In this briefing:
- Smartkarma’s Week that Was in JP/KR: BGF, Japan Telcos, NCSoft, Nissan, and Nexon
- Bangladesh – Political Stability Improves Credit Outlook
- Political Pit Stop (January): Election Delay!
- 2018 HK-Connect SouthBound In a Nutshell
- The Week that Was in ASEAN@Smartkarma – Twin Deficits, Bank Mandiri, and the M1 Bid
1. Smartkarma’s Week that Was in JP/KR: BGF, Japan Telcos, NCSoft, Nissan, and Nexon
After a holiday hiatus where markets were slow and somewhat quiet and the number of insights published and read dipped, we resume your regularly scheduled service.
Smartkarma saw just over 110 insights published last week, with an additional 35 published between Friday afternoon and Sunday evening. The pace is picking up.
Across the platform, almost four dozen thematic, macro, and economics pieces were published by 30 insight providers, and two dozen-plus insights were published on Japan and Korea (note that the prior week, Japan was effectively on holiday the whole week).
Insights published on Japan include…
And on Korea….
2. Bangladesh – Political Stability Improves Credit Outlook
We initiate our coverage on Bangladesh with a STABLE credit outlook for the country. Prime Minister Sheikh Hasina has been re-elected in the general elections in a crucial result for the country’s economy. We expect political stability to improve the credit outlook of this South Asian nation with a renewed emphasis on rapid economic growth now seeming likely. The election was seen as a critical event by economists and experts across the board.
3. Political Pit Stop (January): Election Delay!
The regime announced that elections will be delayed from the seemingly ‘rock solid’ date of Feb 24, 2019 as there are concerns it would interfere with the coronation ceremony in early May. While the other political parties (Dems, Thaksinites) are generally understanding, there is a group of pro-democracy group that has marched out to protest and demand that the regime stick to the old timeline. Apart from this, there are some observations regarding:
- Short tenure. The Dems pointed out that given a possible Parliamentary minority (despite Senate majority), the Army faction’s new government could find itself unstable, something which the Army faction itself has not denied. Perhaps, the next government won’t last four years like this one.
- Differences and similarities in policies. From our standpoint, almost all the three major factions adhere to populist policies, such as straightforward money handouts. However, the Army faction has some advantages such as hotlines, which assume they stick to power for a while.
- Greater potential for violence. The protest against election delays has dragged on for two weeks, increasing the risk of armed conflict and instability.
4. 2018 HK-Connect SouthBound In a Nutshell
Since autumn of 2014, the HK-Shanghai Connect, and later the HK-Shenzhen Connect mechanisms have provided means for mainland investors to buy Hong Kong-listed stocks.
We have been tracking the H/A relationships and the Southbound flows per name on a weekly basis and occasionally writing commentary about it since late 2016.
This report provides a brief synopsis of the SOUTHBOUND flows into Hong Kong-listed stocks over the course of 2018, by sector, by average percentage change in mainland ownership of HK shares outstanding subject to the Connect mechanisms, and the top and bottom five names per sector per quarter.
5. The Week that Was in ASEAN@Smartkarma – Twin Deficits, Bank Mandiri, and the M1 Bid
This week’s offering of Insights across ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up pieces. Please find a brief summary below, with a fuller write up in the detailed section.
Macro Insights
In Widodo, PDI-P Lead / Siregar to DC / Tobin Tax Unlikely / KPK Bomb Scare / Industry Minister Eyed, Kevin O’Rourke comments on the most significant economic and political developments over the last week.
In his economic insight, Philippines: Time to Mull over the Risks of the ‘twin Deficit’ Syndrome, Jun Trinidad comments on the selling macro imbalances in the Philippines and the risks posed for the economy.
In Philippines: Another CPI Downside Surprise in December, Jun Trinidad comments on the lower than expected inflation figures coming out of the Philippines.
Equity Bottom-up Insights
In Bank Mandiri (BMRI IJ) – Shape Shifting and Millenial Mortgages, circles back to Bank Mandiri Persero (BMRI IJ) following a meeting with management in Jakarta. He sees Bank Mandiri Persero (BMRI IJ) as a key proxy for the Indonesian banking sector, with an increasingly well-diversified portfolio and growing exposure to the potentially higher growth areas of microlending and consumer loans.
In Accordia Golf Trust (AGT SP): MBK + ORIX + AGT = Time for Outperformance? 9.5% Dividend Yield, Nicolas Van Broekhoven circles back to this golfing play and suggests now it a good time to revisit.
In IPS Securex (IPSS SP): Micro-Cap Could Benefit from SG Gov’t HDB Upgrade Program, Nicolas Van Broekhoven revisits this small cap which is a play on Housing Development Board upgrades in Singapore.
In M1 Offer Despatched – Dynamics Still Iffy, Travis Lundy comments on the ongoing offer by Konnectivity for M1 Ltd (M1 SP) and whether we should expect a “bump” in the shares or to sell into the market.
In M1 Ltd (M1 SP): Take the Offer, Axiata Unlikely to Start a Bidding War, Arun George comments on Konnectivity’s bid for M1 Ltd (M1 SP) and suggests taking up the offer.
In PCI Ltd – All Over Before It Starts, Ballingall event-driven specialist David Blennerhassett comments on the ongoing bid for Pci Ltd (PCI SP) and sees it as a done deal.
Get Straight to the Source on Smartkarma
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
