SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

<ul><li>SGX welcomes 5 new Thai SDRs which allow investors to trade Thai blue-chip companies in the same way they would trade stocks listed in Singapore.</li><li>The 5 new SDRs are Advanced Info Service (SGX SDR stock code: TADD), Delta Electronics (TDED), Gulf Energy Development (TGED), Kasikornbank (TKKD) and Siam Cement Group (TSCD).</li><li>In total, the 8 Thai SDRs cover more than 40% of the SET50 benchmark and each of the 8 SDRs represent a different sector.</li></ul>

SGX welcomes 5 new Thai SDRs which allow investors to trade Thai blue-chip companies in the same way they would trade stocks listed in Singapore.The 5 new SDRs are Advanced Info Service (SGX SDR stock code: TADD), Delta Electronics (TDED), Gulf Energy Development (TGED), Kasikornbank (TKKD) and Siam Cement Group (TSCD).In total, the 8 Thai SDRs cover more than 40% of the SET50 benchmark and each of the 8 SDRs represent a different sector.

Expanded suite of 8 Thai SDRs tracking over 40% of Thailand’s SET50 Index

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

<ul>
<li>Krung Thai is our value pick among Thai banks, having solid post-provision profitability, close to double digit ROE with a healthy balance sheet, along with undemanding PBV and PE ratios</li>
<li>We maintain Kasikorn on the buy list, as its cost of risk was well contained in 1Q24, a key positive catalyst for its improving post-provision returns</li>
<li>Bank of Thailand is currently accepting applications for digital banking licenses until 19 September 2024; incumbent banks and domestic big corporates are likely to form the core of applicants</li>
</ul>


Krung Thai is our value pick among Thai banks, having solid post-provision profitability, close to double digit ROE with a healthy balance sheet, along with undemanding PBV and PE ratios
We maintain Kasikorn on the buy list, as its cost of risk was well contained in 1Q24, a key positive catalyst for its improving post-provision returns
Bank of Thailand is currently accepting applications for digital banking licenses until 19 September 2024; incumbent banks and domestic big corporates are likely to form the core of applicants


Thai Banks 1Q24 Screener; We Stick with Krung Thai for Best Value, Kasikorn for Positive Catalysts

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.

Thematic (Sector/Industry)

<ul><li>The strong showing of economic data from the US for the first three months of 2024 has spurred bets that the Federal Reserve’s is going to delay cutting rates towards the latter half of this year.</li><li>The narrative surrounding ‘imminent’ rate cuts that dominated market perception near the end of last year has been thwarted by the Fed’s chair Jerome Powell suggesting that rates are likely to remain elevated, without the market completely discounting the possibility of further rate hikes.</li><li>The immediate fallout from the higher-than-expected March inflation figures led to a systematic drop in Asian currencies, especially for some ASEAN based currencies, such as the Malaysian Ringgit, that have already been embattled by weakening currency against the dollar since the start of this year.</li></ul>

The strong showing of economic data from the US for the first three months of 2024 has spurred bets that the Federal Reserve’s is going to delay cutting rates towards the latter half of this year.The narrative surrounding ‘imminent’ rate cuts that dominated market perception near the end of last year has been thwarted by the Fed’s chair Jerome Powell suggesting that rates are likely to remain elevated, without the market completely discounting the possibility of further rate hikes.The immediate fallout from the higher-than-expected March inflation figures led to a systematic drop in Asian currencies, especially for some ASEAN based currencies, such as the Malaysian Ringgit, that have already been embattled by weakening currency against the dollar since the start of this year.

Strong ASEAN Banks Poised Well to Face Uncertain Rate Outlook

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bangkok-bank-public-co-ltd" target="_blank" data-smartkarma-citation="entities:213:1" rel="noopener">Bangkok Bank Public (BBL TB)</a> is trading very close to its historic highs versus <a href="https://www.smartkarma.com/entities/kasikornbank-pcl" target="_blank" data-smartkarma-citation="entities:293:1" rel="noopener">Kasikornbank PCL (KBANK TB)</a> and keeps hitting a wall at that level.</li>
<li>The number of NVDRs issued on <a href="https://www.smartkarma.com/entities/bangkok-bank-public-co-ltd" target="_blank" data-smartkarma-citation="entities:213:1" rel="noopener">Bangkok Bank Public (BBL TB)</a> has been rangebound while there has been a steady decrease for <a href="https://www.smartkarma.com/entities/kasikornbank-pcl" target="_blank" data-smartkarma-citation="entities:293:1" rel="noopener">Kasikornbank PCL (KBANK TB)</a>. </li>
<li>At current level, the risk/reward looks favourable to a short <a href="https://www.smartkarma.com/entities/bangkok-bank-public-co-ltd" target="_blank" data-smartkarma-citation="entities:213:1" rel="noopener">Bangkok Bank Public (BBL TB)</a> / long <a href="https://www.smartkarma.com/entities/kasikornbank-pcl" target="_blank" data-smartkarma-citation="entities:293:1" rel="noopener">Kasikornbank PCL (KBANK TB)</a> position for the near to medium term.</li>
</ul>



Bangkok Bank Public (BBL TB) is trading very close to its historic highs versus Kasikornbank PCL (KBANK TB) and keeps hitting a wall at that level.
The number of NVDRs issued on Bangkok Bank Public (BBL TB) has been rangebound while there has been a steady decrease for Kasikornbank PCL (KBANK TB). 
At current level, the risk/reward looks favourable to a short Bangkok Bank Public (BBL TB) / long Kasikornbank PCL (KBANK TB) position for the near to medium term.


ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/toa-paint-thailand-pcl" target="_blank" data-smartkarma-citation="entities:24235:1" rel="noopener">TOA Paint</a> is Thailand's leading decorative paints player with a 48% market share and a good track record but it has become caught up by association with <a href="https://www.smartkarma.com/entities/stark-corporation-public-company-limited" target="_blank" data-smartkarma-citation="entities:6337:1" rel="noopener">STARK Corporation</a>.</li>
<li>This looks like a guilt by association sell down given there are no visible business connections between <a href="https://www.smartkarma.com/entities/stark-corporation-public-company-limited" target="_blank" data-smartkarma-citation="entities:6337:1" rel="noopener">STARK</a> and <a href="https://www.smartkarma.com/entities/toa-paint-thailand-pcl" target="_blank" data-smartkarma-citation="entities:24235:1" rel="noopener">TOA Paint</a> but the eldest son of the family controls Stark.</li>
<li>The second son of the Patriarch is CEO of <a href="https://www.smartkarma.com/entities/toa-paint-thailand-pcl" target="_blank" data-smartkarma-citation="entities:24235:1" rel="noopener">TOA Paint</a>, which is otherwise enjoying a strong recovery in demand plus lower input costs. Valuations have declined to attractive levels. </li>
</ul>



TOA Paint is Thailand's leading decorative paints player with a 48% market share and a good track record but it has become caught up by association with STARK Corporation.
This looks like a guilt by association sell down given there are no visible business connections between STARK and TOA Paint but the eldest son of the family controls Stark.
The second son of the Patriarch is CEO of TOA Paint, which is otherwise enjoying a strong recovery in demand plus lower input costs. Valuations have declined to attractive levels. 


TOA Paint (Thailand) (TOA TB) - An Unfortunate Turn of Events

Thailand

Kasikornbank Public Company Limited provides commercial banking services including personal and commercial banking, international trade, as well as investment banking services, to its customers throughout Thailand.  The Bank has foreign branches in Los Angeles, Hong Kong, Cayman Islands, and Shenzhen; and representative offices in Shanghai, Beijing, and Kunmin.

Kasikornbank (KBANK-R TB)

Expanded suite of 8 Thai SDRs tracking over 40% of Thailand’s SET50 Index

SGX welcomes 5 new Thai SDRs which allow investors to trade Thai blue-chip companies in the same way they would trade stocks listed in...

Singapore Exchange Ltd (SGX)

Thai Banks 1Q24 Screener; We Stick with Krung Thai for Best Value, Kasikorn for Positive Catalysts

Krung Thai is our preferred pick for its value for healthy return, solid capital ratio with Kasikornbank continuing to deliver on improving...

Victor Galliano

Strong ASEAN Banks Poised Well to Face Uncertain Rate Outlook

The strong showing of economic data from the US for the first three months of 2024 has spurred bets that the Federal Reserve’s is going to delay...

Criat

BBL/KBANK: Hitting a Wall

BBL has outperformed KBANK over the last year. The price ratio is now close to the highs and BBL has been selling off around there. Both stocks are...

Brian Freitas

TOA Paint (Thailand) (TOA TB) - An Unfortunate Turn of Events

TOA Paint is Thailand's leading decorative paints player, with a good track record but has been sold off due to its association with beleaguered...

Angus Mackintosh

Expanded suite of 8 Thai SDRs tracking over 40% of Thailand’s SET50 Index

SGX welcomes 5 new Thai SDRs which allow investors to trade Thai blue-chip companies in the same way they would trade stocks listed in...

Singapore Exchange Ltd (SGX)

Thai Banks 1Q24 Screener; We Stick with Krung Thai for Best Value, Kasikorn for Positive Catalysts

​Krung Thai is our preferred pick for its value for healthy return, solid capital ratio with Kasikornbank continuing to deliver on improving...

Victor Galliano

Strong ASEAN Banks Poised Well to Face Uncertain Rate Outlook

The strong showing of economic data from the US for the first three months of 2024 has spurred bets that the Federal Reserve’s is going to delay...

Criat

BBL/KBANK: Hitting a Wall

BBL has outperformed KBANK over the last year. The price ratio is now close to the highs and BBL has been selling off around there. Both stocks are...

Brian Freitas

TOA Paint (Thailand) (TOA TB) - An Unfortunate Turn of Events

TOA Paint is Thailand's leading decorative paints player, with a good track record but has been sold off due to its association with beleaguered...

Angus Mackintosh

Krung Thai is our preferred pick for its value for healthy return, solid capital ratio with Kasikornbank continuing to deliver on improving...