UOB Asset Management and Value3 Advisory are collaborating to launch an artificial intelligence AI-enabled credit rating, research and reporting service in ASEAN. The solution aims to help bond investors obtain credit insights in real-time so as to make more effective investment decisions. ESG considerations will also be embedded into an exclusive credit rating model on the AlgoCRED AI-platform to facilitate its own responsible investing efforts.
The platform’s AI capabilities will also be used to enhance the market research and insights features of UOB’s fixed income team, thus leveraging Value3’s machine learning and natural language processing technologies and its own regional investment expertise to improve the predictive analytics of ASEAN corporate bond issuers’ financial and non-financial data collected from diverse sources.
The partnership also includes UOBAM’s help so that Value3 is able to roll out in ASEAN its proprietary AlgoCRED AI-platform2, an online portal offering automated credit ratings, research and insights, for the region’s corporate bonds, including unrated bonds. ESG considerations will also be embedded into an exclusive credit rating model on the AlgoCRED AI-platform to facilitate its own responsible investing efforts.
Credit ratings, risk indicators, and rating reports will be derived from automated quantitative and qualitative assessments. The platform will go on to provide independent credit ratings for unrated bonds in ASEAN for asset managers, financial advisory firms and institutional investors who subscribe to the AlgoCRED AI-platform.
Chong Jiun Yeh, Chief Investment Officer (Equities and Fixed Income)
of UOBAM, said: “Across ASEAN, many corporate bond issuers may shy away from seeking ratings for their bond issuances due to the high fees that may be incurred or the time needed to obtain and to maintain the rating. As a result, investors including asset managers such as UOBAM have to rely on internal resources to determine the issuances’ investment merits. Greater visibility of credit ratings of bond issuers will also help benefit the corporate debt markets in the region. UOBAM has a strong track record in fixed income investing and is committed to using technology to deepen our capabilities. Through our collaboration with Value3, we will tap AI to automate our credit research and assessment processes and be far more efficient in our fixed income evaluation and investment management.”
Abhinav Mishra, Co-Founder and CEO of Value3, commented: “Different financial institutions will typically rely on their own methodology to assign credit ratings to unrated bonds, leading to inconsistent ratings in the market. Through our collaboration with UOBAM, we will bring our proprietary and award-winning AlgoCRED Al-platform to ASEAN to address the demand for standardised credit rating services for unrated bonds. This will help corporate issuers, especially small- and medium-sized enterprises, to be more transparent in their disclosure and to attract more investors for their bonds.”
The credit rating, research and reporting service is expected to be launched first in Singapore in December 2019 and subsequently in the other ASEAN markets.