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

The Asia HY Trade Book for the month of January includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative-value charts and lists of the bonds in the Lucror Asia HY index.

  The Asia HY Trade Book for the month of January includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative-value charts and lists of the bonds in the Lucror Asia HY index. 

Asia HY Trade Book - January 2021 - Lucror Analytics

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-18054'>China Fortune Land</a></li><li><a href='#lucror-entity-3121'>Lippo Karawaci</a></li><li><a href='#lucror-entity-10365'>Sirtex Medical</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.China Fortune LandLippo KarawaciSirtex Medical

Morning Views Asia: China Fortune Land, Lippo Karawaci, Sirtex Medical

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

The LQ45 Index is a market cap weighted index of the 45 most liquid stocks listed on the Indonesia Stock Exchange (IDX). The LQ45 Index covers at least 70% of the stock market capitalization and transaction values in the Indonesia Stock Market.The IDX has announced the changes to the LQ45 Index as a part of the February review. <a href="https://www.smartkarma.com/entities/medco-energi-internasional-tbk-pt" target="_blank" data-smartkarma-citation="entities:20844:1" rel="noopener">Medco Energi (MEDC IJ)</a> and <a href="https://www.smartkarma.com/entities/chandra-asri-petrochemical" target="_blank" data-smartkarma-citation="entities:2556:1" rel="noopener">Chandra Asri Petrochemical (TPIA IJ)</a> have been added to the index, while <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 Tbk (SCMA IJ)</a> and <a href="https://www.smartkarma.com/entities/sri-rejeki-isman-tbk-pt" target="_blank" data-smartkarma-citation="entities:20178:1" rel="noopener">Sri Rejeki Isman (SRIL IJ)</a> have been deleted from the index.We expect passive funds will need to buy a lot of <a href="https://www.smartkarma.com/entities/chandra-asri-petrochemical" target="_blank" data-smartkarma-citation="entities:2556:1" rel="noopener">Chandra Asri Petrochemical (TPIA IJ)</a> in terms of days of ADV, while there will be over 2 days of ADV to sell on <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 Tbk (SCMA IJ)</a>. The changes are effective after the close of trading on 29 January, so there are only 4 trading days before passive funds have to rebalance their portfolios. Active funds benchmarked to the LQ54 index will also trade over the next few days so as not to veer too far from their benchmark.

The LQ45 Index is a market cap weighted index of the 45 most liquid stocks listed on the Indonesia Stock Exchange (IDX). The LQ45 Index covers at least 70% of the stock market capitalization and transaction values in the Indonesia Stock Market.The IDX has announced the changes to the LQ45 Index as a part of the February review. Medco Energi (MEDC IJ) and Chandra Asri Petrochemical (TPIA IJ) have been added to the index, while PT Surya Citra Media Tbk (SCMA IJ) and Sri Rejeki Isman (SRIL IJ) have been deleted from the index.We expect passive funds will need to buy a lot of Chandra Asri Petrochemical (TPIA IJ) in terms of days of ADV, while there will be over 2 days of ADV to sell on PT Surya Citra Media Tbk (SCMA IJ). The changes are effective after the close of trading on 29 January, so there are only 4 trading days before passive funds have to rebalance their portfolios. Active funds benchmarked to the LQ54 index will also trade over the next few days so as not to veer too far from their benchmark.

LQ45 Index Rebalance: TPIA, MEDC In; SCMA, SRIL Out

The LQ45 Index is a market cap weighted index of the 45 most liquid stocks listed on the Indonesia Stock Exchange. The LQ45 Index covers at least 70% of the stock market capitalization and transaction values in the Indonesia Stock Market.The next rebalance of the LQ45 Index will be effective after the close of trading on 29 January and will be announced latest by 26 January, though it is likely that it could be announced as early as 22 January post market close.Stocks that could be included in the index are <a href="https://www.smartkarma.com/entities/bank-brisyariah-tbk-pt" target="_blank" data-smartkarma-citation="entities:26981:1" rel="noopener">Bank Brisyariah (BRIS IJ)</a>, <a href="https://www.smartkarma.com/entities/kimia-farma-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:8524:1" rel="noopener">Kimia Farma Persero (KAEF IJ)</a>, <a href="https://www.smartkarma.com/entities/timah-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:11174:1" rel="noopener">Timah Persero (TINS IJ)</a> and <a href="https://www.smartkarma.com/entities/pp-london-sumatra-indones-pt" target="_blank" data-smartkarma-citation="entities:9039:1" rel="noopener">Pp London Sumatra Indones (LSIP IJ)</a>, while stocks that could be deleted from the index are <a href="https://www.smartkarma.com/entities/sri-rejeki-isman-tbk-pt" target="_blank" data-smartkarma-citation="entities:20178:1" rel="noopener">Sri Rejeki Isman (SRIL IJ)</a>, <a href="https://www.smartkarma.com/entities/summarecon-agung-tbk-pt" target="_blank" data-smartkarma-citation="entities:5693:1" rel="noopener">Summarecon Agung (SMRA IJ)</a>, <a href="https://www.smartkarma.com/entities/wijaya-karya-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:1877:1" rel="noopener">Wijaya Karya Persero (WIKA IJ)</a> and <a href="https://www.smartkarma.com/entities/jasa-marga-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:12747:1" rel="noopener">Jasa Marga (Persero) (JSMR IJ)</a>.Given the subjective nature of stock inclusion and exclusion, plus the short time frame between announcement of the changes and the implementation, the adds outperform the deletes between announcement and implementation.Though passive assets tracking the index are limited, the LQ45 is a very popular benchmark for mutual funds and pension funds and active managers will also be trading the stocks to realign their portfolios to the new index names.

