In today’s briefing:
- Bond Market Monitor: Bonds Are Back
- JPX-Nikkei 400 Rebal 2023: End-Dec 2022
- Bank Negara Indonesia (BBNI IJ) – Time to Play Catch Up?
- Radiant Cash Management IPO: A Bland Mix
- Mitsubishi arm injects US$200M investment into digital finance platform Akulaku
Bond Market Monitor: Bonds Are Back
- 10 months + since Russia invaded Ukraine and there is yet no end to the war in sight.
- The negative 2/10 spread generates quite a conviction by almost all of market participants that the world is heading into recession next year.
- We believe inflation could slow down and the on-going rate hikes may end faster than expected. Slower/smaller than expected rate hikes provide a bullish case for bond investments in 2023..
JPX-Nikkei 400 Rebal 2023: End-Dec 2022
- JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
- A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.
- Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2023 based on trading data as of end-December 2022.
Bank Negara Indonesia (BBNI IJ) – Time to Play Catch Up?
- Bank Negara Indonesia (BBNI IJ) has been a perennial underdog in terms of valuations versus its peers but as its ROE and ROA converge with those peers it should rerate.
- The bank’s 3Q2022 reflected the changing shape of its loan portfolio towards higher-quality and lower-risk exposure in corporate loans and tier 1 clients’ value chain, KUR, and payroll loans.
- BNI management is cautiously optimistic about the outlook for FY2023 in terms of loan growth and credit quality. Valuations remain attractive and ROEs may rise faster than consensus estimates.
Radiant Cash Management IPO: A Bland Mix
- Radiant Cash Management Services (1926794D IN) has come up with INR 3.9 bn IPO which includes fresh issue to the tune of INR 600 mn.
- In spite of being one of the largest players in the retail cash management segment, there are few cautions one must take note of.
- These primarily include related party transactions with promoters, concentration risk and few industry related restraints
Mitsubishi arm injects US$200M investment into digital finance platform Akulaku
- Indonesia-based banking and digital finance platform Akulaku has secured a US$200 million investment from Japanese megabank Mitsubishi UFJ Financial Group (MUFG).
- The investment will support its expansion of banking services across Southeast Asia, including underserved customers and markets.
- The company’s future growth plans align with MUFG’s, and their joint expansion into new territories, markets, and products will accelerate heading into 2023.
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