20220816-招银国际-Fixed_Income_Daily_Market_Update_6页_793kb

报告摘要

CMBI Credit Commentary Summary

Core Content Overview

This document is a Fixed Income Daily Market Update by CMBI Fixed Income Department, providing insights into the current market dynamics, key sector movements, and macroeconomic developments in China and the broader Asia region. The report includes analysis on bond performance, liquidity conditions, government interventions, and economic indicators.

Main Market Observations

Fixed Income Market Activity

Markets were active with AT1s and SOE perpetuals (perps) being well sought after by onshore buyers, especially those with longer tenors and yields around 5%.
SOE Perps showed strength due to continued robust deployment demand from Chinese fund managers and structured products.
Onshore primary issuances saw 68 credit bonds issued yesterday with a total of RMB60bn, while the month-to-date total was RMB775bn, representing a 10.5% YoY decrease.

Top Performers

COGARD 6.5% '24 rallied 9-12pts.
CIFIHG 6.45% '24 climbed 3-7pts.
LNGFOR 3.375% '27 rose 9-12pts.
FUTLAN increased 2-6pts.
VEDLN 6 1/8 '24 gained 2.5-5pts.

Top Underperformers

AZUPOE 5.65% '24 declined 3.8pts.
AACTEC 3 3/4 '31 dropped 3.3pts.
ROADKG 7 PERP fell 2.6pts.
TAISEM 3 1/8 '41 decreased 2.2pts.
RISSUN 9 1/2 '23 lost 2.0pts.

Key Sector Analysis

Chinese Property Market

Government support through guaranteed RMB bonds by SOEs was reported, with potential beneficiaries including CIFI, COGARD, Longfor, and Seazen.
The news boosted market sentiment and led to equity and bond market rallies, with CIFI, COGARD, Longfor, and Seazen stocks up 11-16%.
Property sales and investment weakened significantly, with GFA sold dropping 29.2% YoY in July.
Developers faced liquidity stress, and the deleveraging in the property sector led to a hard landing in housing investment and sales.

China Economy Outlook

GDP growth is expected to rise from 3.5% in 2022 to 6.5% in 2023.
July growth slowed, with VAIO at 3.8% YoY and service output index at 0.6% YoY, down from 3.9% and 1.3% in June.
Housing market deteriorated, but may gradually recover in 3Q22.
Retail sales rose 2.7% YoY in July, down from 3.1% in June, with consumer confidence impacted by the housing slump and resurgence of Covid-19.
Manufacturing investment slowed, while infrastructure investment remained strong, driven by grain and energy supply security sectors.

Macro News Highlights

U.S. Market

Stock indexes (S&P, Dow, Nasdaq) rebounded, showing a positive trend.
Crude oil prices slumped, with WTI and Brent closing at 88.04 and 93.47, down 4.4% and 4.77% respectively.
This may reduce inflation pressure and lower the likelihood of a Fed rate hike in September.
U.S. treasury yields fell, with the yield curve steepening.

Analyst Comments

The government is likely considering state-sponsored support to avoid a credit crisis in the property sector and to stabilize the financial system.
The support mechanism involves guaranteed RMB bonds, with flexible use of proceeds. Key questions remain regarding the impact on offshore USD bondholders, issuance location, and subordination of offshore debts.
PBOC rate cuts and liquidity easing are expected to support the property market and boost economic growth.
Local governments are under fiscal pressure, leading to gradual relaxation of zero-Covid policies and mortgage policies.

New Issues and Pipeline

No offshore Asia new issues priced today.
No offshore Asia new issues in the pipeline today.

Risk and Disclaimer

The report is not investment advice and does not guarantee accuracy or completeness of information.
Investors are advised to consult professional financial advisors before making decisions.
Conflicts of interest may exist due to CMBIS's investment banking relationships with issuers.
The report is intended for specific investors only and not for general distribution.

Contact Information

Glenn Ko, CFA
Email: glennko@cmbi.com.hk
Tel: (852) 3657 6235
CMBI Fixed Income Department
Tel: 852 3761 8867 / 852 3657 6291
Email: fis@cmbi.com.hk
CMB International Securities Limited
A subsidiary of CMB International Capital Corporation Limited, itself a subsidiary of China Merchants Bank.