Nomura Holdings, Inc. · TSE:8604
Nomura — Investor Presentation (February 2017)
9 slides from Nomura's investor presentation, February 2017
Slide 1: Asia Credit: 2017 Outlook
Connecting Markets East & West Asia Credit: 2017 Outlook Offense Wins Games, Defense Wins Championships Global Markets Asia Ex-Japan Sandeep Aggarwal 852-2536-7285 [email protected] Annisa Lee 852-2536-7054 [email protected] For Professional Investors Only STRICTLY PRIVATE AND CONFIDEN
Slide 2: Corporate Cash Credit Spreads – 5 year History
Corporate Cash Credit Spreads – 5 year History Spread comparison across EM Corporates Asia vs US Corporate spreads Spread CEMB Asia CEMB Global Spread Asia minus US (RHS) Differential 750 LUCI US 250 CEMB LATAM CEMB EMEA 400 CEMB Asia 200 550 300 150 200 100 350 100 50 150 0 0 Aug-12 Aug-13 Aug-14 A
Slide 3: Cross Asset Comparison
Cross Asset Comparison EM Credit vs EM FX EM Credit vs EM Equity CEMB Global EM Fx (RHS) CEMB Global MSCI EM equity 475 60 475 650 425 425 850 75 375 375 1050 325 325 90 275 275 1250 225 105 225 1450 Aug-15 Aug-14 Aug-15 Aug-16 Aug-14 Aug-16 Feb-14 Feb-15 Feb-16 Feb-17 Feb-14 Feb-15 Feb-16 Feb-17 Ou
Slide 4: Monetary Policy Environment
Monetary Policy Environment • Fed – Tighter Monetary Policy • ECB / BOJ - ?? • China – Concerns on CNY, Capital Outflows, Overheating = Tighter monetary policy Spike in Inflationary Pressures Showing up onshore yields Inflation Onshore Bond yields % Y-o-Y Spread: AA-rates vs CGB, rhs CGB 3yr 8 CPI I
Slide 5: Peek into China Property Markets
Peek into China Property Markets China MoM Price: No. of cities GFA Sales – 4 weeks YoY Peaked / Plateaued less than -0.5% again ?? Last 4 weeks MoM Price greater than equal to -0.5% & less than 0 225% Tier 1 Tier 2 Tier 3 China YoY No. of cities greater than 0.5% 80 greater than equal to 0 & less t
Slide 6: In Summary
In Summary • Credit Valuation – Full (if not Stretched) • Monetary policy environment – From Tailwind to Headwind • Fundamentals – Economic Outlook?, EPS? • Technical – Inflow Outlook for Fixed Income?, Supply Outlook? – Complacency – VIX, Sentiment for Risk Assets? – M&A, Leverage Seeking Behaviour
Slide 7: Credit strategy
Credit strategy We expect USD67bn of net supply in 2017 Supply Estimates USDbn Sovereigns 15 Financials 92 IG Corporates 56 HY Corporates 25 Gross Supply 188 Redemptions 121 Net supply 67 Please refer to our report “Offense Wins Games, Defense Wins Championships” dated November 28, 2016 for details.
Slide 8: Trading strategy
Trading strategy Financials – Underweight Chinese banks senior and AT1, Overweight senior of leasing companies and Korean and Singaporean T2 Investment Grade Corporates – Switch from 10-yr to 5-yr bonds, Prefer commodities names, Switch from Korean to HK names, Prefer Indian private corporates to st
Slide 9: Disclaimer
Disclaimer This material has been prepared by a sales and trading department of a Nomura affiliate in the Asia ex-Japan region, and if applicable, with the contribution of one or more of its other affiliates. It is made available to you on a confidential basis by the Nomura affiliates (collectively,
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