新兴市场-信贷策略-第十届新兴市场企业大会的主要收获.docx

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1、Global Credit Research01 March 2019Emerging Markets Corporate StrategyYang-Myung Hong AC(1-212) 834-4274ym.hongjpmorgan J.P. Morgan Securities LLCAlisa Meyers AC(1-212) 834-9151alisa.meyersjpmorgan J.P. Morgan Securities LLCZubair K Syed AC(1-212) 834-5230zubair.k.syedjpmorgan J.P. Morgan Securities

2、 LLCSoo Chong Lim AC(852) 2800-7387soo.ch.limjpmorgan J.P. Morgan Securities (Asia Pacific) LimitedZafar Nazim, CFA AC(44-20)7134-7551zafar.nazimjpmorgan J.P. Morgan Securities plcNatalia Corfield AC(1-212) 834-9150natalia.corfieldjpmorgan J.P. Morgan Securities LLCJ. R MorganMain Takeaways from Our

3、 10th EM Corporate ConferencePositive sentiment driven by receding macro risks and supportive stand-alone fundamentals/technicals We held our annual Global EM Corporate Conference in Miami from February 25 to February 27 This year marked the I Oth edition of our flagship EM corporate conference, and

4、 the size and scope has been growing together with the asset class, which expanded from about $600bn in early 2010 to $2.2tn currently. The global scope of our asset class means that issuers from all the different EM regions participated in addition to diverse investors across EM dedicated, US, Euro

5、pe, and Asia. The constructive sentiment at the conference reflected the recent positive tone in markets as well as comfort on corporate fundamentals and technicals, but with some unease at current spread levels that do not seem to reflect much downside buffer. CEMBI Broad is up 3.6% YTD, more than

6、recovering the -1.6% loss posted in 2018. Current spread at 275bp is back to the levels of mid 2018 and at our near-term target. The view on EM corporate fundamentals remained generally favorable as 72% of survey respondents expected stable to improving trends. This was also reflected in the default

7、 expectations, where the vast majority anticipated modest default rates of below 4%. In addition, the lack of supply outside of Asia and limited net supply continue to paint a supportive picture for overall technicals. The main risk factors were still related to the main macro themes of rising UST y

8、ields/stronger USD and trade protectionism. While the dovish turn by the Fed and recent developments from the US-China trade talks seem to mitigate these risk factors, there seems to be concern that they could return to put pressure on markets down the road. This is in line with our view that curren

9、t spread levels factor in limited buffer against such risk factors, with the riskreward skewed to the downside in case they do not turn out as favorable as expected. On the other hand, accelerating growth in China and modest recovery in global growth were cited as the upside catalysts. The country-l

10、evel performance expectations were once again interesting, with Brazil picked as the top CEMBI country segment in 2019 whereas Mexico was selected as the worst. However, there seems to be somewhat of a backward-looking component in these responses given that Brazil has been the best performing count

11、ry segment over the past year while Mexico has been among the worst. On a regional level, most respondents chose Latin America as the region to add risk and EM Europe as the one to reduce. In this publication, we provide full results of the onsite survey and a summary of 22 panel presentations held

12、during the conference.This report summarizes the main messages from the presentations and, as such, represents the perspectives of the speakers and not necessarily the opinions of J.P, Morgan research analysts. All sessions from the conference were conducted under Chatham House rules, without direct

13、 attribution to the speakers and closed to the press. The views presented by the speakers do not necessarily coincide with the views of J.P. Morgans research analysts.See page 37 for analyst certification and important disclosures.J.P. Morgan does and seeks to do business with companies covered in i

14、ts research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. jpmorganmarkets 10. Where do you see CEMBI Br

15、oad spread at YE2019 (currently 284bp)?Source: J.P. Morgan SurveyIL Which statement best describes your view on EM corporate fundamentals?Source: J.P. Morgan Survey12. Which statement best describes your expectations on EM default rates in 2019?Elevated default volumes (5%) across EM corpsgloballyAv

16、erage default volumes (3-4%) across EM corpsgloballyModest default volumes 卜2%), across EM corpsgloballyElevated default volumes (-5%), focused on particularsegments/countriesAverage default volumes (3-4%), focused on particularsegments/countriesModest default volumes (-2%), focused on particularseg

17、ments/countriesSource: J.P. Morgan Survey.1 expect total issuance from EM corporates in 2019 to be (JPM FY2019E = $380bn)?Source: J.P. Morgan SurveyHow are you currently positioned in EM Corporates within EM fixed income compared to one year ago?Source: J.P. Morgan SurveyHow do you expect your alloc

