20230316-招银国际-Fixed_Income_Daily_Market_Update_6页_867kb

CMBI Credit Commentary Summary

Core Content Overview

This document provides a detailed market update and analysis from the Fixed Income Department of CMBI, covering key developments in Asian fixed income markets, China's economic outlook, and relevant macroeconomic news. It also includes information on new issues, tender offers, and market sentiment.

Main Market Movements

• Asian IG Markets:

  • T2 spreads widened by 5-15bps, with heavy selling on lower-rated names.
  • Korean IG names widened by 10-15bps.
  • In China SOEs, the long end of SINOPE, CNOOC, and CHIOLI performed well due to the pull-back in UST 10y yields.
  • HAOHUA tightened by 10bps.
  • TMT benchmark names were firm, but high beta tech names were better offered.
  • The TENCNT curve tightened by 10bps, with 30s quoted at T + 165.
  • Financials space opened firm, but AMC names were stable to slightly weaker, with better selling on ORIEAS, CCAMCL, and HRINTH.
  • Bank T2s initially tightened by 10-25bps but closed 5-10bps wider due to risk-off sentiment after the CS debacle.
  • New BNKEA 27 was first traded 20bps tighter to T + 230 but widened to T + 245.
  • CICCHK 26 tightened by 15-20bps but closed only 6bps tighter.
  • IG spreads roughly retrieved 5-15bps from the intra-day tight post-CS headlines.
  • China property space was mixed, with benchmark names stable to weaker, and some names showing price increases or markdowns.
  • In Indian space, VEDLNs gained 0.5-1.5pts, and renewables GRNKENs were also higher.
  • Indonesian LMRTSPs dropped by 1-1.5pts.

• AT1/Perp/LGFV Spaces:

  • Sentiment deteriorated significantly after CS headlines.
  • HSBC 8 Perp rallied c1pt after support from the Swiss National Bank.
  • HSBC AT1 retraced to low-to-mid-99 due to selling from London to regional PB buyers.
  • Old HSBC and STANLN papers were better bid by regional PBs.
  • Thai names like BBLTB and KBANK perps were quoted higher.
  • Chinese names remained stable, though some retraced slightly due to RM selling.
  • CTIH 6.4 Perp climbed to 101 due to RM buying.
  • FFL perps were flat with PB demand.
  • LGFVs saw small better selling, driven by structured products unwinding and RM trimming front-end positions.

Key Economic Outlook

• China Economy Recovery:
  • The recovery is underway, with service activity, housing market, and infrastructure investment outperforming expectations.
  • Industrial output and exports were weaker than expected, mainly due to the slowdown in exports and cautious SME behavior.
  • The service output index rose 5.5% YoY in 2M23, showing strong rebound.
  • Housing sales and starts improved significantly, with GFA sold and started declining less sharply than in 2022.
  • Retail sales slightly beat expectations, with strong performance in medicine, catering, and petroleum products.
  • Auto, communication equipment, and cultural & office goods saw further deterioration in retail sales.
  • Fixed asset investment (FAI) grew from 5.1% in 2022 to 5.5% in 2M23, driven by public utility, railway transportation, and public facility management.
  • Property development investment recovered faster than expected.
  • China's exports of goods are expected to drop 3.5% in 2023 due to overseas recession and disinflation.
  • The PBOC is expected to maintain easing credit policy to support domestic demand, with money market rates fluctuating around repo rates in 2Q23 and potential easing in 2H23.

New Issues and Tender Offers

• LPKRIJ Tender Offers:
  • Lippo Karawaci raised the tender cap to USD120mn for LPKRIJ'25 and '26, accepting USD120mn in total.
  • LPKRIJ'25 and '26 were accepted at 87 and 77, respectively.
  • The two rounds of tender offers reduced USD debts by USD344.7mn, from USD822mn at the start of the year.
  • The due for LPKRIJ'25 was lowered to USD237.1mn, a 41% decrease from the previous amount.

Top Movers

Top Performers

• AIA 4 1/2 03/16/46: 93.2 (+3.2)
• TAISEM 4 1/2 04/22/52: 97.4 (+2.6)
• AIA 4 7/8 03/11/44: 98.4 (+2.3)
• SINOPE 4.6 09/12/48: 96.0 (+2.3)
• JMHLDS 2 1/2 04/09/31: 86.1 (+2.2)

Top Underperformers

• GRNLGR 6 1/8 04/22/25: 46.5 (-4.5)
• GRNLGR 6 3/4 03/03/26: 44.7 (-3.8)
• GRNLGR 5.9 02/12/25: 48.5 (-2.2)
• BNKEA 5 7/8 PERP: 94.0 (-2.1)
• LMRTSP 7 1/4 06/19/24: 67.1 (-2.0)

Macro News Recap

• U.S. Markets:
  • U.S. stock markets were weak, with S&P down 0.70%, Dow down 0.87%, and Nasdaq up 0.05%.
  • The financial sector dragged the markets, but sentiment stabilized after the Swiss National Bank provided liquidity to Credit Suisse.
  • U.S. Feb PPI was +4.4% YoY, lower than the forecast of 5.2%.
  • U.S. Treasury yields fell, with 2/5/10/30 yields at 3.93%/3.59%/3.51%/3.70%, respectively.

Important Disclosures

• This report is for informational purposes only and is not investment advice.
• The information is based on publicly available data and may be subject to change.
• CMBIGM is not liable for any losses incurred from relying on this information.
• The report is intended for distribution to specific institutional investors and is not available to the general public.
• CMBIGM may have conflicts of interest and may act as a market maker or principal in the securities mentioned.

Contact Information

• Fixed Income Department
  CMB International Global Markets Limited
  Tel: 852 3761 8867 / 852 3657 6291
  Email: fis@cmbi.com.hk

• Analysts:

  • Glenn Ko, CFA: (852) 3657 6235 | glennko@cmbi.com.hk
  • Cyrena Ng, CPA: (852) 3900 0801 | cyrenang@cmbi.com.hk
  • Jerry Wang: (852) 3761 8919 | jerrywang@cmbi.com.hk