< The 2016 All-Asia Research Team
Navin Killa & team
Morgan Stanley
First-Place Appearances: 8
Total Appearances: 19
Team Debut: 1996
For a third year in a row, Hong Kong–based Navin Killa, 40, shepherds his Morgan Stanley crew to first place on this lineup. The six analysts, who report on approximately 50 Asia ex-Japan telecommunications companies, “have been very insightful and helpful in understanding the competitive environment of the [Association of Southeast Asian Nations] telecoms industry overall,” declares one money manager. Killa points out that telco revenues are resilient amid a slowing macroeconomic environment because customers continue to consume more data. However, “the regulatory and competitive outlooks have worsened in the past 12 to 18 months,” he advises, especially as a global increase in spectrum prices pressures return on invested capital and dividends. The team leader and his colleagues foresee diverging performance for services providers in the more mature versus those in emerging markets. The former should sustain low-single-digit revenue and earnings growth — thanks to ongoing increases in data consumption — combined with stable capital expenditures, modestly growing dividends and a “predictable competition and regulatory environment,” says Killa. “As interest rates remain low, the 5 to 6 percent dividend yields continue to support the stocks.” Accordingly, they are generally upbeat on this group, with Taiwan–based Chunghwa Telecom Co., South Korea’s KT Corp. and Singapore Telecommunications among their preferred regional choices. In the less-developed markets, capex and spectrum-related costs are likely to keep dividend visibility low for the near future, Morgan Stanley’s researchers believe, so they counsel greater selectivity there. This year Killa is making his first appearance on the Malaysia roster, co-leading the third-place squad with Sean Gardiner.