18、ations to corporates within EM fixed incometo change over the next quarter?Source: J.P. Morgan Survey16. What fund flows are you experiencing?Source: J.P. Morgan Survey19. In the near term, my duration preference is:Source: J.P. Morgan SurveySource: J.P. Morgan Survey22. In the near term, I am likel

19、y to REDUCE risk in:Source: J.P. Morgan SurveyCorporates from which major country segment will have the best total return in 2019?Source: J.P. Morgan SurveyCorporates from which major country segment will have the worst total return in 2019?Source: J.P. Morgan SurveyDo you expect PEMEX to be downgra

20、ded to sub-IG level by 2 or more rating agencies?In Brazil, what are your expectations for the size of savings and dates of approval for the pension reform?27. Does the recent tragedy experienced by Vale in Brazil negatively impact your risk perception on:Source: J.P. Morgan SurveyLink to presentati

21、ons and related reportsMacro and Global Focused PanelsEM Outlook Across Credit and Local/FX (link)Emerging Market Focused PanelsAssessing Relative Value in EM Corporates (link, slides 6-32)How I learned to Stop Won*ying and Love EM Corporate Fundamentals (link, slides84-91)一Primary Market - What Nex

22、t (link、slides 73-82)Commodities Outlook and How Corporates are Faring Amidst the Volatility (OilMarkets We或/y, Metals WeeZ/y)Anatomy of the EM Bond Index (China index incliisicm, GCC countries inclusion. Venezuela)Thematic PanelsHow to ESG in EMC (link)Latin America Focused PanelsVenezuela/PDVSA: A

23、 New Dawn? (link)Mexico: Political and Economic Challenges of the AMLO Administration (Mexico,PEMEX, Rating Risks)Asia Focused PaneChina in the New World Order (link)CEEMEA Focused PanelUkraine - Right policies to navigate through Presidential and Parliamentary elections (link)Summary of Panel Prese

24、ntationsMacro and Global Focused PanelsGlobal Macro and Investment OutlookJP. Morgan Economists think that global growth has been slowing due to a number of factors, which are basically a normalization of some of the tailwinds we had in the previous years, including US tax reforms, recovery in commo

25、dity prices that helped global EM growth, etc. Also, business confidence has taken a simultaneous hit due to elevated geopolitical tensions, most important being the ongoing US-China trade war. US recession risk seems low for 2019 with J.P. Morgan Economics teams models showing 45% probability for r

26、ecession within one year and the base case likelihood could be sometime in late 2020 or 2021. They do acknowledge though that there is always a chance of some unknown shock that catches policy makers by surprise and bring forward this outcome.Similarly, risk factors for EM economies have diminished

27、somewhat in 2019 given more dovish Fed policy, which gives room to EM central banks for supportive policies as well. This should also imply USD not appreciating materially against EM FX, but we are unlikely to see material weakness in the dollar until we see a sustainable recovery in Europe and Japa

28、n. Separately, China growth remains a key risk factor to monitor, and Chinese policy makers are likely to aim for 6% GDP growth with continued focus on reining in debt-fueled growth.In the credit markets, focus on BBBs has increased given their sharp increase in total outstanding post GFC as well as

29、 leverage built-up in credits over this period. The panelists believe that a lot of the downgrade risk as a result of credit deterioration is already priced in. Also, given that a lot of institutional funds now have much more flexible mandates to hold some HY credits, technical selling due to downgr

30、ades is likely to be less pronounced now.The panel noted that the sharp correction in US equities in 4Q18 had fundamental reasons such as weaker macro data print, US trade tensions, etc., but a changing market structure with a growing proportion of passive funds amplified the market moves. Looking a

31、head, the panel expects 5-6% top-line earnings growth, which is slightly above trend. Technicals look positive as positioning is still quite defensive. They think the rotation to defensives seems overdone and that Cyclicals (tech hardware, industrials, EMs, small caps) offer better risk reward in eq

32、uities currently. Key risk factors would be a more hawkish stance by the Fed as well as higher trade tensions again.EM Outlook Across Credit and Local/FXBackdrop for EM has been positive, albeit not in the traditional bullish sense. Entering the new year, an acceleration of growth was seen as the ma

