J.P. 摩根-全球-宏观策略-全球现金流与流动性：企业活动发行-2019.5.10-35页.pdf

Global Markets Strategy10 May 2019F&L LibraryCorporate activity issuanceGlobal Markets StrategyNikolaos Panigirtzoglou AC(44-20)7134-Bloomberg JPMA FLOW J.P.Morgan Securities plcMika Inkinen(44-20)7742 J.P.Morgan Securities plcNishant Poddar,CFA(91-22)6157-J.P.Morgan India Private LimitedSee page 33 for analyst certification and important disclosures.J.P.Morgan does and seeks to do business with companies covered in its 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.Below are excerpts of past issues of Flows&Liquidity on the topic of:Corporate activity issuance.The excerpts can be found in reverse chronological order,with the most recent update below.The excerpts are not updated and are accurate only as of the date indicated.Generally,we do not email out this document,but maintain it on J.P.Morgan Markets as a reference tool.How high is equity supply?(extract from Flows&Liquidity,03 May 19)US IPO activity is currently booming as the founders and owners of mature private technology companies see a window of opportunity to cash out after missing out last year.Annualized,the value of US IPOs during the first four months of this year exceeds the previous high seen in 1999 at the peak of the dot com bubble.One reason this years US IPO boom is not creating indigestion in equity markets is that it is small in volume terms,i.e.after adjusting for the size of the US public equity market.Another reason is that equity offering activity has been rather weak this year outside the US including secondary offerings.It is thus not surprising that global net equity supply proxies such as the change in the free float of the MSCI AC World index remain depressed.Therefore we believe this years US IPO boom presents little threat to global net equity supply which has been hovering close to zero since 2016 in an unprecedented run.In our mind,any threat to equity markets for this year stems from potential changes in equity demand rather than supply.Our position indicators suggest long duration positions among retail investors,active US bond funds,momentum-based investors such as CTAs and risk parity funds have all contributed to the bond market rally this year despite the modest deterioration in the supply/demand picture.A flurry of high profile IPOs in the US is raising questions about equity supply.How strong is this years US IPO activity?Does this imply a big increase in overall equity supply creating indigestion risk for equity markets?2Global Markets StrategyF&L Library10 May 2019Nikolaos Panigirtzoglou(44-20)7134-By looking at the dollar value of this years actual US IPOs(including Uber),we find that the$23bn pace during the first four months of the year is indeed pretty high by historical standards.In fact Figure 1 shows that is the highest pace for the first four months of the year since the Lehman crisis(Figure 1).Annualizing the first four months US IPO activity makes it look even more exceptional.Figure 1 shows that the$70bn implied for the full year 2019 after annualizing the first four months is the highest ever,exceeding the previous high seen in 1999 at the peak of the dot com bubble.Figure 1:Dollar value of US IPOsActual IPOs in$bn.2019 full year estimate is based on Jan-April pace annualized.Source:Dealogic,J.P.Morgan.What explains this years US IPO boom?Many of the companies going public this year are mature private tech companies that have been considering going public over the past year or two.Not because these companies need capital but because the founders and owners of these companies want to cash out part of their ownership.But the equity market correction during Q4 2018 spoiled the IPO plans of many of these companies last year.Now that US equity markets have risen strongly and are back to the previous highs,the founders and private owners of these companies such as venture capital firms are seeing an opportunity to cash out.And they are all rushing to go public before this window of opportunity is closed from a repeat of last years correction.Why is this IPO boom not creating ingestion in US equity markets from a supply point of view?One reason is that the US IPO boom is small in volume terms.Although impressive in value terms,this years US IPO boom looks a lot less impressive if we adjust it for the rise in market values.This is shown in Figure 2which divides the value of US IPOs by the capitalization of the US equity market.At 0.24%for this year,the ratio of the value of US IPOs over the US equity market cap is less than half of what it was in 1999 and less than a fifth of its record high seen in 1993.Figure 2:US IPOs as%of US equity market capIn%.Dollar value of actual US IPOs divided by the capitalization of the Datastream US equity index.2019 full year estimate is based on Jan-April pace annualized.Source:Dealogic,Datastream,J.P.Morgan.Another reason is that at a global level both the value and