In this briefing:
- Manappuram Finance Ltd. – A “Golden” Opportunity
- London Shanghai Stock Connect – The Dampest of Squibs. Inteqres Viewpoint
We like the 5.9% bonds due 2023 issued by Manappuram Finance (MGFL IN) . We like the company’s primary business (making loans collateralized by gold ornaments), which is characterized by high margins and low credit losses. We do not foresee major risks (funding, asset quality, etc.), going forward.We like the pickup in yields offered by these bonds over those issued by Muthoot Finance (MUTH IN) .
Despite the fanfare only one Chinese company listed (and raised money) in London after the announcement of the London Shanghai Connect. There have been no listing of Chinese Depository Receipts by companies listed in London. This is starting to look like a white elephant. We have reviewed the successful Depository Receipt programmes around the world and conclude that the pull to issue Chinese Depository Receipts is only weak at present. We do think that companies are reviewing the option of issuing CDRs but there is no intense pressure to do so. By following the factors we have identified, authorities and exchanges could build a more successful programme.
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