1、Tim Jagger Kristine Li William Mak John Manning+65-6518-5166 +65-6518-5732 +65-6518-5164 +612-8259- 2010 APAC Credit Market OutlookJanuary 2010Go East, Young Man!Produced and issued by legal entity here* ABN AMRO group companies are subsidiary undertakings of The Royal Bank of Scotland Group plc.迅
2、嘉机构内参 - http:/Overview and Outlook迅嘉机构内参 - http:/3Credit Market Outlook: What a difference a year makes! 2009 was a vintage year for credit investment. We are bullish entering 2010 but clearly returns will not match last year. The backdrop for credit investment in Asia Pacific remains positive given
3、 the low government bond yields, ongoing macro policy accommodation, high equity market ratings, lack of artificial support for credit spreads and a strong economic picture Out-performance in 2010 will be an alpha rather than beta game. Favour higher yielding parts of IG universe from an allocation
4、perspective, although this is playing out quickly! Senior financials to out-perform higher rated corporates More rapid and/or aggressive than expected withdrawal of liquidity conditions and/or a major sovereign debt crisis in the West are the key threats to our view. We suspect this will be an H2 20
5、10 event however and investors need not position for it yet. In the meantime, we are wary of high cash price or “off the run” issues given limited liquidity. Take largest bets in liquid deals Expect Asia to out-perform Western credit markets. Cash to out-perform CDS given where “market basis” is in
6、the region relative to western markets. Issuance unlikely to match last years record amount but still expected to be sizeable. Expect a bias towards H1 given outlook100110120130140Jan-09Feb-09Mar-09Apr-09May-09Jun-09Jul-09Aug-09Sep-09Oct-09Nov-09Dec-09JACI Composite Total Return, 2009010203040506098
7、 99 00 01 02 03 04 05 06 07 08 09 10FSovereigns Banks / Finance CorporatesAsian Bond Issuance in USDbn迅嘉机构内参 - http:/4Key CallsPansPicksHigh cash price non-IG sovereign issuesQuasi SovereignsHigher rated corporatesSenior financial bonds/CDS (to out-perform higher rated corporates)High cash price bon
8、dsSelected bank capital issues, particularly UT2Illiquid bondsLower rated IG corporatesHY corporates not of national economic importanceCash to out-perform CDSAsia to out-perform迅嘉机构内参 - http:/5Top Trade Idea: Itraxx Asia ex Index versus SovX.WE The best way to play a positive Asia/negative Europe v
9、iew in credit as we expect several European sovereigns to come under credit stress in 2010 whilst the outlook for the constituents of the Asia-ex Index is positive in the vast majority of cases The average rating for the Asia ex Index is A- like the Europe Index. It is made up of 50 names: (a) 5 act
10、ual sovereigns (HK, China, Malaysia, Thailand, Korea) (b) 5 policy banks or corporates (c) 15 banks (5 of which have majority government ownership) (d) 25 Industrial names of which 6 are majority Govt owned or controlled. Rest are typically defensive corporates, such as utilities, telecoms and oil t
11、he current pick up stands at 175bps We believe the pick up is too great given the fundamental credit story at the sovereign level and the lack of systemic stress in the country PLN and Indonesia will both remain active issuers, although technical pressure is greater on Indonesia at present given new
12、 supply Investors can take out nearly 40 points in cash executing this trade. Take profit at pick 140, stop loss at pick 190050100150200250Sep-09 Oct-09 Nov-09 Dec-09Spread Differential, PLNIJ 8% USD19s vs INDON 11.625% USD19s迅嘉机构内参 - http:/Asian Banks迅嘉机构内参 - http:/10Asian Financials still offer be
13、tter valuationsMS 12UCGIM 12BANSAB 12SEB 12HSBC 12RZB 12MS 12CS 12GS 12BAC 13UCGIM 13GS 13MS 13GS 13BAC 13INTNED 13BAC 13UCGIM 14GS 14BAC 14CMZB 14STANLN 14SEB 14DANBNK 14FBNETH 14DEXGRP 14BAC 14GS 14MS 14CMZB 15GS 15BAC 15HSBC 15MS 15HANABK 12KDB 12EIBKOR 12NACF 12KDB 12KDB 13EIBKOR 13KDB 13EIBKOR
14、14KDB 14INDKOR 14NACF 14 EIBKOR 15CITNAT 12SHNHAN 12CITNAT 14 (Cov)WOORIB 15204060801001201401601802.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0Single-A rasted global banks EUR senior Korean policy banks senior Korean commercial banks seniorZ-spd (bps)EIBKOR 15迅嘉机构内参 - http:/11Sound capital base allows banks
15、to ride the economic recovery Asian banks, which managed to preserve their capital base during the crisis, were able to quickly recover when the economies turned corner. New global capital guidelines will have limited impact on Asian ex-Japan banks02468101214MizuhoMUFG SMFGResonaSumiTr+ChuoShinsei+A