The LQ45 Index is a market cap weighted index of the 45 most liquid stocks listed on the Indonesia Stock Exchange. The LQ45 Index covers at least 70% of the stock market capitalization and transaction values in the Indonesia Stock Market.The next rebalance of the LQ45 Index will be effective after the close of trading on 29 January and will be announced latest by 26 January, though it is likely that it could be announced as early as 22 January post market close.Stocks that could be included in the index are Bank Brisyariah (BRIS IJ), Kimia Farma Persero (KAEF IJ), Timah Persero (TINS IJ) and Pp London Sumatra Indones (LSIP IJ), while stocks that could be deleted from the index are Sri Rejeki Isman (SRIL IJ), Summarecon Agung (SMRA IJ), Wijaya Karya Persero (WIKA IJ) and Jasa Marga (Persero) (JSMR IJ).Given the subjective nature of stock inclusion and exclusion, plus the short time frame between announcement of the changes and the implementation, the adds outperform the deletes between announcement and implementation.Though passive assets tracking the index are limited, the LQ45 is a very popular benchmark for mutual funds and pension funds and active managers will also be trading the stocks to realign their portfolios to the new index names.

LQ45 Index Rebalance Preview: Potential Candidates for Change

Sritex is in the market with a proposed issuance of USD 325 mn Notes (tenor to be determined). We view the transaction as a credit positive, as it will alleviate the refinancing risk associated with the company's near-term debt maturities. The transaction is expected to be immediately leverage neutral, and will provide the company with RCF availability to meet its future liquidity needs. That said, we believe Sritex’s borrowings could continue to increase, as the company is likely to draw down on its RCF to fund future working capital outflows. With the funding environment in Indonesia having weakened, especially for private companies in sectors affected by the pandemic, we view positively Sritex's proactive approach to arranging financing. Assuming a 5Y tenor, we see fair value for the proposed Notes at 9.0-9.25%. Overall, we think Sritex’s existing bonds seem to have been oversold, and expect that a successful new issuance will help address investors' concerns. Therefore, we believe the existing Notes could re-price tighter after an issuance.

  Sritex is in the market with a proposed issuance of USD 325 mn Notes (tenor to be determined). We view the transaction as a credit positive, as it will alleviate the refinancing risk associated with the company's near-term debt maturities. The transaction is expected to be immediately leverage neutral, and will provide the company with RCF availability to meet its future liquidity needs. That said, we believe Sritex’s borrowings could continue to increase, as the company is likely to draw down on its RCF to fund future working capital outflows.   With the funding environment in Indonesia having weakened, especially for private companies in sectors affected by the pandemic, we view positively Sritex's proactive approach to arranging financing. Assuming a 5Y tenor, we see fair value for the proposed Notes at 9.0-9.25%. Overall, we think Sritex’s existing bonds seem to have been oversold, and expect that a successful new issuance will help address investors' concerns. Therefore, we believe the existing Notes could re-price tighter after an issuance.  

Sritex - Event Flash - Proposed Issuance Of Senior Notes - Lucror Analytics

Indonesia

PT Sri Rejeki Isman Tbk, also known as Sritex, is an Indonesia-based company primarily engaged in the integrated textile and garment industry. It manufactures yarn, greige, fabrics, and apparel through its spinning, weaving, dyeing/printing, and garment manufacturing processes. The company was founded in 1966 as a traditional trading company and established its first printing factory in 1968. Its headquarters are located in Sukoharjo, Central Java, Indonesia.

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Sri Rejeki Isman (SRIL IJ)

Asia HY Trade Book - January 2021 - Lucror Analytics

The Asia HY Trade Book for the month of January includes a summary of our recommendations, as well as our high-conviction ideas. The report also...

Lucror Analytics

Morning Views Asia: China Fortune Land, Lippo Karawaci, Sirtex Medical

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

Lucror Analytics

LQ45 Index Rebalance: TPIA, MEDC In; SCMA, SRIL Out

TPIA and MEDC have been included in the LQ45 Index while SCMA and SRIL have been deleted. The changes are effective at the close on 29 January and...

Brian Freitas

LQ45 Index Rebalance Preview: Potential Candidates for Change

The LQ45 rebalance will be effective after the close of trading on 29 January and the announcement will be made in the next few days. There could...

Brian Freitas

Sritex - Event Flash - Proposed Issuance Of Senior Notes - Lucror Analytics

Sritex is in the market with a proposed issuance of USD 325 mn Notes (tenor to be determined). We view the transaction as a credit positive, as...

Lucror Analytics

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