20230802-招银国际-Fixed_Income_Daily_Market_Update_4页_711kb

Summary of Fixed Income Credit Commentary (August 2, 2023)

Market Conditions

The market was quiet on August 2, 2023. Asian investment-grade (IG) bonds saw overall widening of 1-5 basis points. New issues included GSCCOR '28 and CCAMCL '27, which remained unchanged. The curve for Hanaro Corporation (HRINTH) moved down by 0.25-0.50 points. In Chinese SOEs, SOE perps saw profit-taking, while LGFV names attracted buying; specific bonds like TENCENT (TMT benchmark) edged tighter. China Infrastructure (CHINSC) proposed a RMB 700mn three-year CBICL-backed medium-term note issuance. Trading comments highlight mixed Asian markets outside China due to new issues and curved movements.

Key Developments and Analysis

• Macao Gaming: Gross gaming revenue (GGR) is accelerating its recovery, with a significant jump in July. EBITDA turned positive in key operators due to reduced capital expenditure and improved funding access. Rating support is expected for Macau gaming bonds, with recommendations for MPEL, SJM, and STCITY for better risk-return profiles.
• New Issues: Offshore Asia include recent priced issues like GSCCOR and CCAMCL bonds, with pipeline activities involving Huatai Securities. Onshore primary issuance saw RMB 47bn raised, lower year-on-year. Events include Country Garden's put option exercise and CHINSC's potential bond offering.
• Macro and Markets: US markets mixed day, with PMI data showing improvement. Fitch downgraded the US long-term rating. Asian and other regional bonds like Vedanta Resources showed mixed movements.
• Analyst Insights: Focus on positive credit catalysts in Macau, with favorable price actions recommended. Bonds with high yields continue to attract interest.

Key News Recap

Macau GGR recovery accelerates, supporting credit stories. US PMI data positive; Fitch downgrade impacts US debt outlook. Asian bond prices stable, with China and Macau leading movements.