Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.<ul><li><a href='#lucror-entity-198'>Reliance Industries</a></li></ul>

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.Reliance Industries

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Reliance Industries / Equity Capital Markets

<ul>
<li>In this note, we will take a look at the Asia Pacific IPO pipeline for 2024, following up with India after having looked at Hong Kong earlier.</li>
<li>This list has been compiled on a best effort basis from tracking the company filings and through various other sources.</li>
<li>The deals you see in this note are only a part of our full IPO pipeline tracker. Feel free to drop us a message for additional information on these IPOs.</li>
</ul>


In this note, we will take a look at the Asia Pacific IPO pipeline for 2024, following up with India after having looked at Hong Kong earlier.
This list has been compiled on a best effort basis from tracking the company filings and through various other sources.
The deals you see in this note are only a part of our full IPO pipeline tracker. Feel free to drop us a message for additional information on these IPOs.


Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Thematic (Sector/Industry)

Energy is a lightly held sector, a bit part player in a world dominated by Tech, Financials and the EM Consumer.  The average holding weight among the active EM funds in our analysis stands at just 3.81%, underweight the benchmark by -2.11% on average.The fact that nearly a quarter of active EM managers have no exposure to the Energy sector is perhaps the most telling statistic of just how under-owned the sector is.  Part of that reason, we believe, lies in the risk of not holding Energy when index weights are so low. With Oil prices at multi-year highs, the Energy sector has started to outperform in a big way, with EM Energy outperforming the broader MSCI EM index by over 30% over the last 12 months.  With just 22.7% of funds overweight the benchmark, active EM managers are feeling the pinch.  The risk of being underweight or avoiding the sector completely has moved significantly higher.One of the factors that has driven Energy to the margins of EM investment is the rise of secular growth opportunities in Technology, Consumer Discretionary and Communication Services.  Indeed, the current investor base in Energy is heavily skewed towards the Value and Yield end of the spectrum.  Instead, Aggressive Growth managers have rotated towards the secular growth opportunities within Packaged Software, Internet Retail, Biotechnology and Internet Software/Services.Can the lure of a cyclical growth opportunity such as Energy be enough to win back investment from Growth investors?  If Energy keeps outperforming it will undoubtedly push Growth investors to look for opportunities within the sector.  We identify 2 stocks that already have an investor base among both Aggressive Growth and Growth funds, whilst also appealing to Value investors.  As such, we would expect both to be on the shortlist of the many underweights and non-investors looking to ramp up allocations in the Energy sector as we shift to a new ownership regime.Analysis taken from our EM research, covering 247 active GEM funds with combined AUM of $500bn

Energy is a lightly held sector, a bit part player in a world dominated by Tech, Financials and the EM Consumer.  The average holding weight among the active EM funds in our analysis stands at just 3.81%, underweight the benchmark by -2.11% on average.The fact that nearly a quarter of active EM managers have no exposure to the Energy sector is perhaps the most telling statistic of just how under-owned the sector is.  Part of that reason, we believe, lies in the risk of not holding Energy when index weights are so low. With Oil prices at multi-year highs, the Energy sector has started to outperform in a big way, with EM Energy outperforming the broader MSCI EM index by over 30% over the last 12 months.  With just 22.7% of funds overweight the benchmark, active EM managers are feeling the pinch.  The risk of being underweight or avoiding the sector completely has moved significantly higher.One of the factors that has driven Energy to the margins of EM investment is the rise of secular growth opportunities in Technology, Consumer Discretionary and Communication Services.  Indeed, the current investor base in Energy is heavily skewed towards the Value and Yield end of the spectrum.  Instead, Aggressive Growth managers have rotated towards the secular growth opportunities within Packaged Software, Internet Retail, Biotechnology and Internet Software/Services.Can the lure of a cyclical growth opportunity such as Energy be enough to win back investment from Growth investors?  If Energy keeps outperforming it will undoubtedly push Growth investors to look for opportunities within the sector.  We identify 2 stocks that already have an investor base among both Aggressive Growth and Growth funds, whilst also appealing to Value investors.  As such, we would expect both to be on the shortlist of the many underweights and non-investors looking to ramp up allocations in the Energy sector as we shift to a new ownership regime.Analysis taken from our EM research, covering 247 active GEM funds with combined AUM of $500bn

