Daily Brief Financials: Hong Kong Hang Seng Index, S&P 500 INDEX, China SCE, Alam Sutera Realty, Blackrock Inc, KKR & Co Inc, American Express Co and more

• Hong Kong is the weak link in Asia to short. Bear wedge set to break lower after the rally failed under the 21,000 sell resistance. Similar fate for the A50.
• ASX met sub 7,400 zone to trim. Korea 327 sell zone, starting to unwind. NKY 28,300-500 sell zone at hand.
• A number of markets are approaching sell levels in Asia and Europe. Does the SPX rise may fall short of 4,200? Third week in April is when bull energy dissipates.

• Compelling intraday reversal that kissed 4,177. Concern over an early fade below 4,200 was justified and formed a dual top. Fade below 4,165 was negative and used to sell.
• Growth concerns overshadowing lower inflation (transitioning) and this is a theme that we expect will expand over the summer along with the next round of bank failures/ripples and systemic risk. 
• Cycle: May/June a more negative cycle. Second half of April is when bull energy dissipates and starts the turning process.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Central China Securities
• China SCE
• Sino-Ocean Service
• Softbank Group
• Vedanta Resources

Alam Sutera’s (ASRI) FY 2022 results were surprisingly strong, particularly the Q4 numbers. We note the opportunistic nature of the company’s tender offer (at a discount) for its USD 2024 notes. Instead of reassuring noteholders of its improving performance, ASRI opted to take advantage of the market, apparently a typical move among Indonesian HY issuers. The financial risk profile improved significantly and is now quite modest. It is also much better than suggested by the ratings from the agencies (Caa1 (negative) and B- (stable) from Moody’s and Fitch, respectively). Liquidity is sound. The debt maturity profile has been lengthened substantially, with minimal maturities until 2025 (when the USD 241 mn 2025 notes will mature).

We move our recommendation to “Buy” from “Hold” on the ASRIIJ 8.25 25, which is trading at 83/85, yielding 20%/19.5%. The company’s debt maturity profile has been significantly extended following the tender offer in Q4/22, with minimal debt to mature before the 2025 notes. This could give ASRI time to weather the impending downturn. We foresee that the company will continue generating positive FCF, due to its low-cost land bank and high-margin sales of land lots.

• This is our first report on one of the largest asset managers, BlackRock.
• While the market situation in 2022 was among the most difficult years, BlackRock delivered decent organic growth and ended the year with an all-around beat.
• The company generated $300 billion in total net inflows in 2022, which led the industry, and experienced positive organic base fee growth.

• This is our first report on a global investment behemoth, KKR & Co.
• Inc.
• The company delivered strong set of quarterly results surpassing Wall Street expectations on all fronts.

• This is our first report on American Express, one of the world’s largest integrated payment companies.
• The company continued the upward trend in Card Member spending, engagement, and retention in the fourth quarter.
• We initiate coverage on the stock of the American Express Company with a ‘Hold’ rating.