20230308-招银国际-Fixed_Income_Daily_Market_Update_5页_854kb

CMBI Credit Commentary Summary

Core Content Overview

This document is a Fixed Income Daily Market Update from the Fixed Income Department of CMB International Global Markets Limited. It provides a comprehensive summary of market movements, key news, and analysis of the Chinese economy and global fixed income markets. The report also includes insights from the trading desk and analyst comments, highlighting the impact of macroeconomic factors and geopolitical tensions on credit markets.

Key Market Movements

• UST Rates: U.S. Treasury yields rose, contributing to a defensive market tone.
• Asia IG Bonds: Spreads widened by 1-2bps in the morning, with buyers focusing on short-end bonds.
• LGFV: Selling pressure on bonds with yields below 6%, while higher-yielding names from weaker regions saw increased demand.
• China SOEs: Notably underperformed due to renewed concerns over sanctions and geopolitical risks.
• TMTs: Initially tightened but retraced gains post-lunch.
• Financials: Strong performance, with bank T2s better bid by Chinese accounts.
• China HY Property: Stable, with CHINSC 24s up around 3.5pts.
• Macau Gaming: SANLTDs/STCITYs rose another 0.5-1pt after prior gains.
• India: VEDLNs gained 1.5-2pts.
• Renewables: RPVINS/GRNKENs up 0.5-1pt.
• Indonesia: LMRTSPs/LPKRIJs unchanged.
• AT1s and Perps: Generally held well, with some notable movements like HSBC 8 Perp, which saw significant liquidity drain and price increases.

Top Performers and Underperformers

Top Performers

• CHINSC 7 3/8 04/09/24: Price 64.9, Change +3.5
• VEDLN 8.95 03/11/25: Price 72.0, Change +1.8
• VEDLN 13 7/8 01/21/24: Price 86.7, Change +1.8
• VEDLN 6 1/8 08/09/24: Price 70.9, Change +1.8
• TSINGH 6 1/2 01/31/28: Price 50.7, Change +1.4

Top Underperformers

• CHNAAR 5 1/2 03/08/24: Price 91.5, Change -1.8
• GRNLGR 7 1/4 01/22/27: Price 43.8, Change -1.5
• XINHUZ 11 06/06/25: Price 80.4, Change -1.0
• CSCHCN 9 10/09/24: Price 84.3, Change -0.9
• HKIQCL 4 10/08/24: Price 95.3, Change -0.6

Macro News Recap

• U.S. Stock Markets: Declined, with S&P (-1.53%), Dow (-1.72%), and Nasdaq (-1.25%) falling due to hawkish Fed testimony.
• U.S. Treasury Yields: Rose, with 2/5/10/30 yields at 5.00%/4.31%/3.97%/3.88%, respectively.
• China's New Financial Regulator: Based on CBIRC, indicating regulatory changes.
• China Exports: Continued to drop, with a 6.8% YoY decline in 2M23, driven by weak global demand and supply chain adjustments.
• China Imports: Further declined due to commodity deflation and weak durable/capex demand, with significant drops in machine tools and integrated circuits.
• China's Trade Partners: Exports to the U.S. and EU weakened, while exports to ASEAN increased.

New Issues and Pipeline

• Jinjiang Road and Bridge Construction & Development: Issued a 364d bond with a coupon of 6.68%.
• CDB Leasing International: Pipeline for a 1yr USD bond at 5.70% with an A1/A/A+ rating.

News and Market Color

• Onshore Primary Issuances: 94 credit bonds issued with RMB74bn, representing a 1.9% YoY decrease.
• Adani Group: Prepaid INR73.74bn (cUSD902mn) of share-backed financing.
• Agile Group: Gauging interest in a RMB1bn (cUSD143mn) two-year bond.
• China Huarong AMC: CITIC Group now holds 26.46% stake.
• Jiayuan: Extended exchange offer deadline to 8 May, with 61.86% support.
• Putian State-Owned Assets Investment: Fitch affirmed BB+ rating with a negative outlook.
• Vedanta Group: Aiming to acquire an additional 6% stake in Hindustan Zinc.
• Wynn Macau: Completed a USD600mn 4.50% CBs issue due 2029.
• Yanlord: Mulling a 2yr USD bond issuance at a price lower than 10%.

Analyst Comments

• China Economy: Weak foreign trade signals no relief from global recession risk. CMBI expects a 3.5% drop in exports and 0.5% rise in imports for 2023.
• Policy Outlook: China is likely to maintain easing credit policies to support domestic demand and alleviate property stress.
• Market Sentiment: Buyers focused on short-end bonds, while high-beta names saw improved sentiment.

Disclaimer and Risk Information

• The report is not investment advice and is intended solely for information purposes.
• There are risks involved in trading any securities, and past performance does not guarantee future results.
• The information is not guaranteed for accuracy or completeness and may change without notice.
• CMBIGM may have conflicts of interest and does not assume responsibility for any reliance on the report.
• The report is subject to distribution restrictions in the UK, US, and Singapore.

Contact Information

• Fixed Income Department: Tel: 852 3761 8867 / 852 3657 6291
• Email: fis@cmbi.com.hk
• 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

Author Certification

• The author certifies that the views expressed reflect personal opinions and that there is no direct or indirect compensation tied to the report's content.
• No trading or dealing in the stocks covered occurred within 30 days prior to the report and will not occur within 3 business days after.