20240125-招银国际-Fixed_Income_Daily_Market_Update_5页_961kb

Fixed Income Credit Commentary Summary

Market Overview

• Sentiment remained firm this morning with new issues like KORELE '27 tightening by 3bps, and Korean corporate bonds seen 1-3bps tighter. Chinese IG benchmarks were stable, while high-beta IGs and LGFVs attracted strong buying interest.

Trading Insights

• Asia IG space had a strong session, with mixed flows on new issues. Chinese banks, such as BOCOM and ICBCAS, saw heavy selling, widening spreads. High-yield names like NWDEVL and SHUION showed gains, while VNKRLE bonds rose due to secondary demand. LGFVs were actively bid amid supportive market conditions.

China Economy Policies

• The State Council announced a new package of supportive policies to boost investor confidence, including a 50bps RRR cut by the PBOC and potential LPR reductions. While this may moderately improve short-term sentiment, more aggressive measures like sharp mortgage rate cuts are needed to counter deflation risks. SOE policies encourage enhanced dividend payouts and stock buybacks.

Macro News Recap

• US markets mixed on Wednesday: S&P +0.08%, Dow -0.26%, Nasdaq +0.36% divergence. Euro-zone manufacturing and services PMI at 46.6/48.4, lower than expected 44.8/49.0. US Treasury yields edged up, impacting fixed income sectors.

Specific Deals and Analyst Views

• NWDEVL announced a USD7bn MTN program listing; bonds rose 0.02-0.06pts in price. Analysts recommend certain perps for opportunistic repurchases. Offshore Asia new issues include Korea Electric Power Corp's 3yr bond at T+80. Policy shifts aim to stabilize the economy but face limitations due to exchange rate concerns and banking NIM pressures.