Trung Nguyen

We view Reliance Industries (RIL) as "Low Risk" on the LARA scale. This is driven by the company's: [1] large scale, leading position and diversified business portfolio; [2] strong track record of execution; as well as [3] modest credit metrics (Net Debt/EBITDA of c. 1x) and sound liquidity. There is a strong diversification effect from RIL's three key segments (Oil to Chemicals, Digital Services and Retail), each of which is a market leader. The company raised substantial capital in FY 2020-21, FY 2021-22 and FY 2022-23 from partial stake sales of its key segments at very high valuations, resulting in a strong cash position.This will help RIL to grow and fund the persistent negative FCF. The key credit constraint is India's rating, as the company is already rated one notch higher than the sovereign. Our Credit Bias on RIL is "Stable", as the company's strong fundamentals and positive momentum in operations should partially offset the weaker outlook on India's sovereign rating. Controversies are "Immaterial". While RIL is subject to controversies and lawsuits (given that it is one of the largest conglomerates in India), the disputes are mainly commercial in nature instead of ESG-related. A former director of Dhirubhai Ambani Hospital reported various instances of financial irregularities, mismanagement and corporate governance failures at the hospital. RIL and Chairman Ambani were fined in 2007 for alleged manipulative trading in shares of related companies. RIL operates in the oil & gas industry, which is subject to scrutiny from environmental agencies, given the effects of fossil-fuel drilling on greenhouse gas (GHG) emissions and biodiversity in particular (the company has not reported any such incidents). There is also global pressure to move towards greener energy and reduce GHG emissions. RIL is focused on building a gas-based portfolio, which is cleaner than oil. We deem the ESG Impact on Credit as "Neutral".

  We view Reliance Industries (RIL) as "Low Risk" on the LARA scale. This is driven by the company's: [1] large scale, leading position and diversified business portfolio; [2] strong track record of execution; as well as [3] modest credit metrics (Net Debt/EBITDA of c. 1x) and sound liquidity. There is a strong diversification effect from RIL's three key segments (Oil to Chemicals, Digital Services and Retail), each of which is a market leader. The company raised substantial capital in FY 2020-21, FY 2021-22 and FY 2022-23 from partial stake sales of its key segments at very high valuations, resulting in a strong cash position.This will help RIL to grow and fund the persistent negative FCF. The key credit constraint is India's rating, as the company is already rated one notch higher than the sovereign.   Our Credit Bias on RIL is "Stable", as the company's strong fundamentals and positive momentum in operations should partially offset the weaker outlook on India's sovereign rating.   Controversies are "Immaterial". While RIL is subject to controversies and lawsuits (given that it is one of the largest conglomerates in India), the disputes are mainly commercial in nature instead of ESG-related. A former director of Dhirubhai Ambani Hospital reported various instances of financial irregularities, mismanagement and corporate governance failures at the hospital. RIL and Chairman Ambani were fined in 2007 for alleged manipulative trading in shares of related companies. RIL operates in the oil & gas industry, which is subject to scrutiny from environmental agencies, given the effects of fossil-fuel drilling on greenhouse gas (GHG) emissions and biodiversity in particular (the company has not reported any such incidents). There is also global pressure to move towards greener energy and reduce GHG emissions. RIL is focused on building a gas-based portfolio, which is cleaner than oil. We deem the ESG Impact on Credit as "Neutral". 

Reliance Industries - Tear Sheet - Lucror Analytics

<ul>
<li>
<a href="https://www.smartkarma.com/entities/vodafone-idea-ltd" target="_blank" data-smartkarma-citation="entities:15678:1" rel="noopener">Vodafone Idea (IDEA IN)</a> plans to raise around US$2.2bn via a follow-on public offering.</li>
<li>The deal has been in the works for years and proceeds will be used for capex and short-term debt repayment.</li>
<li>In this note, we will run the deal through our ECM framework and talk about the deal dynamics.</li>
</ul>



Vodafone Idea (IDEA IN) plans to raise around US$2.2bn via a follow-on public offering.
The deal has been in the works for years and proceeds will be used for capex and short-term debt repayment.
In this note, we will run the deal through our ECM framework and talk about the deal dynamics.


Vodafone Idea Placement - Very Well Flagged but Its Not Going to Fix a Whole Lot of Issues

India

Reliance Industries Ltd. manufactures petrochemicals, synthetic fibers, fiber intermediates, textiles, blended yarn and polyester staple fiber. The Company also owns a petroleum refinery cum petrochemicals complex in Jamnagar, India that produces a wide range of products such as gasoline, superior kerosene oil and liquefied petroleum gas.

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Reliance Industries (RIL IN)

Morning Views Asia: Reliance Industries

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region,...

Lucror Analytics

Aequitas 2024 Asia IPO Pipeline - India

In this note, we will take a look at the Asia Pacific IPO pipeline for 2024, following up with India after having looked at Hong Kong earlier.

Sumeet Singh

EM Energy: Regime Shift

A quarter of active EM managers have no exposure to the Energy sector and only 23% are overweight. With Oil prices at multi-year highs, active EM...

Steven Holden

Reliance Industries - Tear Sheet - Lucror Analytics

We view Reliance Industries (RIL) as "Low Risk" on the LARA scale. This is driven by the company's: [1] large scale, leading position and...

Lucror Analytics

Vodafone Idea Placement - Very Well Flagged but Its Not Going to Fix a Whole Lot of Issues

Vodafone Idea (IDEA IN) plans to raise around US$2.2bn via a follow-on public offering. In this note, we talk about the deal dyanmics.

Sumeet Singh

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