20250610-招银国际-Fixed_Income_Daily_Market_Update_8页_820kb

CMBI Credit Commentary Summary

Core Content

This document is a Fixed Income Daily Market Update from CMBI Credit Commentary, focusing on The Asset Asian G3 Bond Benchmark Review 2025. It provides an overview of recent market movements, macroeconomic developments, and analyst insights on credit markets in Asia, particularly in China and Macau.

Main Points

Market Movements

• KR IG (Investment Grade) bonds: DAESEC/CITNAT 26-30s were 2-8bps tighter. PKX/LGENSO 27-35s tightened 1-4bps. FRESHK 25-28s tightened 10-20bps. LGFVs (Large Government Fixed Income Vehicles) were firm.
• Chinese IGs: BABAMEITUA/HAOHUA 27-35s were unchanged to 2bps tighter.
• Financials: CCAMCL/ORIEAS/GRWALL 26-31s tightened 1-5bps. BBLTB 34s/40s tightened 5-7bps.
• AU/JP: SMBCAC/SUMI/NAB/ANZ 26-33s were unchanged to 3bps tighter. ASAMLI 6.9/FUKOKU 6.8 Perps were down 0.2pt.
• EU AT1s: Under better buying from RMs/PBs. UBS Perps moved 0.2pt lower to 0.4pt higher.
• HK: NANYAN 34s tightened 3bps. NWDEVVL Perps rebounded 2.3-3.1pts, with 27-31s rebounding 0.6-2.4pts. HYSAN 7.2 Perp was up 0.3pt on PB buying. LIHHK 26s dropped 2.3pts after a 3.4pt decline over the last week.
• Properties: VNKRLE 27-29s moved 1.7-1.8pts higher. LNGFOR 27-32s were up 0.4-0.8pt. CHIOLI 26-43s were up 0.1-0.3pt. FTLNHD 25s were up 0.3pt following media report on Seazen’s potential bond offering. WESCHI/EHICAR 26-27s were down 0.3-0.4pt.
• SE Asia: VLLPM 27-29s dropped 2.1-2.2pts.

Macau Gaming Sector

• MPEL and SJM Holdings are both restructuring their satellite casino operations by 31 Dec'25.
• MPEL will discontinue Grand Dragon Casino and three Mocha Clubs, while seeking government approval for the continuation of the other three Mocha Clubs.
• SJM plans to acquire two casinos and discontinue seven satellite casinos.
• The closure of satellite casinos is expected to have limited impact on credit profiles, as gaming tables and staff costs will be reallocated.
• Top picks in the Macau gaming sector include MPEL, STCITY/STDCTY, and SJM Holdings.
• MGMCHI and WYNMAC'27 are highlighted as yield pick-up plays, trading at 43-106bps and 72bps above their US parent bonds, respectively.

Macau Gaming Bond Profile (Table 1)

China Economic Outlook

• Deflationary pressure persists, with May CPI remaining negative for the fourth consecutive month.
• CPI stayed flat at -0.1% YoY in May, slightly above market expectations. Sequential growth dipped to -0.2% from 0.1% in April.
• Core CPI edged up to 0.6% YoY from 0.5%, but MoM growth dropped to 0% from 0.2%.
• PPI further deteriorated to -3.3% YoY in May, missing market expectations. MoM growth remained flat at -0.4% for the third consecutive month.
• Deflationary pressures are expected to continue, with soft domestic demand, tariff policy changes, and intensified price competition as key factors.
• Policy expectations include additional fiscal stimulus, consumption support, and a potential 10bps LPR cut in H225 to counter deflation and support the economy.

Export Trends

• China's exports to the US further declined by 34.5% in May, despite a tariff truce.
• Transportation equipment surged, while property-related goods and personal tech products declined.
• Exports to Russia dropped significantly to -10.8% in May.
• Import growth is expected to slow from 1.1% in 2024 to 0.5% in 2025.
• USD/RMB exchange rate is expected to fluctuate within 7.20-7.25 before a moderate decline to 7.12-7.17 if a trade deal is reached.

News and Market Color

• Onshore credit bonds: 80 credit bonds were issued yesterday with RMB72bn raised. Month-to-date, 410 credit bonds were issued with RMB395bn raised, a 13.9% YoY decrease.
• Seazen Group plans to raise USD250mn to USD300mn via a bond issue for refinancing.
• Thai Oil repurchased and canceled USD115.287mn in TOPTB bonds and resolved a crude oil spill incident.
• Tata Motors plans to invest up to USD4bn in its passenger and electric vehicle businesses over the next five years.
• Universal Entertainment had its outlook changed to negative by S&P due to lack of turnaround.
• UPL unit Advanta Brazil announced a strategic asset sale of USD125mn.

Key Information

• Market sentiment in KR and HK was mixed, with some bonds tightening and others rebounding.
• Deflationary pressure in China is expected to continue, with fiscal and monetary stimulus likely in the second half of 2025.
• Macau gaming sector is undergoing restructuring, with limited credit impact expected.
• China's export growth is projected to decelerate from 5.9% in 2024 to 1% in 2025, with import growth also slowing.
• No new offshore Asia bond issues were priced today, with Fujian Jinshang Holding Group in the pipeline for a 3yr USD bond at 6.0% coupon.

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

Disclaimer and Disclosures

• The report is for informational purposes only and not investment advice.
• CMBI does not provide individually tailored investment advice.
• Risks are involved in trading securities, and actual outcomes may differ from the report's projections.
• The report is not an offer or solicitation to buy or sell any securities.
• Conflicts of interest may exist, and CMBI may have investment banking relationships with the companies discussed.
• Distribution is restricted to certain investors in the UK, US, and Singapore.