20240319-招银国际-Fixed_Income_Daily_Market_Update_6页_843kb

Summary of Fixed Income Credit Commentary (19 Mar 2024)

The report provides an update on fixed income markets, focusing on Asia and China. Key highlights include:

• Market Dynamics: The Asia IG space showed stable buying pressure yesterday, with new issues like CIMIC Group Ltd's USD 650mn 10-year bond at 7.0% and GZINFU's USD 250mn 2-year bond down 1bp from par. Trading in Chinese IGs was mixed, with companies like HAOTIANHOA and SOCGEN tightening yields, while TMT stocks saw slight declines. Property bonds, especially in Indian and Macau markets, were weaker due to investigations and regulatory concerns.

• Corporate Updates: EHICAR successfully completed a partial exchange offer, enhancing its credit profile and reducing refinancing risk; this may lead to an IPO catalyst. ADANI Group dismissed US bribery allegations as false and maintains a buy recommendation, with its stock unchanged today despite daily declines.

• China Economy: Economic data for February 2024 exceeded expectations, driven by strong exports, industrial output, and fixed asset investment. However, the property sector remains a drag, with housing sales declining and developers facing debt risks. CMBI keeps its GDP growth forecast at 4.8% for 2024. Retail sales improved modestly, with durable goods rebounding, but service activity slowed. Policy easing is expected, including targeted mortgage rate cuts and fiscal support for innovation and infrastructure.

• Risk and Outlook: Potential "Japanimation" concerns due to property weakness and deflation risks. CMBI anticipates further policy measures to boost demand and support high-quality development. New issues in the pipeline include Philippine bank debt, and upcoming redemptions like those for DALWAN and GZRFPR notes were noted. Swaps like Adani and Azure Power face scrutiny amid US investigations.

Overall, the market is mixed with opportunities in longer-dated bonds and select credit, supported by improving operational risks and policy tailwinds, but vulnerabilities persist in real estate and certain sectors.