< The 2016 All-Asia Research Team

Guo Xiang (Kelvin) Pang & team
Morgan Stanley
First-Place Appearances: 3

Total Appearances: 5

Team Debut: 2012

With newcomer Guo Xiang (Kelvin) Pang at the helm, Morgan Stanley’s credit strategy squad retains the top spot it first captured in 2014. The three strategists in Hong Kong do “a great job of monitoring quasisovereign spreads versus related sovereign bonds of similar durations,” says one U.S. portfolio manager, which provides “a nice shortcut for me and makes my job easier.” For the rest of this year, they are expecting “a slowdown in outflows,” says Pang, as well as “reduced technical support” for Chinese debt. Consequently, he and his colleagues are urging clients to underweight Asia credits. “We see upside risk to supply and weakening onshore demand,” he adds. “Valuation now looks rich, especially given downside risks to growth.” Similarly, they are circumspect on Asia’s financials credits, which have been outperforming their global counterparts but now appear relatively expensive. “Our cautious view is largely driven by valuations and weakening macro fundamentals,” the 32-year-old leader notes, but the researchers identify at least one area of opportunity in this space. “We view the Basel III tier 2s as the sweet spot in the Asia capital structure,” he explains. These supplementary regional capital instruments currently offer “attractive pickup” over seniors of roughly 105 basis points, he reports, “which is the highest spread pickup since April 2014. In addition, we see the risk of ‘point of nonviability’ as low for Asian banks, given their strong loss-absorption cushions.” Pang has spent his career at Morgan Stanley in Asia, boasting six years in his current role as a regional strategist and a year as a banks credit analyst. He holds a master’s degree in investment management from Cass Business School in London.