20240711-招银国际-Fixed_Income_Daily_Market_Update_8页_875kb

Fixed Income Credit Commentary Summary for July 11, 2024:

• Bond Market Update: The Asian IG bond market remained stable with slight tightening in some issues like KOBCOP'29 and MITCO'34, while VNKRLEs rebounded due to profit warning recovery. In Chinese IGs, front-end bonds widened; Indian bonds showed mixed movements. Notable in USD market: VEDLN bonds kept neutral outlook despite demerger-related changes. LGFV bond pricing highlighted gains.

• VEDLN Corporate Analysis: The planned demerger could improve funding access and data transparency for Vedanta Resources and Vedanta Limited, but financing costs surged due to debt restructuring. Key points: proceeds from asset sales aim to reduce debt; maturity profile lengthened, but higher yields constrain profitability. VEDL's dividend income supports debt obligations.

• China Economy: Deflation persisted with CPI at 0.2% YoY, driven by weak consumption and low pork prices; core CPI flat amid subdued durable goods demand. Expectations of prolonged deflation suggest cautious monetary easing, including possible RRR cuts and rate adjustments in response to Fed actions.

• Macro and Market News: US indices rose amid yield retreats; Asian new issues include Korean and Japanese corporate bonds. News highlights debt refinancing, credit downgrades, and potential policy shifts.