16、ozoraDBSOCBCUOBIBKHana BankWooriBankKookmin BankPusan BankShinhan BankAxisBaroda BOICanaraICICISBIANZ CBANABWestpacKBCBankBNP ParibasDeutsche BankUniCreditINGBank BBVALloydsTSBRBSCore T1 ratio T1 ratio(%)迅嘉机构内参 - http:/12Strong fundamentals support a bull story Asian economic recovery is now underwa
17、y. Loan growth is expected to pick up, but will stay at a healthy range. Asian banks are taking advantage of the recovery by reducing NPL ratios (Korea), raising loan loss provisions (India), and enhancing liquidity positions (Australia / Korea). Underlying asset quality has started recovering and r
18、eported NPL ratio is expected to peak Net interest margins stay solid as funding costs fall and credit costs are set to decline New issues / supply will remain high, but demand is also increasing We estimate that new bank issues will be around USD20bn in 2010 led by Korean banks and Indian banks, al
19、most back to the levels seen during 04-07. Demand is strong tight pricing of new bonds will support older issues Government bailouts were limited and the mentality is different (focus on banks access to international funding markets). Thus, non-call risks and coupon deferral risks are much smaller t
20、han global peers迅嘉机构内参 - http:/13Investment strategy T1 (overweight): Supply is expected to be limited. We recommend to BUY Resona T1 and underweight Mizuho T1. Korean bank T1, especially Woori offers good risk-reward and UOB T1 also looks interesting. Prefer legacy GBP UT2 BNKEA to new USD T1 issue
21、. UT2 (overweight): We expect to see fewer issues as banks place more focus on core T1, and subcategories of T2 will be removed scarcity value. GBP UT2s (Resona, SUMITR and BEA) and EUR UT2 Resona offer compelling risk reward. LT2 (market-weight): Fairly valued following the recent rally. We prefer
22、selective short-dated bonds with attractive YTC (KEB 15nc10s, SHNBK EUR 16nc11s). We prefer WOORIB 7.6% 15 over WOORIB SEN 15 for a 100bps pickup. Senior (market-weight): Performance has been great and valuations have become rich. We still like SHNHAN 12 and CITNAT 14 (the only covered bond in Asia)
23、 FRNs (overweight): protection on rising interest rates. The FRNs are generally trading wider than comparable straight bonds. We like SBIIN Sen 11, BNKEA LT2 17nc12, ICICI Sen 12 and DBSSP LT2 17nc12.迅嘉机构内参 - http:/14Trade Idea: BUY Resona UT2 GBP Pnc11s / Resona Eur Pnc 12s 42% of common shares are
24、 owned by the government, implying strong government support. JPY1.7trn of government pref shares have no mandatory conversion deadline, can be considered as low-cost capital Resona only complies to domestic capital standards, thus there is no pressure to raise capital from private investors. Resona
25、 has a Tier 1 ratio of 8% and total CAR of 11.4%. Non-call risk is minimal RESONA GBP Pnc11s offer YTC of 9.2% and RESONA EUR Pnc 12s trade at YTC of 7.5 Resona has set aside funding for refinancing its EUR1bn of LT2 callable in Apr 10.BNKEA GBP UT2 12SUMITR GBP UT2 11RESONA GBP UT211RESONA EUR UT21
26、2DAHSIN UT2 17CHUTRU UT2 15MIZUHO UT2 09(not called)SUMIBK UT2 15RESONA UT2 16CHIFIN UT2 15AXSBIN UT2 16CANARA UT2 16BOIIN UT2 16BOBIN UT2 17ICICI UT2 17SHNHAN UT2 10SHNHAN UT2 11OCBC UT2 11UOBSP UT2 14UOBSP UT2 13DBSSP UT2 11DBSSP UT2 14WINHAN UT2 (ns) 13WINHAN UT2 171357911S Key Pans: Swire in cas
27、h, Reliance Industries in CDSWooriKDB/KEXIMIDBIKook m in/IBKHanaBOIUOB(Sub)OCBC(Sub)DBS(Sub)EXIM CHBoCMayBankCUBSBIICICIGentingPTTSHK PropPOSCOGS CaltexAromaticsReliance IndHKLandSw ireTemasekChinaKoreaMalayThaiSing TelSamsungTelMalKTHutchSK TelPCCWSK EnergyMISCHyundaiHKSA RSingPow erPetronasCNOOCKE
28、PCOTenagaITRAXX AS IG406080100120140160180200S A-REITs to deliver new issue premiums迅嘉机构内参 - http:/23The Australian Corporate Landscape: The Radar ScreenOff Balance Sheet Liabilities and Unfunded Defined Benefit SchemesCore Infrastructure Projects and Prime RMBSCare: selective with wrapped paperBHP
29、Billiton A-REITs to deliver new issue premiums16 Jun 2011SGP28 Jun 2011CPA02 Sep 2012CFX15 May 2013SGP22 Dec 2014CFX22 Aug 2013GPT15 Jul 2010WDC07 Nov 2010GPT12 Nov 2010CFX15 Mar 2010MGR15 Sep 2010MGR100120140160180200220240260280AssetSwapMargin迅嘉机构内参 - http:/The Asia Pacific Credit Strategy Team迅嘉机
30、构内参 - http:/26Team: Asia Pacific Credit StrategyJohn joined RBS in October to cover the Australian and New Zealand credit markets. Prior to joining RBS, John worked at Societe Generale for two years in Fixed Income and Credit Trading as a Senior Credit Analyst, providing credit and risk management a
31、dvisory across domestic and offshore markets. Before joining SG, John was Senior Credit Analyst at ANZ publishing credit research on Australian and New Zealand non-financial corporates. His team were ranked No 1 for Credit Research in the 2006 and 2007 INSTO polls as well as CFO Magazine (2006). Joh