the volume of IPOs looks rather muted compared to that of the US,because IPO activity has been rather weak this year outside the US.This is shown in Figure 3and Figure 4 which shows the global IPO activity in value and volume terms,respectively,relative to their history.In value terms,the pace of this years global IPO activity is the lowest since 2016.In volume terms,the pace of this years global IPO activity is the lowest since the Lehman crisis!Figure 3:Dollar value of Global IPOsActual IPOs in$bn.2019 full year estimate is based on Jan-April pace annualized.Source:Dealogic,J.P.Morgan.0102030405060708090 92 94 96 98 00 02 04 06 08 10 12 14 16 18Full YearJan-April0.0%0.2%0.4%0.6%0.8%1.0%1.2%1.4%1.6%909294969800020406081012141618050100150200250300350909294969800020406081012141618Full YearJan-April3Global Markets StrategyF&L Library10 May 2019Nikolaos Panigirtzoglou(44-20)7134-Figure 4:Global IPOs as%of Global equity market capIn%.Dollar value of actual Global IPOs divided by the capitalization of the Datastream Global equity index.2019 full year estimate is based on Jan-April pace annualized.Source:Dealogic,Datastream,J.P.Morgan.And adding Global Secondary Offerings to Global IPOs to capture broader equity supply beyond IPOs makes the picture of Figure 4 even more depressed.This is shown in Figure 5 which depicts the volume of global IPOs and Secondary Offerings proxied again by the ratio of their annualized dollar value divided by the market cap of a global equity index.This ratio has been collapsing since 2016 and fell this year to the lowest level since 1990!Figure 5:Global IPOs and Secondary Offerings as%of Global equity market capIn%.Dollar value of actual Global IPOs and Secondary Offerings divided by the capitalization of the Datastream Global equity index.2019 full year estimate is based on Jan-April pace annualized.Source:Dealogic,Datastream,J.P.Morgan.It is thus not surprising that global net equity supply proxies such as that shown in Figure 6 remain depressed for this year.Figure 6 depicts a simple method to gauge net equity supply by looking at the change in the free float of the global equity universe as captured by tradable indices such as the MSCI AC World index.Adjusted for price and fx changes,this change in the free float should capture the increase or decrease in the quantity of shares available to market participants in each period.This proxy of net equity supply shown in Figure 6suggests that global equity supply had been most of the time positive in the past,as equity issuance and dilution activities tended to outweigh equity withdrawal activities such as share buybacks at a global level.But this has not been the case over the past three years.Global equity supply turned negative in 2016 for the first time and has been close to zero since then.In other words,since 2016 we have been experiencing an unprecedented run of low global equity supply providing background support to the equity market.Weak IPO and equity offering activity,coupled with elevated buyback activity,have been responsible for the past three years of close to zero global net equity supply.Zero supply boosts equity market performance in an up year as it magnifies the impact of any given increase in demand.In a down year zero supply limits the magnitude and the duration of an equity market correction.In all,this years US IPO boom appears to present little threat for global net equity supply which has been hovering close to zero since 2016 in an unprecedented run.In our mind,any threat to equity markets for this year stems from potential changes in equity demand rather than supply.We plan to elaborate on these equity demand risks in next weeks Flows&Liquidity.Figure 6:Net equity supply globally$bn per year based on the expansion of the MSCI AC World.Adjusted for price and fx changes.Source:MSCI,J.P.Morgan0.0%0.1%0.2%0.3%0.4%0.5%0.6%0.7%0.8%9092949698000204060810121416180.0%0.5%1.0%1.5%2.0%2.5%3.0%909294969800020406081012141618-600-400-20002004006008001000120014001600199920002001200220032004200520062007200820092010201120122013201420152016201720182019Non-USUSTotal4Global Markets StrategyF&L Library10 May 2019Nikolaos Panigirtzoglou(44-20)7134-How much pressure on profit margins?