Product Marketing Manager, Criat

Raghav Chandra Mathur

Product Marketing Manager

Next-Generation Credit Analytics Provider

Criat

Criat specializes in new-generation data-driven credit analytics. Leveraging our industry-leading DeepCredit analytical technologies, we produce daily-updated forward-looking credit assessment and valuation to help financial institutions stay ahead of risks. Coupled with use-case-driven applications, we extract insights, answer questions and enable smarter credit decisions.

Cross Asset Strategy

<ul><li>The ASEAN banking sector’s credit profile has experienced differing credit trends post the COVID-19 pandemic.</li><li>Although the initial recovery in the credit profile of the region’s banking sector post- pandemic can be attributed to the fiscal and monetary support provided to both financial and non-financial corporate by local governments, more recent credit trends suggest that macroeconomic challenges, which include higher- for-longer interest rates amidst high domestic inflation and lagging economic growth, have led to diverging trends to recovery within the bloc.</li><li>Immediate responses to the pandemic shock by major ASEAN economies’ governments aided in reducing the credit risk across the financial sector.</li></ul>

The ASEAN banking sector’s credit profile has experienced differing credit trends post the COVID-19 pandemic.Although the initial recovery in the credit profile of the region’s banking sector post- pandemic can be attributed to the fiscal and monetary support provided to both financial and non-financial corporate by local governments, more recent credit trends suggest that macroeconomic challenges, which include higher- for-longer interest rates amidst high domestic inflation and lagging economic growth, have led to diverging trends to recovery within the bloc.Immediate responses to the pandemic shock by major ASEAN economies’ governments aided in reducing the credit risk across the financial sector.

ASEAN Banks Walked Diverging Paths to Recovery Post-Pandemic

Cross-Asset Strategist & Quantitative Analyst, Pennock Idea Hub

Cam Hui

Cross-Asset Strategist & Quantitative Analyst

Pennock Idea Hub

We are creators of independent equity research. The Pennock Idea Hub team are veterans of the investment industry. Much of our team has spent their careers at Merrill Lynch, Deutsche Bank, RBC Capital Markets and Wood Gundy. We have taken every aspect of research back to the studs and returned to first principles. The Pennock Idea Hub marries the interests of the sell and buy side. 

We offer the best research for institutional investors by:

-Only publishing research from veteran analysts
-Eliminate the inherent conflicts of the traditional sell and buy side relationship
-Ensure our team is always accessible; collaboration with clients nurtures our collective success

Cross-Asset & Quantitative Research

<ul>
<li>The long-term structure of global markets is seeing a loss of leadership by U.S. equities and emerging new leadership in Europe.</li>
<li>The short-run outlook will depend on the results of earnings season.</li>
<li>Our base case calls for a choppy and range-bound market.Wait for the breakout, or breakdown.</li>
</ul>


The long-term structure of global markets is seeing a loss of leadership by U.S. equities and emerging new leadership in Europe.
The short-run outlook will depend on the results of earnings season.
Our base case calls for a choppy and range-bound market.Wait for the breakout, or breakdown.


Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

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

Macroeconomics

While the US was the epicentre of the world's first Covid wave (peaking in January 2021), and India the second (peaking in early-May 2021), the epicentre of the current third global Covid wave is ASEAN. While Indonesia was initially the worst hit, this wave has spread to Malaysia, Thailand and Vietnam (the latter two among the most successful in combatting Covid in 2020), with some scares in Singapore and the Philippines as well. ASEAN's real GDP is estimated to have grown over 10% YoY in 2Q 2021 (helped by a very depressed base from 2Q 2020) but the renewed Covid surge is set to weaken the economic recovery in 2H 2021. In July 2021, Indonesia has had more new Covid cases than any other nation globally. But the worst of Indonesia's Covid wave was reached on 18 July 2021 (at a 7-day moving average of 50,039 new daily infections), and these have since receded by nearly a fifth. The biggest hit will occur in 3Q 2021 growth, but Indonesia's real GDP should exceed 6% YoY in 4Q 2021, bringing full-year growth to about 5%. The worst-hit ASEAN economy (and polity) is Malaysia, where there have been 3 successive Covid waves in 2021, the last of which has not yet reached its peak. Consequently, the greatest economic and political uncertainty in 2H 2021 will be in Malaysia, which has the highest per capita Covid case load in South or South-east Asia (at 31,334 cases per million population). We expect real GDP to grow no more than 3% YoY in 2H 2021 despite a low base. Thailand and Vietnam, both extremely successful in containing Covid in 2020 (although Thailand's tourism-dependent economy nonetheless suffered a severe hit from the drying-up of tourist arrivals) are now seeing their first wave of Covid infections, in July 2021. The peak of the current Covid wave is not yet detectable in either country. Vietnam's Covid wave is concentrated in the south (Ho Chi Minh City and surrounding provinces), but Thailand's is concentrated around the main economic centre, Bangkok, and its surrounding provinces. However, the base effect is more helpful in Thialand than Vietnam (the latter having continued to grow in all four quarters of 2020), so we expect Vietnam's real GDP to grow 5% YoY and Thailand's 5-6% YoY in 2H 2021. Despite a major alarm being raised in Singapore as well, the latest Covid wave is very mild in the island-republic, and real GDP in Singapore is consequently likely to grow 7.2% in 2021.

While the US was the epicentre of the world's first Covid wave (peaking in January 2021), and India the second (peaking in early-May 2021), the epicentre of the current third global Covid wave is ASEAN. While Indonesia was initially the worst hit, this wave has spread to Malaysia, Thailand and Vietnam (the latter two among the most successful in combatting Covid in 2020), with some scares in Singapore and the Philippines as well. ASEAN's real GDP is estimated to have grown over 10% YoY in 2Q 2021 (helped by a very depressed base from 2Q 2020) but the renewed Covid surge is set to weaken the economic recovery in 2H 2021. In July 2021, Indonesia has had more new Covid cases than any other nation globally. But the worst of Indonesia's Covid wave was reached on 18 July 2021 (at a 7-day moving average of 50,039 new daily infections), and these have since receded by nearly a fifth. The biggest hit will occur in 3Q 2021 growth, but Indonesia's real GDP should exceed 6% YoY in 4Q 2021, bringing full-year growth to about 5%. The worst-hit ASEAN economy (and polity) is Malaysia, where there have been 3 successive Covid waves in 2021, the last of which has not yet reached its peak. Consequently, the greatest economic and political uncertainty in 2H 2021 will be in Malaysia, which has the highest per capita Covid case load in South or South-east Asia (at 31,334 cases per million population). We expect real GDP to grow no more than 3% YoY in 2H 2021 despite a low base. Thailand and Vietnam, both extremely successful in containing Covid in 2020 (although Thailand's tourism-dependent economy nonetheless suffered a severe hit from the drying-up of tourist arrivals) are now seeing their first wave of Covid infections, in July 2021. The peak of the current Covid wave is not yet detectable in either country. Vietnam's Covid wave is concentrated in the south (Ho Chi Minh City and surrounding provinces), but Thailand's is concentrated around the main economic centre, Bangkok, and its surrounding provinces. However, the base effect is more helpful in Thialand than Vietnam (the latter having continued to grow in all four quarters of 2020), so we expect Vietnam's real GDP to grow 5% YoY and Thailand's 5-6% YoY in 2H 2021. Despite a major alarm being raised in Singapore as well, the latest Covid wave is very mild in the island-republic, and real GDP in Singapore is consequently likely to grow 7.2% in 2021.  

