20250428-招银国际-Fixed_Income_Daily_Market_Update_6页_843kb

CMBI Credit Commentary Summary

Core Content

This document provides a comprehensive market update and analysis on fixed income instruments, focusing on recent price movements, macroeconomic developments, and policy outlooks, particularly in the context of China's response to the US tariff shock. It also includes insights from the trading desk and analyst comments, along with new issue updates and important disclosures.

Market Update

Key Price Movements

• Fixed Income Instruments:

  • HANFGI 528s/HWFPCO 4.7528s widened 2-3bps.
  • KTGC 528s widened 1bp.
  • BABATENCNT 30-35s tightened 2-5bps.
  • NIPLIF/MYLIFE 55s and HSBC Perps were up another 0.3-0.4pt.
  • BBLTB 34-40s tightened 5bps on PB chasing.

• Top Performers:

  • UPLLIN 5 1/4 PERP: +3.1pt
  • NWDEVL 5 7/8 06/16/27: +2.6pt
  • RILIN 4 7/8 02/10/45: +2.5pt
  • CHGRID 4 3/8 05/22/43: +2.0pt
  • CHGRID 4 05/04/47: +2.0pt

• Top Underperformers:

  • GARUDA 6 1/2 12/28/31: -0.9pt
  • MPEL 5 3/4 07/21/28: -0.7pt
  • NICAU 11 1/4 10/21/28: -0.5pt
  • HBTUID 7 1/2 07/10/26: -0.5pt
  • TOYOTA 5.123 07/13/33: -0.4pt

Trading Desk Comments

• BBLTB:

  • ROA and ROE improved in 1Q25 due to fee and other income.
  • Maintain buy on BBLTB 5 Perp (AT1), BBLTB 3.466 09/23/36 (T2), and BBLTB 6.056 03/25/40 (T2).
  • BBLTBs were 0.1-1.5pts higher post results announcement.

• Performance Highlights:

  • NIM dropped to 2.89% in 1Q25 from 3.06% in 1Q24.
  • Net fee income increased by 10% yoy to THB7.6bn.
  • ECL increased by 8% yoy, reflecting economic uncertainties.
  • Cost-to-income ratio dropped to 45.5% in 1Q25 from 47.1% in 1Q24.
  • Gains on financial instruments reached THB4.9bn in 1Q25.
  • CET1 ratio dropped to 17.3% from 17.8% as of Mar'25.

• Capital and Liquidity:

  • BBLTB's capital buffer remains above regulatory minimum.
  • BBLTB's asset quality is better than peers, despite slight deterioration in NPL ratios.

China Policy Outlook

• Politburo Meeting (25 Apr):

  • China is preparing for a prolonged Sino-US conflict and will not yield to US pressure.
  • Proposed policy measures for 2Q25 include:
    • Additional cuts in RRR and LPRs.
    • Accelerated government bond issuance and fiscal spending.
    • Employment support, especially in sectors affected by tariffs.
    • Expansion of trade-in subsidies for durable goods.
    • Promotion of the "Al+" initiative and sci-tech board in bond market.
    • Opening up the service sector and strengthening trade ties with non-US economies.
    • Stabilizing the housing and capital markets.

• Tariff Impact Analysis:

  • The 2025 tariff shock is more severe than the 2018 trade war.
  • Estimated GDP growth reductions:
    • World: 0.9ppts
    • US: 1.2ppts
    • China: 1ppt
    • Eurozone: 0.5ppts
  • MSCI World Index fell 16.3% in 2025 tariff shock, less than in 2018 trade war.
  • Short-term impact is expected to be smaller than past crises like the 2008 financial crisis, 2020 pandemic, and 2022 recession panic.

• RMB and Stock Market Stability:

  • China aims to keep RMB and stock markets stable to counter US pressure.
  • Tariff costs may be transmitted to US inflation, potentially leading to US policy adjustments.

Offshore Asia New Issues

Priced Issues

• Taiyuan State-owned Investment:
  • Size: USD200mn
  • Tenor: 3yr
  • Coupon: 5.1%
  • Priced at 5.1%
  • Unrated

Pipeline Issues

• Kookmin Bank:

  • Currency: USD
  • Tenor: 3yr/5yr
  • Pricing: T+120/T+125
  • Issue Rating: Aa3/A+-

• POSCO Holdings:

  • Currency: USD
  • Tenor: 5yr/10yr
  • Pricing: T+180/T+200
  • Issue Rating: Baa1/A-/-

• Xianning Urban Development (Group):

  • Currency: USD
  • Tenor: 3yr
  • Pricing: 8.0%
  • Issue Rating: Unrated

• Zhongyuan Asset Management Co:

  • Currency: USD
  • Tenor: 3yr
  • Pricing: 6.2%
  • Issue Rating: -/-/BBB

News and Market Color

• Onshore Primary Issuances:

  • 168 credit bonds issued last Friday with RMB180bn.
  • Month-to-date: 2,104 credit bonds issued, totaling RMB1,993bn, a 10.3% yoy increase.

• Key News Highlights:

  • CHIOLI: China Overseas Land's 1Q25 operating profit dropped 15% yoy to RMB5.7bn.
  • COGARD: Country Garden to raise RMB1.3bn by selling 11% stake in LandSpace Technology.
  • GRNKEN: ORIX terminates Greenko stake sale plan.
  • FRESHK: Far East Horizon cuts conversion price of FRESHK 2.5 07/08/28 to HKD5.19 from HKD5.45.
  • NSANY: Fitch downgraded Nissan Motor to BB from BB+ due to worsening market conditions and tariffs.
  • SINOCH: Sinochem may lose control over Pirelli despite 37% stake.
  • VEYONG/XINAOG: ENN Natural Gas to consider privatization of ENN Energy.

Important Disclosures

• The report is for informational purposes only and does not constitute investment advice.

• CMBIGM does not provide individually tailored investment advice.

• Past performance does not guarantee future results.

• The information is based on publicly available data and may be subject to change.

• CMBIGM may have conflicts of interest and may trade in securities mentioned in the report.

• The report is intended for specific recipients and may not be reproduced or distributed without consent.

• Disclaimer:

  • The report is only provided to certain categories of investors in the UK, US, and Singapore.
  • In the US, the report is for "major US institutional investors" only.
  • In Singapore, CMBISG is responsible for the report's content to the extent required by law.

Author Certification

• The author certifies that the views expressed accurately reflect their personal views.
• No compensation was directly or indirectly related to the specific views in this report.
• The author and their associates did not trade in the securities covered in the report within 30 days prior to its release.
• The author will not trade in the securities covered in the report for 3 business days after release.
• The author does not serve as an officer of any Hong Kong-listed company mentioned in the report.
• No financial interest exists in the companies covered in the report.

Summary of Key Points

• Market Trends: BBLTB's instruments showed improved performance, with several bonds tightening or rising.
• China's Response: Aggressive fiscal stimulus is expected in 2H25 to counter the US tariff shock.
• Macro Impact: The 2025 tariff shock is more severe than the 2018 trade war but less impactful than past crises.
• Policy Measures: China plans to cut RRR and LPRs, accelerate fiscal spending, and support employment and consumption.
• New Issues: Several offshore Asia issuances are highlighted, including priced and pipeline instruments.
• Disclosures: The report is not investment advice and is subject to legal restrictions based on the recipient's location.