32、n has nearly fifteen years experience in Credit and Risk management. Williams primary focus is on the Asian financials space but he tracks some corporates too. He joined the bank two years ago from BNP Paribas where he worked as a Credit Analyst in the Corporate Banking Department. William graduated
33、 from the Hong Kong University of Science and Technology, majoring in Accounting and Finance.Kristine joined RBS in October to cover Asian financial institutions. Prior to RBS, she worked as and equity analyst at KBC Securities, CLSA, Lehman Brothers and Jardine Fleming covering banks, insurers, and
34、 non-bank financial companies. She spent the last ten years in Japan covering Japanese financial stocks. She was ranked by various investor surveys including the Greenwich Survey, Asian Money and Nikkei Analyst Poll. John ManningSenior Credit StrategistTel: +612-8259-6286Email: William MakCredit Str
35、ategistTel:+65 6518 5164Email: Tim JaggerHead of Credit Strategy, Asia PacificTel : +65 6518 5166Email: Kristine LiSenior Credit StrategistTel: +65 6518 5723email: Tim was appointed to his current position in August following an extended period running both the European corporate credit strategy and
36、 research teams for RBS. His team was voted No. 1 for Trade Ideas in the 2008 Euromoney Survey and he was a key member of the top ranked credit strategy team for that year too. Tims focus will be on the provision of credit strategy and executable trade ideas for clients in the Asia Pacific credit ma
37、rkets. Tim has nearly twenty years credit experience in a variety of roles, both in Europe and Asia Pacific. He Holds and MA (Hons) from The University of St. Andrews and is an Associate of the Chartered Institute of Bankers.Prakash GopalakrishnanCredit StrategistTel:+65 6518 5031Email: Prakash join
38、ed Credit Strategy team in Jan10 to cover Asian Corporates. Until Dec09 he was part of RBS corporate credit risk team covering South East Asian and Indian Corporates. Prior to joining RBS in Sep07, he worked at Bank of America for more than 6 years in India and Australia in credit risk and portfolio
39、 management roles covering corporates, leveraged finance and project finance transactions. Prakash has an MBA from Indian Institute of Management, Ahmedabad.迅嘉机构内参 - http:/272010 Product Suite: Asia Pacific Credit Strategy Asia Pacific Credit Strategy Brief. A high frequency publication that covers
40、key issues and areas of interest in the Asia Pacific credit markets. News flow dictates this will not be a daily publication but will be the most visible output from the team. Top View. These pieces will be used to focus on (a) Trade ideas and “hot” issuer stories (b) Sector reviews (c) Market devel
41、opment issues e.g. Comment on the evolution in Asia Pacific CDS indices Asia Pacific Credit Compass. This will be the medium term portfolio positioning and trade idea repository for RBS credit strategy in the region. It will be concise and will have input from colleagues elsewhere in RBSs global str
42、ategy and research team Please click on to view and subscribe to the teams output. Your Sales contact can assist you.迅嘉机构内参 - http:/28Appendix Asian financials: strong fundamentals support higher valuations迅嘉机构内参 - http:/29Overweight Asian financials: Fundamentals are the key Our preference: Korean
43、 Singaporean / Indian Japanese Korean banks: The economy continues to recover and underlying asset quality are improving although reported credit costs may remain high. Exposure to the Kunho group/Daewoo will have big impact, but is still manageable. Valuations are the most attractive among Asian ba
44、nks Singaporean banks: Solid capital, prudent risk management, limited M&A risks and there is strong demand for senior paper in the local market, but valuations are less attractive Indian banks: Strong economic growth, improved corporate balance sheets combined with prudent government regulation sup
45、port a long-term bull story, but tight yield of new issues leave limited upside to investors Japanese banks: Even with their latest efforts to raise equity, the core capital ratio of SMFG and Mizuho is still the lowest among global banks. They may have to use CCNs. Asset quality is still a concern a
46、s Japans economy still suffers. Underweight T1. However, Japan offers selective buying opportunities.迅嘉机构内参 - http:/30Economic recovery is now underwayLoan growthGDP growth-15%-10%-5%0%5%10%15%20%25%30%Jan-01Jan-02Jan-03Jan-04Jan-05Jan-06Jan-07Jan-08Jan-09IN JP KR SG HK(YoY)-10-8-6-4-20246810Q1 08 Q3 08 Q1 09 Q3 09 Q1 10 Q3 10Japan Singapore Korea India(YoY%)迅嘉机构内参 - http:/