ASEAN as Epicentre of the Covid Crisis: Malaysia Worst Off, Indonesia Improving

Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Thematic (Sector/Industry)

*Yield Steepening Likely Leads To FRB Action: The recent turmoil in the US bond market has now led to expectations that the Federal Reserve Board (FRB) may announce interest rate policy tweaks as soon as its next meeting on March 16th. The FRB appears to seek inflation, and the question would appear to be when (not if) the FRB will become more aggressive in preventing the long end of the curve from further steepening; and*Watch Your Financial Positions: Coupled with a rapid economic recovery  - especially given the US lead with vaccination rollouts, the steep yield curve has led to YTD US financial sector outperformance. However, if the FRB begins flattening the yield curve, sentiment is likely to quickly turn. As such, near-term caution for financials is likely warranted ahead of next FRB meeting as the recent bond market volatility is likely to force the FRB’s hand on Yield Curve Control (YCC).

*Yield Steepening Likely Leads To FRB Action: The recent turmoil in the US bond market has now led to expectations that the Federal Reserve Board (FRB) may announce interest rate policy tweaks as soon as its next meeting on March 16th. The FRB appears to seek inflation, and the question would appear to be when (not if) the FRB will become more aggressive in preventing the long end of the curve from further steepening; and*Watch Your Financial Positions: Coupled with a rapid economic recovery  - especially given the US lead with vaccination rollouts, the steep yield curve has led to YTD US financial sector outperformance. However, if the FRB begins flattening the yield curve, sentiment is likely to quickly turn. As such, near-term caution for financials is likely warranted ahead of next FRB meeting as the recent bond market volatility is likely to force the FRB’s hand on Yield Curve Control (YCC).

Federal Reserve Board – Doing The Twist

*A Market With Little Discipline: Too many market participants have very little discipline, and to make matters worse, central banks have been all too happy to remove the moral hazard involved with excessive risk taking. This has resulted in the creation of a giant vortex of liquidity which could be as large as USD 1 quadrillion;*Broken Credit Ratings Agency Model: In our view, the credit ratings agency model is permanently broken as waterfall risks in various rated pools and tranches have become increasingly significant with the markets unable to self-regulate and regulators either unable to regulate (or told not to regulate);  and*SEC Far From Being Aggressive With Enforcement: In reality, the fines paid by Kroll/DBRS are not even a drop in the bucket compared with the USD 1.5 bn and USD 864 mn fines paid by S&amp;P (MH) and Moody's (MCO.US), respectively, to settle similar charges associated with the GFC. Whether this reflects more of a lower level of violations or a much less aggressive SEC regulator can be debated. It will be interesting to see is whether these investigations are expanded to include 2018-19 deals which appear to have even greater conflicts - particularly under Biden administration.

*A Market With Little Discipline: Too many market participants have very little discipline, and to make matters worse, central banks have been all too happy to remove the moral hazard involved with excessive risk taking. This has resulted in the creation of a giant vortex of liquidity which could be as large as USD 1 quadrillion;*Broken Credit Ratings Agency Model: In our view, the credit ratings agency model is permanently broken as waterfall risks in various rated pools and tranches have become increasingly significant with the markets unable to self-regulate and regulators either unable to regulate (or told not to regulate);  and*SEC Far From Being Aggressive With Enforcement: In reality, the fines paid by Kroll/DBRS are not even a drop in the bucket compared with the USD 1.5 bn and USD 864 mn fines paid by S&amp;P (MH) and Moody's (MCO.US), respectively, to settle similar charges associated with the GFC. Whether this reflects more of a lower level of violations or a much less aggressive SEC regulator can be debated. It will be interesting to see is whether these investigations are expanded to include 2018-19 deals which appear to have even greater conflicts - particularly under Biden administration. 

United States

iShares MSCI Singapore ETF is an exchange-traded fund incorporated in the USA. The ETF's objective seeks to provide investment results that correspond to the performance of the Singaporean market, as measured by the MSCI Singapore 25/50 Index. The ETF invests in a representative sample of index stocks using a "portfolio sampling" technique. SGX Trading Name: IS MSCI SIN 100US$

iShares MSCI Singapore ETF (EWS US)

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