HK/China Equity Long-Short

Osbert Tang, CFA

Osbert Tang is an equity analyst with over 20 years of experience with focuses on China transport, infrastructure, industrials and utilities sectors. He has been based in Shanghai since 2003, accumulated nearly 20 years of on-ground knowledge on the Chinese economy and financial markets, and has a wealth of contacts with China corporates and government entities. 

Osbert has received votes from top-tier institutional investors and has been a highly-ranked transport and infrastructure analyst in the Asiamoney, Institutional Investors and Greenwich surveys. In addition to his extensive experience with international investment banks including RBS, ABN AMRO (both served as Shanghai Chief Representative), Paribas Asia Equity, Maybank Kim Eng and DBS Securities, he has been a senior analyst with Moody’s Investors Service with focus on ratings of China infrastructure and related LGFV issuers. He has also worked in the area of strategic development at Sun Hung Kai Properties Limited. 

Osbert holds a BBA from the Chinese University of Hong Kong, an MBA from the University of Texas at Austin and a MSSc in Applied Psychology from the City University of Hong Kong. He was accredited with the CFA charter in 1997, and is a member of both British Psychological Society and Hong Kong Psychological Society.

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Credit

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<p>The coronavirus outbreak is expected to particularly hit the F&amp;B, retail, travel and transportation sectors in China. The loss of operating cash flow during this period of time will impair their financial strength in 2020 and weaken their credit quality.  A survey of SMEs showed that many of them do not have more than 2 months of cash on hand to sustain their businesses. We expect default rate for China's onshore bond to rise in this year, and we prefer to stick to quality issues.</p><p>We have already seen the early approval of local government bond quota in this year by the Ministry of Finance, amounting to Rmb1.848trn. Going into 2H2020, we expect more bond issuance to support the revival of the economy, particularly for the financing fixed asset investment in infrastructure. </p>

The coronavirus outbreak is expected to particularly hit the F&amp;B, retail, travel and transportation sectors in China. The loss of operating cash flow during this period of time will impair their financial strength in 2020 and weaken their credit quality.  A survey of SMEs showed that many of them do not have more than 2 months of cash on hand to sustain their businesses. We expect default rate for China's onshore bond to rise in this year, and we prefer to stick to quality issues.We have already seen the early approval of local government bond quota in this year by the Ministry of Finance, amounting to Rmb1.848trn. Going into 2H2020, we expect more bond issuance to support the revival of the economy, particularly for the financing fixed asset investment in infrastructure. 

China Onshore Credit: Default Rate to Rise on Coronavirus Outbreak?