20240215-招银国际-Fixed_Income_Daily_Market_Update_5页_790kb

Market Summary

Today's fixed income market began with one-way buying in Asia, but rates stabilized post-overnight US CPI widening. Chinese investment-grade (IG) bonds remained stable to unchanged, while speculative-grade (SG) showed tightening for some names, but Chinese leasing and AMC bonds saw better buying. In the high-beta TMT sector, there was active two-way flow, and financials mixed, with HRINTH under better selling. Global bonds moved mixed, with US Treasury yields retreating across the curve.

Key trading highlights:

• Asian markets featured one-way buying initially, with rates stabilizing; Chinese IGs like HAOSHUA/SINOP/ used stable trading, while SOE/TMT benchmarks saw minor tightening.
• GZRFPR25-28 bonds traded higher at 5-7 points, supported by the Letter of Intent for selling One Nine Elms.
• RAKUTN shares rose 6% after reporting a 78% revenue increase; Asian new issues were quiet, with no priced deals but Adani Group saw ratings outlook changes.

Macro Economic Highlights

• Global markets ended higher: S&P 500 up 0.96%, Dow 0.40%, Nasdaq 1.30%.
• Fed Vice Chair Michael Barr emphasized needing more data on inflation before cutting rates; USD pulled back from a 3-month high to close at 104.71.
• US Treasury yields retreated; 2-, 5-, 10-, and 30-year yields reached 4.56%, 4.25%, 4.27%, and 4.45%, respectively.

Analyst Insights on GZRF

• GZRF is seeking approval for selling One Nine Elms through consent solicitation and exchange offers. This could involve exchanging USD bonds for senior unsecured notes (perps) backed by project cash flows.
• Uncertainties include: tranche structures, exchange caps (targeting ~USD800mn), fair pricing, project debt levels (original GBP772mn loan), and influence of seller Cheung Kong's ownership on bondholder decisions. Analysts question whether bondholders face limited opportunity costs and if the asset sale benefits them.
• The minimum consideration is USD800mn, translating to an average valuation (AV) of cHKD5,100/sq ft in Hong Kong. Approval thresholds and voting rights among bondholders remain unclear.

Market Movements and News

• Asia: China's properties dropped sharply, with CSCHCN24s down 130-163 points; renewables like GRNKEN fell. India's renewables declined after positive gains.
• Regional updates: Hong Kong bonds mixed, with LASUDE '26 down 17 points; China's properties led lower. Macau gaming names rose due to favorable sentiment.
• Top performers included CASHLD bond up 5-9 points, while CASHLD 4% '26 was a top underperformer down 163 points.

Disclosures and Risks

• This report contains inherent risks in securities trading; past performance is not indicative of future results. CMBIGM provides information as a service, and readers should consult financial advisors. Own investment banking relationships may pose conflicts of interest, and the report is for client use only.