33、in catalyst for EM, but the Feds dovish approach has been the main driver fbr outperfbnnance to date, coming off the wides since late 2018. Overall fundamentals have remained solid and are expected to improve further throughout 2019, with additional upside risk from widening EM-DM growth differentia

34、l and contained inflation levels aswell as very resilient corporate credit trends, among other factors. A continuation of a strong technical landscape is also anticipated, including low issuance levels insovereigns and corporates. Even though the pecking order between asset classes was not unanimous

35、, all panelists picked local currencies as the laggard for the year.Corporate technical and fundamental prospects to support performance. Within corporates, the differential between EM and US spreads have been one of the most commonly used indicators of relative value. While the 40-60bp range in spr

36、ead over US HG is not expected to change much, the pickup may still be considered attractive for US investors. Importantly, the downgrades of more volatile EM countries in the past years have enhanced the quality of the remaining IG credits in EM. On the other hand, the flat spread against HY is not

37、 considered sufficient to attract interest from US HY investors. Default rates are expected to remain contained at 2.6% in 2019 (recently revised downwards), with the lack of riskier new issuers and conservative stance from EM corporates cited as factors for the limited level of delinquencies, in ad

38、dition to policies in China that should provide support through improved domestic liquidity and funding conditions.Overall risks and select opportunities. Among the risks to monitor, valuations and positioning are believed to be more important factors in the short term than potential negative headli

39、nes. Tracking where we are in the US business cycle will be vital to anticipate EM market movements. Local political uncertainty is seen as less of a topic this year, after being in the forefront in 2018, when relevant electoral rounds swung investor sentiment. Notably, it was reiterated that the id

40、iosyncratic stories should allow opportunities as tracking indexes from afar might mask the movements driven by local developments, especially in smaller frontier markets. Quasi-sovereigns were specifically mentioned as a potential factor of outperformance, with Argentine provinces and Eskom picked

41、as more sanguine stories, counterpoised by Turkish entities and Pemex.Global Credit OutlookJPM strategists have a more positive outlook globally, but much of the repricing is behind us. The beginning of 2019 has seen a meaningful rally across markets driven by a more dovish Fed stance, easing trade

42、tensions, still supportive corporate earnings, and manageable default rates. As a result, JPMs HY team now expects full-year 2019 returns of 10.5%, with 6% already realized in the first two months of the year. As spread compression eases, the remainder of the year should see healthy, but lower, retu

43、rns on the back of carry and any move in rates. In the case of HG, spreads are still expected to modestly widen toward the end of the year as corporate earnings and growth come down from a solid base. In Europe, the delay in rate hikes from the ECB has also similarly impacted initial return forecast

44、s fbr the region. For EM corporates, spreads could overshoot in the short tenn as flows and the Feds stance support the region. Nevertheless, spreads are forecast to drift wider later in the year on concerns of end-of-cycle dynamics. Given these expectations, the top picks for 2019 are B rated loans

45、, long US banks / short technology in US IG, long AT Is in Europe, and long GCC IG in CEMBI as well as China HY.BBB risk is at the forefront of discussions in US HG, but JPM expects fallen angels to remain manageable in 2019. Corporates within US HG have been increasing leverage, in particular to fu

46、nd M&A transactions, decreasing the credit quality of the market. However, while a large amount of fallen angels could disrupt HY, JPM expects this number to remain below 1% of the market. The factors supporting contained downgrades include the flexibility of multinationals, which can cut dividends

47、or buybacks, as well as the deleveraging of several corporates post M&A, With this in mind, HY will have a smaller pool of issuers to absorb and theContributinq AuthorsGlobal EM Corporate StrategyYang-Myung Hong AC (1-212) 8344274 ym.hongjpmorgan Alisa Meyers AC (1-212) 834-9151 alisa.meyersjpmorgan

48、 Zubair Syed AC (1-212) 834-5230 zubair.k.syedjpmorgan Asia Corporate ResearchSoo Chong Lim AC (852) 2800-7387 soo.ch.limjpmorgan Varun Ahuja AC (852) 2800-6038 varun.x.ahujajpmorgan EMEA Corporate ResearchZafar Nazim AC (44-20)7134-7551 zafar.nazimjpmorgan Rahul BhatAC (44-20)7134-9059 rahul.bhatjpmorgan Vishal IyerAC (44-20)7134-0928 vishal.iyerjpmorgan Latin America Corporate ResearchNatalia Corfield AC (1-212)834-9150 natalia.corfieldjpmorgan Julio Arantes