20260518-招银国际-Fixed_Income_Daily_Market_Update_7页_754kb

CMBI Credit Commentary Summary

Core Content Overview

This document provides a comprehensive market update and analysis from CMBI's Fixed Income Department, covering bond market movements, key company updates, and macroeconomic insights, particularly focusing on the implications of the Xi-Trump summit and the performance of various fixed income instruments.

Key Market Movements

• Asian Investment Grade (IG) Bonds: The long-end of the Asian IG bond market widened by 1-3 bps.
• Asian AT1s and Insurance Subs: These instruments saw a leak of 0.3-0.5 points due to better selling.
• Specific Bond Performance:
  • HYSAN 4.85 Perp lost 1.2 points.
  • GENTMK 8.3 Perp was 0.8 points lower.
  • NDPAPE 14 Perp/ACENPM 4 Perp edged 0.3-0.4 points higher.
  • EBIUHs remained unchanged.
• Rakuten Bonds:
  • RAKUTN 8.125 Perp was 0.2 points lower, but the team maintains a "buy" recommendation due to yield pick-up and good carry.
  • RAKUTN 6.25 Perp is viewed with neutrality, with a preference for shorter tenors due to rate volatility expectations.
• Other Notable Movers:
  • ADGREG and AREN RJ rose by 0.3-1.0 points.
  • YANTZE and PETMK declined by 1.5-1.4 points.
  • PMBROV and GRNLGR also showed positive movements.

Key Company Updates

• Emirates NBD: Has received all necessary approvals for the USD3bn acquisition of RBL Bank.
• RAKUTN: 1Q26 EBITDA increased by 36% yoy due to broad-based segment growth.
• Adani Group: Is revisiting plans to raise USD1bn via USD-denominated bonds.
• SJM Holdings: Moody's downgraded the company by one notch to B1 from Ba3, citing high leverage.
• SoftBank: Launched USD40bn bridge facilities for follow-on investment in OpenAI, while Arm Holdings is under FTC investigation.
• Globe Telecom (Mynt): Aims for a USD8bn valuation in an IPO on the Philippine market.
• Vedanta Resources: Amended an agreement to increase the total loan commitment from USD350mn to USD600mn.

China Policy Insights

• Xi-Trump Summit: Marked the beginning of a stabilization window in Sino-US relations, with deliverables largely in line with market expectations.
• Stabilization Impact: The truce is tactical, driven by near-term constraints. It should reduce China risk premium, support Hong Kong and A-share re-rating, and provide room for RMB appreciation to 6.78 by year-end.
• Trade and Geopolitics:
  • A commercial agreement involving Boeing and GE Aerospace was reached, valued at US$17–25bn.
  • The U.S. and China agreed on a framework for the Bilateral Board of Trade and Board of Investment, promoting continuous cooperation.
  • Both sides emphasized the need for stabilization due to domestic and geopolitical pressures.
• Geopolitical Focus:
  • Shared concerns over Iran and the Strait of Hormuz.
  • Taiwan remains a structural redline for the U.S., but Trump's approach opens new negotiation possibilities.
• Technology and AI:
  • No structural relaxation in U.S. export controls.
  • China continues to prioritize domestic substitution over negotiated access, supporting the "new quality productive forces" agenda.

Macro News Recap

• Equity Markets: S&P (-1.24%), Dow (-1.07%), and Nasdaq (-1.54%) declined on last Friday.
• U.S. Treasury Yields: Increased across all maturities, with 2/5/10/30 year yields at 4.09%/4.26%/4.59%/5.12%.
• Onshore Primary Issuances: 57 credit bonds were issued last Friday with a total of RMB85bn, with a 4.1% yoy decrease in month-to-date issuance.

Summary of Key Points

• Bond Market Trends:
  • Asian IG and AT1s showed mixed performance with some widening and others tightening.
  • Rakuten's bond performance was positive, with a "buy" recommendation on the 8.125 Perp.
  • Chinese property and other bonds had mixed outcomes, with some leaking and others showing slight declines.
• China-U.S. Relations:
  • The summit signals a stabilization phase, though it is seen as tactical.
  • Stabilization reduces China risk premium and supports equity re-rating.
  • Geopolitical alignment on Iran and the Strait of Hormuz, while Taiwan remains a key redline.
• Technology and Trade:
  • U.S. export controls remain strict, with no major relaxation.
  • Partial re-coupling in low-risk trade is expected, with continued tightening in high-risk sectors.
• RMB Appreciation:
  • A gradual appreciation to 6.78 by year-end is anticipated based on the stabilization framework.
• Other Highlights:
  • No new offshore Asian bonds were priced.
  • Fosun International and Saudi Aramco have significant financing and asset divestment plans.
  • CMBI maintains a neutral stance on certain bonds and provides detailed analysis for investment decisions.

Important Disclosures

• The report contains general market commentary and is not tailored to individual investors.
• CMBI does not guarantee the accuracy or completeness of the information.
• The report is for informational purposes only and should not be construed as an offer or solicitation.
• There are potential conflicts of interest, as CMBI may have investment banking relationships with the issuers mentioned.

Contact Information

• Fixed Income Department:
  • Tel: 852 3657 6235 / 852 3900 0801
  • Email: fis@cmbi.com.hk
• Analysts:
  • Glenn Ko, CFA: (852) 3657 6235 | glennko@cmbi.com.hk
  • Cyrena Ng, CPA: (852) 3900 0801 | cyrenang@cmbi.com.hk
  • Yujing Zhang: (852) 3900 0830 | zhangyujing@cmbi.com.hk