20230905-招银国际-Fixed_Income_Daily_Market_Update_6页_1mb

Summary of Fixed Income Credit Commentary - 5 Sep 2023

Market Overview

The fixed income market was quiet on 5 Sep 2023, with subdued performances in various sectors. Key areas included the property sector, bond issuances, and trading activity, influenced by macroeconomic news and specific company developments.

Property Sector

• Market calm followed yesterday's rally.
• COGARD paid its August 2023 coupon within the grace period; otherwise unchanged in bonds.
• Media reported Zhuhai Wanda's IPO pricing roadshow in Hong Kong; Dalian Wanda expected interest payments and mixed market performance.
• Property indices boosted by China's supportive policies for the real estate sector, with notable jumps in TMT/SOE and Macau gaming bonds.

Key Company/Entity Updates

• Greenland Global REIT Fund: Issued consent solicitation to extend maturities by 4 years for approximately $3bn bonds, seeking to defer payments and increase interest, due to failing to pay interests or redemptions previously. Outcomes hinge on creditor acceptance.
• Asia ex-JP USD Bonds: Gross issuance reached $98.5bn in August 2023, a 26.8% year-over-year decline from $134.6bn in August 2022, with gains in contribution from countries like China, Philippines, and India. IG segment dominates, but LGFV bonds saw increased demand due to offshore financing shifts.
• Other Developments: New issues pipeline includes bonds from major entities; Philippine and Indian bonds mixed, while Chinese stocks support real estate sentiment. CARINC ratings affirmed with positive outlook due to credit management.

Trading Desk Insights

• Chinese TMT/SOE bonds tightened 2-5bps; high-beta TMTs and financials showed stronger buying, with AMCs trading higher amid RMB funding.
• Notable price changes: YLLGSP51/80 and PINGRE3450 jumped significantly, while underperformers like ICMPPIJ33 and LGFV bonds faced declines.
• Macau and Indian spaces muted, but Chinese property and TMT sectors gained traction, supported by sentiment boosts and yields.

Macro News Recap

• China Caixin service PMI at 51.8, down from 54.7 and below expectations, reflecting cooling services; crude oil prices rose to highs not seen since November 2022 if OPEC+ extends supply cuts.
• US stock markets closed, treasury yields unchanged; global fixed income tightened in indices like GRWALL and HRINTH.

Analyst Commentary Highlights

• Focus on LGFV bonds for robust offshore demand due to favorable rates outlook, despite valuations seeming rich relative to USD funding.
• Asia ex-JP bond market shows narrowing yield widening, linking to PBOC's Free Trade Zone bond rules.