20230306-招银国际-Fixed_Income_Daily_Market_Update_6页_837kb

CMBI Credit Commentary Summary

Core Content Overview

This document is a Fixed Income Daily Market Update from CMBI, providing insights into the performance of various fixed income instruments and macroeconomic developments in the Asia-Pacific region, particularly focusing on China and other markets. It includes market movements, new issues, policy updates, and analyst comments, offering a comprehensive view of the fixed income landscape.

Market Performance

• Asia IG space: Slightly tightened by 1-2bps, with buying flow mainly on 24-26s bonds.
• Recent New Issues:
  • AT1 HSBC and CTIH: Up by c0.25pt.
  • LGFV: Short-end names under better selling, while long-end names showed mixed performance.
  • Perps (Perpetuals): Mixed performance, with some like HSBC 8 Perp recovering 0.5pt to 101, and others like LEEMAN/NWDEVL/REGH marked down by 0.5-1pt.
  • China SOEs: HAOHUA/SINOPE tightened by 3-7bps.
  • China HY: Relatively firm, with COGARDs edged up 0.5pt and CHINSCs traded 0.5-1.5pts higher.
• Top Performers:
  • LMRTSP 7 1/4 06/19/24: +2.1pt
  • JD 4 1/8 01/14/50: +2.1pt
  • ROADKG 7 3/4 PERP: +1.9pt
  • SINOPE 4 7/8 05/17/42: +1.8pt
  • CNOOC 5 05/02/42: +1.7pt
• Top Underperformers:
  • ZENENT 12 1/2 04/23/24: -6.6pt
  • ZENENT 12 1/2 09/13/23: -6.6pt
  • XINHUZ 11 06/06/25: -6.1pt
  • XINHUZ 11 09/28/24: -3.7pt
  • FIRPAC 4 3/8 09/11/27: -1.3pt

China Policy Outlook

• GDP Growth Target: Set at 5% for 2023, which may disappoint the market due to its conservative nature. However, the target was decided in mid-December and reflects a bottom-line thinking approach.
• CMBI Forecast: Maintains the 2023 GDP growth forecast at 5.4%, suggesting more flexibility than initially expected.
• Fiscal Policy:
  • Proactive fiscal policy is weaker than anticipated, with a broad deficit ratio slightly below forecast.
  • Tax cuts and subsidies will target manufacturing, SMEs, and specific sectors, but the total amount will be lower than in 2022.
  • Fiscal expenditure is planned to increase by 5.6%, focusing on technology innovation, rural revitalization, regional development, education, social welfare, and green development.
• Monetary Policy:
  • Expected to remain accommodative, with easing credit supply to manufacturing, SMEs, and technology companies.
  • Central Bank may consider RRR and LPR cuts in H2 2023 if recovery slows or global recession risks rise.
• Property Policy:
  • Conservative, with emphasis on housing for living, not speculation.
  • Measures to strengthen balance sheets and prevent disorderly expansion of developers.
  • Increased supply of social housing to address youth housing issues.

Key New Issues and Market Activity

• LPKRIJ: Another tender of USD50mn for 2025 and 2026 bonds. Offer prices are 87 and 77, respectively. The tender will expire on 13 Mar 2023.
• Offshore Asia New Issues: No new issues priced today.
• Pipeline: Commonwealth Bank of Australia has a USD3/3yr bond with a pricing of T+95/FRN SOFR and a rating of Aa3/AA-/A+.

Macro News Highlights

• U.S. Markets: Strong performance with S&P (+1.61%), Dow (+1.17%), and Nasdaq (+1.97%) up.
• U.S. PMI: Increased to 50.6 from 46.8 in Jan'23.
• China Caixin PMI: Rose to 55.0 from 52.9 in Jan'23.
• U.S. Treasury Yields: Overall declined, with 2/5/10/30 yields at 4.86%/4.26%/3.97%/3.90%, respectively.
• China Employment Target: Increased from 11 million to 12 million, highlighting the importance of employment stability for consumer confidence.

News and Market Color

• Onshore Primary Issuances: 65 credit bonds issued last Friday, totaling RMB67bn, with 260 credit bonds issued month-to-date, raising RMB233bn (12.4% yoy increase).
• Adani Group: USD2bn in foreign currency bonds due for repayment next year.
• CIFIHG: Remitted RMB111.2mn for two March domestic-bond coupons.
• China South City: Expected to close a RMB3bn three-year syndicated loan before June.
• Fosun: In preliminary talks to sell Thomas Cook.
• JD.com: Launched a RMB10bn (cUSD1.45bn) subsidy campaign.
• Lai Sun Development: Executing corporate guarantee for HKD668mn term loan facilities.
• Yuexiu Property: Signed HKD450mn three-year term loan facility agreement.

Important Disclosures

• CMBIGM has investment banking relationships with some issuers in the preceding 12 months.
• The report is for informational purposes only and not an offer to buy or sell securities.
• CMBIGM does not provide tailored investment advice and encourages consultation with financial advisors.
• The report is subject to change and may include different assumptions and viewpoints.

Disclaimer

• The report is distributed in accordance with legal requirements for different jurisdictions (UK, US, Singapore).
• In the UK, the report is only for Article 19(5) and Article 49(2)(a)-(d) persons.
• In the US, it is intended for major institutional investors only.
• In Singapore, CMBISG distributes the report and accepts legal responsibility only to the extent required by law.

Note: This summary is based on the provided document and does not include any additional information or analysis.