20231102-招银国际-Fixed_Income_Daily_Market_Update_6页_880kb

Report Summary: Fixed Income Commentary - November 2, 2023

The report provides an overview of Asian fixed income markets, focusing on bond movements, sector performance, and economic updates as of November 2, 2023.

Key Market Movements

• Asian IG benchmarks tightened by 1-3 basis points, with VNKRLE Index rising 5-275 points following news on refinancing.
• Macau gaming bonds saw modest gains amid strong GGR growth.
• BTSDF (Health & Happiness) bonds remained stable, with revenue growth and active buyback efforts.
• Trading activity showed mixed results across sectors: Chinese TMT and financial bonds tightened further, while AMC and property-related bonds experienced price declines.
• US macro data included a Fed rate hold, ADP employment report, ISM PMI, and Treasury yield retreats.

Sector-Specific Analysis

• Macau Gaming: GGR growth is robust in 2023, with estimates suggesting full-year revenue of MOP174-178 billion and a 31.2-32.2% YoY increase. Operators are in refinancing discussions to extend maturities, with bonds like MGMCHI and WYNMAC offering attractive yields.
• BTSDF: Revenue for the first nine months of 2023 increased by 11.9%, driven by Australian sales and product launches. The company is actively repurchasing bonds and refinancing through onshore loans to improve capital structure.

Trading Desk Insights

Frontend activity favored RM buying in Chinese banks and AT1 securities, with gains in longer-dated Macau gaming bonds but losses in some international notes. Mixed flows occurred in other sectors, with Indian and Indonesian names showing resilience.

Macro News Recap

US indices rallied post-FOMC, with mixed data points: employment stronger than expected, manufacturing PMI lower than expectations. China's manufacturing PMI also fell short of forecasts. US Treasury yields retreated, reaching lower levels at various maturities.

Analyst Comments

• Recommendations include buying Macau gaming bonds for better risk-return profiles and leveraging on parent company bonds.
• For BTSDF, opportunistic bond purchases are advised, with focus on improving liquidity and reducing debt costs.

Additional Highlights

• Ongoing news includes potential tender offers and new debt restructuring proposals, affecting bonds like CQNANA and EVERRE.
• New issues in the pipeline, such as BOCAVI’s bond, with market volumes reflecting stable activity.

This summary captures the core trends and analysis without delving into granular details or disclosures.