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

Cross Asset Strategy

<ul>
<li>The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across South East Asia.</li>
<li>The past week saw insights on <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd</a> on news of lay-offs, Thai Life IPO, <a href="https://www.smartkarma.com/entities/erajaya-swasembada-tbk-pt" target="_blank" data-smartkarma-citation="entities:18869:1" rel="noopener">Erajaya Swasembada</a>, <a href="https://www.smartkarma.com/entities/thomson-medical-group-limited" target="_blank" data-smartkarma-citation="entities:8495:1" rel="noopener">Thomson Medica</a>, <a href="https://www.smartkarma.com/entities/surya-citra-media-pt-tbk" target="_blank" data-smartkarma-citation="entities:14739:1" rel="noopener">PT Surya Citra Media,</a> and <a href="https://www.smartkarma.com/entities/kiatnakin-bank-pcl" target="_blank" data-smartkarma-citation="entities:299:1" rel="noopener">Kiatnakin Bank (KKP TB).</a>
</li>
<li>We also saw a list of top ASEAN Picks from <a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr Andrew Stotz</a> highlighting his top 14 picks and an update on <a href="https://www.smartkarma.com/entities/carabao-group-pcl" target="_blank" data-smartkarma-citation="entities:12027:1" rel="noopener">Carabao Group</a> as a recovery proxy. </li>
</ul>


The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across South East Asia.
The past week saw insights on Sea Ltd on news of lay-offs, Thai Life IPO, Erajaya Swasembada, Thomson Medica, PT Surya Citra Media, and Kiatnakin Bank (KKP TB).

We also saw a list of top ASEAN Picks from Dr Andrew Stotz highlighting his top 14 picks and an update on Carabao Group as a recovery proxy. 


The Week That Was in ASEAN@Smartkarma - Sea Ltd Lay-Offs, SCMA, and Kiatnakin Bank

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

Equity Bottom-Up

<ul>
<li>This smaller Thai bank can more easily grow due to relatively small loan base</li>
<li>Strong core fundamentals of rising interest income and falling funding costs</li>
<li>Credit costs remain inflated, falling figures can support strong ROA growth</li>
</ul>


This smaller Thai bank can more easily grow due to relatively small loan base
Strong core fundamentals of rising interest income and falling funding costs
Credit costs remain inflated, falling figures can support strong ROA growth


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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

The Stock Exchange of Thailand (SET) has commenced a market consultation on changing the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">Stock Exchange of Thailand SET 50 Index (SET50 INDEX)</a>, SET100 and SETHD indices to free float market cap weighted indices from the upcoming rebalance in June.The market consultation document is short on detail, but the main points are the change in index calculation from full market cap weighted to free float market cap weighted, implementation of the changes in two tranches at the June and December reviews, and implementation of quarterly changes in free float for moves of +/-5%.The biggest uncertainty for us is whether the selection of the stocks for inclusion/exclusion will use the full market cap or the free float market cap.Using the full market cap for stock selection could see 3 changes at the upcoming June review, while using free float market cap for stock selection could result in up to 6 changes at the review. The two step implementation of the free float changes will dampen the index turnover but it will still be relatively high, ranging from a one-way turnover of 7.8% for changes in free float only to 9.52% if the stock selection methodology uses free float market cap.In this Insight, we look at the proposed changes and enumerate three scenarios, the changes they will entail, the impact on the stocks and the turnover for each scenario.

The Stock Exchange of Thailand (SET) has commenced a market consultation on changing the Stock Exchange of Thailand SET 50 Index (SET50 INDEX), SET100 and SETHD indices to free float market cap weighted indices from the upcoming rebalance in June.The market consultation document is short on detail, but the main points are the change in index calculation from full market cap weighted to free float market cap weighted, implementation of the changes in two tranches at the June and December reviews, and implementation of quarterly changes in free float for moves of +/-5%.The biggest uncertainty for us is whether the selection of the stocks for inclusion/exclusion will use the full market cap or the free float market cap.Using the full market cap for stock selection could see 3 changes at the upcoming June review, while using free float market cap for stock selection could result in up to 6 changes at the review. The two step implementation of the free float changes will dampen the index turnover but it will still be relatively high, ranging from a one-way turnover of 7.8% for changes in free float only to 9.52% if the stock selection methodology uses free float market cap.In this Insight, we look at the proposed changes and enumerate three scenarios, the changes they will entail, the impact on the stocks and the turnover for each scenario.

SET50 Index - Proposed Methodology Changes: Scenarios, Names Affected & Impact

Thematic (Sector/Industry)

Thai banks are leveraged to re-opening the country to tourism. They are also leveraged to a newly proposed NPL warehouse scheme.  Where re-opening and NPL warehouse move in tandem, Thai banks can be golden.

Thai banks are leveraged to re-opening the country to tourism. They are also leveraged to a newly proposed NPL warehouse scheme.  Where re-opening and NPL warehouse move in tandem, Thai banks can be golden.

There are many banks globally that have restricted dividends. This is less apparent in Asia. Even so, we are less concerned with temporary deferment or postponement on dividends, as economies reopen and recover.  Their reinstatement will only be an additional positive delta alongside likely lower credit costs. In Asia, there are many banks where yields are over 9% and where capital levels are high, suggesting dividends can remain in place and where many banks, have not deferred, or postponed dividends. When we remember that dividend restrictions were imposed in the more dire days of shutdown, well before the sharp recovery seen in many economies, it makes it even less likely that these restrictions will remain in place for long. And many banks in Asia, continue to pay dividends as normal.

There are many banks globally that have restricted dividends. This is less apparent in Asia. Even so, we are less concerned with temporary deferment or postponement on dividends, as economies reopen and recover.  Their reinstatement will only be an additional positive delta alongside likely lower credit costs. In Asia, there are many banks where yields are over 9% and where capital levels are high, suggesting dividends can remain in place and where many banks, have not deferred, or postponed dividends. When we remember that dividend restrictions were imposed in the more dire days of shutdown, well before the sharp recovery seen in many economies, it makes it even less likely that these restrictions will remain in place for long. And many banks in Asia, continue to pay dividends as normal.  

Thailand

Kiatnakin Bank Public Company Limited provides commercial banking services including commercial, developmental, consumer, hire-purchase, and mortgage financing to its customers in Thailand. The Company also provides securities brokerage and investment advisory services.

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Kiatnakin Bank (KKP TB)

The Week That Was in ASEAN@Smartkarma - Sea Ltd Lay-Offs, SCMA, and Kiatnakin Bank

The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity...

Angus Mackintosh

KKP - Small Enough To Grow

KKP remains well smaller than all the largest Thai banks, so can more easily grow. This is coming through in far better loan growth figures, even...

Daniel Tabbush

SET50 Index - Proposed Methodology Changes: Scenarios, Names Affected & Impact

The SET has commenced a market consultation on the proposed changes to make its indices free float market cap weighted. We look at the impact on...

Brian Freitas

Thai Banks – Golden

Thai banks are leveraged to a re-opening of the country to tourism and can benefit at the same time from a newly proposed NPL warehouse scheme.

Daniel Tabbush

Asia Banks – Oversized Dividends

There are many banks globally that have restricted dividends. This is less apparent in Asia. Even so, we are less concerned with temporary...

Daniel Tabbush

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