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Our Top Picks
We highlight some of the bonds we currently prefer, based on the value they offer and the strength of their credit.
OUR TOP 5 PICKS
Sovereign Bonds
as of March 9, 2025
Republic of the Philippines
- Issuer: Republic of the Philippines
- Credit Rating: BBB
- Bond: ROP 4.375 30
- Indicative Yield-to-Maturity (YTM): 4.798% 4.990%
The Philippines is one of the fastest-growing emerging market (EM) economies. However, gross domestic product (GDP) per capita remains relatively low (USD 3,870 per annum, similar to Egypt). Business process outsourcing and tourism are two of the biggest contributors to the economy. The manufacturing industry is of decent size, especially electronics, automotive, and food processing. The country has few natural resources, with the notable exception of nickel ore. Economic activity is expected to remain very robust in the coming years, which will eventually boost income per capita, and increase the likelihood of ratings upgrades.
Kingdom of Saudi Arabia
- Issuer: Kingdom of Saudi Arabia
- Credit Rating: A
- Bond: KSA 5.125 28
- Indicative Yield-to-Maturity (YTM): 4.850%
The Kingdom of Saudi Arabia boasts a strong external balance sheet and sizable reserve buffers. It is considered as the largest exporter of petroleum in the world but its reliance on its petroleum sector remains a key risk, as oil revenues contribute to 40% of KSA’s GDP and 75% of its fiscal revenue. Its efforts to divest from oil through its Vision 2030 plan presents a positive note for the sovereign, as well as manageable deficits that is in-line with most developed economies.
OUR TOP 5 PICKS
Corporate Bonds
as of March 9, 2025
International Container Terminal Services Inc
- Issuer: International Container Terminal Services Inc
- Credit Rating: Unrated
- Bond: ICTPM 5.875 25
- Indicative Yield-to-Maturity (YTM): 4.595%
We expect ICTSI to remain resilient amid fears of a global growth slowdown owing to inorganic contributions, yield improvements, and strong cost control. ICTSI has steadily deleveraged over the past five years. We see this as prudent financial management. However, the management’s recent lean towards growth at the expense of deleveraging could restrain improvements in credit metrics. While ICTSI is exposed to material Emerging Market-related geopolitical risks, we think the company’s geographically diversified revenue base across 20 countries limits country-specific risks. While sizable capex and high dividend payouts could strain ICTSI’s credit profile, we take comfort in ICTSI’s robust operating cash flow generation.
Hyundai Motor
- Issuer: Hyundai Motor
- Credit Rating: A
- Bond: HYNMTR 5.5 26
- Indicative Yield-to-Maturity (YTM): 4.834%
Creditsights maintained outperform recommendation on Hyundai bonds based on relative value, expectations of stable to growing market share in developed markets, sustained strong automotive profitability and margins, its innovative hybrid vehicle and EV product offerings that we believe should fuel further share gains, and solid free cash flow generation.
Eco-friendly vehicle sales accounted for a healthy share of total unit wholesales in 2Q 2024 for both Hyundai (18%) and Kia (21%), although sales of hybrids continued to grow for both companies during the quarter while Hyundai’s EV sales declined year-on-year.
Korea Electric Power Corp.
- Issuer: Korea Electric Power Corp.
- Credit Rating: AA
- Bond: KORELE 5.5 28
- Indicative Yield-to-Maturity (YTM): 4.858%
Korean Electric Power Corp. (KEPCO) is the sole electricity distributor and transmitter in South Korea. Its credit profile is underpinned by excellent government support, thanks to its strategical role. KEPCO enjoys strong access to the onshore and offshore funding channels, mitigating its elevated leverage and insufficient cash coverage for short-term debt. It is in the process of implementing a financial improvement plan and aims to restore financial stability by 2027. Its dollar bonds provide attractive yield pick-ups compared to lower-rated Chinese state-owned SOEs and BBB-rated low beta Korean corporates.
FEATURED BOND
The Bond Spotlight
The Bond Spotlight
BNP Paribas
- Bond:
Our View
BNP remains one of the more diversified bank names in Europe. Its strong business and geographic diversification has helped it maintain good profitability and asset quality. It has extensive operations in Italy via its subsidiary BNL. Earnings have been resilient, with CIB a stand-out performer. Liquidity and funding metrics look sound. Asset quality has held up well, although an outlier is the group’s personal finance business. The latter is being restructured, to focus more on auto finance rather than personal lending. BNP’s capital position strengthened in 2024 but it will weaken in 2025/6. It is looking to expand now in insurance and asset management, likely to grow fee income. We upgraded its AT1 from Fair to Cheap in January 2025.
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Issuers List Selection
We list down the different bond issuers details and insights on how they perform..
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