Fixed Income. Global Ports - Potential to Shine Through as Risks Fade
Global Ports, a stevedore that controls around 30% of Russia's container market, is poised to offer yield-hungry investors an improving credit story in a squeezed corporate Eurobond space. The company's operating performance has finally started to catch up with that of the market. Improved financials shouldn't be far behind. In addition, we consider the regulatory risks to have been overblown: the impending changes to tariffs should be immaterial for the company, while we see the FAS's antimonopoly claim as posing little risk. The Global Ports 22 and 23 offer the highest yields among Russian bonds rated BB/BB- and are trading at a premium of 60-90 bps to paper with BB-/B+ ratings. The credit has decent fundamentals, and the company has shown the ability to generate positive FCF throughout the cycle. We reiterate our overweight recommendation for the Global Ports 23.
Sberbank CIB Investment Research is a research firm offering equity, fixed income, economics, and strategy research. It covers analysis on all aspects of Russia’s capital markets, issues and industries. The firm analyzes trends in Russia and combines local knowledge with a global perspective. It processes macroeconomic data, market and company-specific news, stock quotes and other information for providing research reports. The firm provides details and latest prices on the most traded names and most traded paper on all segments Russian market. In strategy research, it provides thematic research, tips and descriptions of the methodology used to evaluate companies.
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