20231201-招银国际-Fixed_Income_Daily_Market_Update_5页_809kb

Fixed Income Credit Commentary Summary

Date: December 1, 2023

Market Overview: Asian Investment Grade (IG) benchmarks remained stable today, with better selling pressure observed on bank T2s and AMC sector bonds, but buying interest was noted for long-term CCA MC Land TAIS E securities. In the Chinese market, SOE and TMT benchmarks showed slight widening, with HAO HUA/CNOOC +1-2bps and BABA curve +3-5bps, while financials like Chinese bank T2s widened 2-5bps. High-beta TMTs continued under selling, e.g., MEITUA30 +2bps and XIAOMI30 +1-4bps. In Korea/Japan, SMBC AC/HYUELE papers were better bought, but HK Corp performance was mixed. Hong Kong and Chinese properties drifted lower, with SHUION24-26 down 17-25pts and CSCHCN sfell 13-17pts lower. Moody's downgraded Gemdale (GEMDAL) and other names.

China Economy: Caixin manufacturing PMI dropped to 49.4% in November, below expectations, signaling weak domestic and international demand. The manufacturing sector remained in contraction, with new orders, exports, and production indices falling. Employment minimally improved but stayed in contraction. The services PMI also contracted for the first time in 2023 after holiday demand slackened. Construction rebounded due to fiscal stimulus. CMBI maintains GDP growth forecast at 5.3% for 2023 and 4.8% for 2024, calling for additional policies like expanded fiscal and monetary easing.

Issuer-Specific: Weibo issued USD300mn CB with 1375% coupon; this offering is unlikely to significantly impact credit, as the company has excess cash and no pressing refinancing needs, though it could support share price through buybacks.

Macro News Recap: Thursday saw US markets mixed (S&P +0.38%, Dow +0.147%, Nasdaq -0.23%); October core PCE at 3.5% YoY met expectations; initial jobless claims higher than expected were lower than forecast. Euro-zone November CPI at 2.4% YoY was below expectations. China Caixin Nov manufacturing PMI at 50.7% exceeded expectations.

Trading Desk Insights: Overnight UST yields tightened by 7-9bps; Asia IG experienced profit-taking, particularly on frontend papers. Specific bonds highlighted: RDHGCL7803/20/24 +30pts, CSCHCN912/11/24 -45pts, GEMDAL49508/12/24 -30pts; top performers included this week's movers like RDHGCL and CSCHCN.

New Issues: No onshore or offshore Asia new issues priced today; pipeline includes Guangzhou Development District USD-denominated bond.

Other News: CARINC S&P withdrew rating at company request; CIFIHG CEO resigned; Country Garden involved in real estate symposium; various developments face financial challenges.

Disclosures: CMBIGM has investment banking relationships with some issuers; report based on public information, subject to risks; not personalized advice; consult professionals; liability limited.