20260717-招银国际-Fixed_Income_Daily_Market_Update_7页_913kb

CMBI Credit Commentary Summary

Core Content Overview

This document provides a comprehensive market update and analysis from the Fixed Income Department of CMBI, covering Asian investment-grade (IG) credits, key market movements, macroeconomic insights, and new issues in the offshore Asia market.

Key Market Movements

• Asian IG Credits:
  • Remained largely unchanged, with a 2bps widening.
  • New USD and CNH CINDBK Perps showed minimal movement.
  • GLPSP 4.6 Perp declined by 0.3pt.
  • EHICAR 29 rose by 0.4pt, while EHICAR 26 fell by 0.3pt.
• TW Lifers:
  • The market remained unchanged to 2bps wider.
  • Shin Kong Life's 1H26 earnings recovery outperformed other Taiwan life insurers.
• Higher-Yielding Space:
  • USD CINDBK 5 Perp edged up 0.5pt.
  • CNH CINDBK 2.3 Perp rose 1.5pts due to top-up demand from non-bank Chinese RMs.
  • CNH market saw a 0.2-0.5pt increase, led by 10yr benchmarks.
  • LGFV space saw HFs and AMs buying high-yielding papers, while <5%-yielding USD issues faced selling pressure.
• Top Movers:
  • Top Performers: INDYIJ 8 3/4 05/07/29 (+0.6), SOFTBK 8 1/4 10/22/31 (+0.4), LIFUNG 5 1/4 PERP (+0.4), SOFTBK 7 1/2 07/10/35 (+0.3)
  • Top Underperformers: CRNAU 9 1/4 10/01/29 (-2.9), ARAMCO 5 7/8 07/17/64 (-0.5), PRXNA 4.027 08/03/50 (-0.5), NWDEVL 4 1/2 05/19/30 (-0.5), NWDEVL 6 1/4 PERP (-0.5)

China Economic Outlook

• GDP Growth:
  • Real GDP growth slowed to 4.3% YoY in 2Q26, the weakest since 2022.
  • The GDP deflator turned positive at 1.5% after 12 quarters of deflation.
• Economic Structure:
  • K-shaped growth pattern persists, with export and AI sectors outperforming others.
  • Weakness in consumption and property downturn continue to drag overall growth.
• Policy Expectations:
  • Weak 2Q growth may lead to a pro-growth signal at the July Politburo meeting.
  • Policy support in 2H26 is likely to be targeted, focusing on supply-side and moderate demand-side measures.
  • CMBI expects 2026 GDP growth to moderate to 4.6% (down from 4.7%), from 5% in 2025.
• Key Drivers:
  • Demand payback after trade-in subsidies.
  • Property-related fiscal stress at local governments.
  • Weak household income and employment expectations.

Macro News Recap

• U.S. Markets:
  • S&P, Dow, and Nasdaq all declined on Thursday.
  • Initial Jobless Claims rose to +208k, below market expectation.
  • Core Retail Sales fell -0.2% MoM.
  • Philadelphia Fed Manufacturing Index rose to 41.4, above market expectation.
• U.S. Treasury Yields:
  • 2/5/10/30-year yields at 4.16%/4.28%/4.57%/5.09%.
• Sectoral Trends:
  • Consumer demand remained weak despite a June rebound.
  • Manufacturing, infrastructure, and property investment all contracted in June.
  • Export-facing sectors like transport equipment and computers/electronics showed strong growth.

Analysis of Taiwan Life Insurers

• Shin Kong Life:
  • Recorded a significant after-tax profit of TWD4.9bn in Jun'26 and TWD22.5bn for 1H26.
  • Turnaround driven by investment gains and improved equity-to-asset ratio.
• Fubon Life:
  • 1H26 net profit surged to TWD55.6bn from TWD24.2bn in 1H25.
  • Domestic equity exposure at 9.8% of its investment portfolio.
• Nan Shan Life:
  • Similar earnings pattern to Fubon Life, but with lower domestic equity exposure at 5.5%.
• Credit Analysis:
  • CMBI pairs CATLIF and FUBON for relative value assessment, preferring FUBON 5.45 12/10/35.
  • NSINTW 5 7/8 03/17/41 is preferred due to better risk-return balance, lower cash price, and higher liquidity.
  • SHIKON 6.95 06/26/35 is noted for its higher yield and less favorable rating.

Offshore Asia New Issues

• Priced:
  • Türkiye Is Bankasi AS: 500mn USD, 12NC7, 8.4% coupon, rated -/-/B.
  • New Development Bank: 1750mn USD, 3yr, 4.375% coupon, priced at SOFR MS+39, unrated.
• Pipeline:
  • Neijiang Road and Bridge Group: 5yr, 5.3% coupon, unrated.

Key News and Market Color

• Onshore Primary Issuances:
  • 125 credit bonds issued yesterday with RMB132bn.
  • Month-to-date total: 1,056 credit bonds with RMB1,066bn raised.
• Macau Revenue:
  • Increased by 0.8% YoY in 2Q26.
• BHP Group:
  • Invests USD900mn in iron ore project in Western Australia.
• Continuum Arm:
  • Plans to early redeem USD432mn COGREN 9 ½ 02/24/27 on 24 Aug'26.
• Dalian Wanda Group:
  • Close to finalizing USD150mn loan to refinance a due-Sep'26 loan.
• Hyundai Motor & SoftBank:
  • Hyundai Motor to acquire SoftBank's stake in Boston Dynamics.
• JD.com:
  • Acquired landmark London office building for UK headquarters.
• Amman Mineral Nusa Tengara:
  • Sumbawa smelter fully operational since Jun'26, targeting 16 tons of gold and 162k tons of copper concentrate in 2026.
• Sinochem & Syngenta:
  • Likely to delay USD5bn Hong Kong IPO to 2027.
• SoftBank Group:
  • S&P revised outlook to stable from negative and affirmed BB+ rating.
• TSMC:
  • 2Q26 net revenue up 36% YoY to TWD1.3tn (cUSD39.5bn).

Disclaimer and Risk Information

• Investment Risks:
  • There are risks involved in trading any securities.
  • Past performance does not guarantee future results.
  • Information is not tailored to individual investors.
• CMBI Disclaimer:
  • The report is for informational purposes only.
  • No liability is assumed for any reliance on the report.
  • Information is based on public sources and may be subject to change.
• Distribution Restrictions:
  • Report is intended for CMBI clients and not for general distribution.
  • Specific restrictions apply to UK, U.S., and Singapore recipients.

Contact Information

• Fixed Income Department:
  • Tel: 852 3657 6235 / 852 3900 0801
  • Email: fis@cmbi.com.hk
• Analysts:
  • Cyrena Ng, CPA 吴蒨瑩: (852) 3900 0801 / (852) 3761 8919
  • Yujing Zhang 张钰婧: (852) 3900 0830
  • Email: zhangyujing@cmbi.com.hk

Author Certification

• The author certifies that all views expressed accurately reflect personal views.
• No compensation was directly or indirectly related to the views in this report.
• The author and associates have not traded or dealt in the stocks covered in the last 30 days and will not do so within 3 business days after the report's issue date.

Important Disclosures

• No Investment Advice:
  • CMBIGM does not provide individually tailored investment advice.
  • Investors are advised to consult with a professional financial advisor.
• Conflicts of Interest:
  • CMBIGM may have positions or act as principal in securities of companies mentioned.
  • Recipients should be aware of potential conflicts of interest.