2020E target price of Bt48, derived from discounted cash flow valuation (6.9% WACC and 1% TG). 
Sector and Thematic Insights
In Battle of the Banks - BBL Vs. KBANK, event driven specialist Brian Freitas revisits the pair trade of Bangkok Bank Public (BBL TB) versus Kasikornbank PCL (KBANK TB) and find an interesting divergence in valuations. 

The Week That Was in ASEAN@Smartkarma - Digital Microlending, Central Retail, and Ayala Corp

Vietnam Government International Bond / Credit

<p>We see <a href="https://www.smartkarma.com/entities/vietnam-government-international-bond" target="_blank" data-smartkarma-citation="entities:28341:1" rel="noopener">Vietnam Government International Bond (VIETNM GOVT)</a>  as a “BB” credit with a positive rating pressure, following the path of Indonesia and the Philippines to an investment grade rating in the next 5 years on improving macroeconomic fundamentals. The US-China trade war led capital flow into Vietnam from China, in particular, to avoid the US tariff. Vietnam remains a communist country but we see political stability as one of the main catalysts for Vietnam to continue drawing foreign direct investments. We also see it as a place for opportunities where investors can earn alpha on an improving macro picture in an era of widespread geopolitical risk.</p><p>We believe Moody’s decision to put Vietnam’s “Ba3” senior unsecured debt rating on a downgrade review is premature and choose to ignore Moody’s review. We consider VIETNM 24s as one of the more liquid USD sovereign bonds out of Vietnam, VIETNM 24s (at the yield to maturity of below 3% at the time of this report) were expensive against its similarly-rated peers (South Africa, Paraguay, and Azerbaijan) but we believe the bonds are already priced as a “BBB-“ credit on our expectation of a near-term positive rating pressure.</p><p>We also see VIETNM 24’s 10-bp sell-off on Moody’s action as overdone. The 10-bp widening is, however, not sufficient for us to recommend buying the bonds as the bonds remain fully valued. As such, we assign a <strong>NEUTRAL</strong> recommendation on VIETNM 24s.</p>

We see Vietnam Government International Bond (VIETNM GOVT)  as a “BB” credit with a positive rating pressure, following the path of Indonesia and the Philippines to an investment grade rating in the next 5 years on improving macroeconomic fundamentals. The US-China trade war led capital flow into Vietnam from China, in particular, to avoid the US tariff. Vietnam remains a communist country but we see political stability as one of the main catalysts for Vietnam to continue drawing foreign direct investments. We also see it as a place for opportunities where investors can earn alpha on an improving macro picture in an era of widespread geopolitical risk.We believe Moody’s decision to put Vietnam’s “Ba3” senior unsecured debt rating on a downgrade review is premature and choose to ignore Moody’s review. We consider VIETNM 24s as one of the more liquid USD sovereign bonds out of Vietnam, VIETNM 24s (at the yield to maturity of below 3% at the time of this report) were expensive against its similarly-rated peers (South Africa, Paraguay, and Azerbaijan) but we believe the bonds are already priced as a “BBB-“ credit on our expectation of a near-term positive rating pressure.We also see VIETNM 24’s 10-bp sell-off on Moody’s action as overdone. The 10-bp widening is, however, not sufficient for us to recommend buying the bonds as the bonds remain fully valued. As such, we assign a NEUTRAL recommendation on VIETNM 24s.

Vietnam: Still Primed for Investment Grade

Vietnam

Vietnam Government International Bond (VIETNM GOVT)

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Vietnam Government International Bond (VIETNM GOVT)

Bondcritic Market Monitor (14-Oct): Improving Risk Apetite

2/10 UST spread remains in double–digit, and the 10-year treasury yield rose about 20 bps in a week, indicating risk appetite in the market, on a...

Bondcritic

The Week That Was in ASEAN@Smartkarma - Digital Microlending, Central Retail, and Ayala Corp

Macro Insights In More Demos Due / Minister Stabbed / Tax Shortfall / Discord Re Labor Law / Amendments Overhang, Kevin O’Rourke comments on the...

Angus Mackintosh

Vietnam: Still Primed for Investment Grade

We see Vietnam Government International Bond (VIETNM GOVT) as a “BB” credit with a positive rating pressure, following the path of Indonesia and...

Bondcritic

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52-week Range

Market Cap (USDm)

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