Daily Brief Financials: ICICI Bank Ltd, Country Garden Holdings Co, Bank Negara Indonesia Persero, IP Group PLC and more

• The HDFC Bank (HDFCB IN) / HDFC Limited (HDFC IN) merger will result in capping and funding changes on the Nifty Bank Index (NSEBANK INDEX) constituents.
• We estimate one-way turnover of around 8.4% resulting in a one-way trade of INR 21,865m (US$266m) at the time of merger implementation.
• The impact in terms of ADV is less than 1x on all stocks, but the impact in terms of delivery volume is higher than 1x on a few stocks.

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
• Country Garden Holdings Co
• Wynn Macau Ltd

• We rate Bank Negara as our top pick for its deep value attributes of low PE multiples and PEG ratio relative to sound returns and strong liquidity metrics
• We also recommend Bank Mandiri, for its premium returns and modest PE multiples; Bank Central Asia, albeit fully valued, has impressive liquidity and return metrics
• Bank Rakyat registered worsening returns in 1Q23, with pre-provision returns declining again QoQ and cost of risk rising; its loan mix implies a high structural cost of risk going forward

We consider IP Group a compelling healthcare play with 31% of its end-2022 portfolio invested in life sciences companies, or 47% including Oxford Nanopore Technologies (ONT). These investments provide exposure to drugs developed for a variety of indications, including different types of cancer, autoimmune diseases (eg rheumatoid arthritis), as well as respiratory and kidney diseases. Investors may benefit from the platform established by management over the past decade and nurtured over many years, with nine life sciences companies expected to deliver major data over the next 24 months or so. Exposure to IP Group’s innovative portfolio is now available at a wide discount to NAV of c 60%.