(extract from Flows&Liquidity,01 Mar 19)Earnings Per Share(EPS)-based global profit margin proxies rose to new historical highs last year,surpassing significantly their previous 2007 peak.This raises questions about profit margins going forward.The rising trajectory in EPS-based profit margin proxies over the past years appears to have been driven almost entirely by lower interest costs and taxes.Not only is the EBITDA-based profit margin measure little changed over the past eight years,but it also stands well below the previous cycle peak of 2007.In other words,on an EBITDA basis,profit margins are far from historical highs.Going forward,potentially weaker economic growth over the next year or two would naturally exert some downward pressure in profit margins,but any such cyclical pressure is likely to reverse quickly as it happened before during the soft patches of 2011/2012 and 2015/2016.Beyond cyclical variations,the more structural challenge for profit margins going forward stems from an apparent rising trend in the relative price of capital vs.output prices as globalization retreats.However,some of this structural downward pressure is likely to be offset by a still declining trend in interest costs allowing profit margins to stay close to current levels over the medium term.The Norges Bank and SNB bought a total of around$45bn of equities in 4Q18.Momentum signals approaching a more bullish shift for equities outside the US.10y Bund momentum begins to reverse from extreme levels.The corporate sector saw a big boost to its profits over the past two years helped by lower taxes as well as lower interest expenses.National account data showed that cash flows as%of GDP for the G4(US,Euro area,UK,Japan)non-financial corporate sector,a crude proxy forprofit margins,rose to a new expansion high last year,approaching 12%of the G4 GDP,well above the previous cycle peak of 11%seen in 2007(Figure 7).Figure 7:G4 non-financial corporate sector cash flow as a%of GDP%of GDP,G4 includes the US,the UK,the Euro area and Japan.Last observation as of Q3 2018Source:FED,BOJ,BOE,ECB Flow of Funds,J.P.Morgan.The rise in cash flows was partly driven by a lower tax burden largely induced by tax cuts in the US.Lower interest expenses,due to lower interest rates locked in during previous years,were also important in boosting profitability.In particular,the interest expense of the G4 non-financial corporate sector declined last year to multi-decade lows despite the rise in corporate bond yields.This is shown in Figure 8,which depicts the interest expense of the G4 non-financial corporate sector as%of their cash flows along with the Global Agg Corporate bond yield.Despite the rise in corporate bond yields last year,the interest expense declined further due to low interest rates locked in during previous years.Figure 8:G4 non-financial corporate sector interest expense as a%of cash flow vs Global Agg Corporate bond yield%of GDP,G4 includes the US,the UK,the Euro area and Japan.Last observation as of Q3 2018Source:FED,BOJ,BOE,ECB Flow of Funds,J.P.Morgan7.58.08.59.09.510.010.511.011.512.012.595 97 99 01 03 05 07 09 11 13 15 170%1%2%3%4%5%6%7%8%0%5%10%15%20%25%0004081216Interest Expense as a%of Cash FlowsGlobal Agg Corporate bond yield(RHS)5Global Markets StrategyF&L Library10 May 2019Nikolaos Panigirtzoglou(44-20)7134-We get a similar picture by using another more accurate proxy for profit margins based on company reports.In particular,we look at bottom-up data for a broader set of companies behind the MSCI AC World index,which apart from non-financial companies in developed countries,also includes Emerging Market companies,as well as Financials.Figure 9 shows that the ratio of 12-month rolling Earnings per Share to Sales per Share for this index currently stands at 9.5%,triple the bottom seen in 2009 and above the 2007 peak.All of the above evidence begs the question“Have profit margins peaked?Figure 9:Profit margins of MSCI AC World index companiesbased on 12-month rolling Sales-per-Share,EBITDA and EPSSource:Bloomberg,J.P.MorganTo answer this question,we need to look at the drivers of profit margins.Companies employ labour and capital,and thus profit margins are a function of how the prices of these two inputs(labour and capital)evolve relative to output prices(i.e.the prices of goods and services sold).Beyond labour and capital,taxes and interest expenses are also important as they drive a wedge between revenues and net profits.How have these four drivers,i.e.the relative price of labour,the relative price of capital,interest expenses,and taxes,been evolving?The relative prices of labour and capital for OECD countries are shown in Figure 10 and Figure 11.The ratio of unit labour costs over GDP deflator is a proxy of the relative price of labour vs.output prices.The ratio of investment deflator over GDP deflator is a proxy of the relative price of capital vs.output prices.The lower these relative prices,the higher the profit margin is likely to be.Figure 10 shows that these relative prices have been on a downtrend since early 1980s as globalization had likely exerted downward pressure in the relative price of both capital and labour since then.The bull run in commodity prices between 2003 and 2008 had slowed but did not reverse this downtrend.The relative price of capital drifted upwards between 2003 and 2008,but the move was small.Even during the oil price spike of H1 2008,these relative prices were little affected.The big rise in relative prices took place in H2 2008 and 2009,as output prices stagnated/declined due to the sharp economic contraction following the Lehman crisis,while in