20240105-招银国际-Fixed_Income_Daily_Market_Update_5页_849kb

Fixed Income Credit Commentary Summary - Jan 5, 2024

Market Overview

• Fixed income markets showed tighter UST yields across the curve, with Asian regions remaining relatively soft. New issues included Indonesia's 5-, 10-, and 30-year bonds priced higher than expected, indicating strong demand for emerging market debt.
• Chinese IG benchmarks widened slightly, with longer-dated bonds under better selling pressure, while high-quality LGFV/SOE perpetuals and CNAT1 securities continued to be well-bid due to supportive trading in prop desks.
• Global markets were mixed, with US ADP employment data exceeding expectations and equity indices showing gains and losses.

Key Trading Insights

• Treasury yields increased moderately overnight, with yields on 2-, 5-, 10-, and 30-year bonds reaching 438%, 397%, 399%, and 413%, respectively.
• Chinese IG names like HAOHUA widened by 3-5bps, while SOEs such as SINOPE and CNOOC faced better selling. High-beta TMT stocks saw slight gains, and AT1 securities showed mixed performance.
• Offshore Asia saw active trading, with Korean HY bonds extending losses, while industrial and property names in China and Macau showed gains, supported by firm demand in regional markets.
• Top movers included Vedanta Resources and NWDEVL, with notable price changes reflecting short squeezes and profit-taking interest.

Analyst Comments

• CIFIHG Restructuring: Plans to extend offshore debts by 2-9 years through creditor options involving maturity extensions and partial haircuts, aiming to support debt repayment over USD33-42 billion. Creditor negotiations ongoing as of January 2023 defaults.
• ZHPRHK Recap: RSA secured 26.97% bondholder support from seniornote holders, proposing new USD bonds with no principal hair-cut, collateralized by subsidiaries and mandatory redemptions.

New Issues and Pipeline

• Offshore new issues included Indonesia's 5- and 10-year bonds and Export-Import Bank of Korea's tranches. Onshore primary issuances reached RMB149 billion month-to-date, a 61.4% YoY increase.
• Pipeline includes Petrochemical joint ventures with ratings updates.

Macro and News Highlights

• US jobless claims lower than expected, mixed S&P, Dow, and Nasdaq performance.
• Onshore events: DALWAN confirms payment readiness, Lippo Malls improves leverage, and Yanlord seeks to redeem bonds via new financing.
• Disclosures note risks in securities trading and conflicts of interest; reports are for client use only.

This summary covers the key market dynamics, issuer updates, and critical events from the report. For detailed analysis, refer to the full commentary.