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APAC Credit Spreads Grind Tighter, Asia Primary Picks Up

CREDIT UPDATE
  • Asian equities fell today, driven by weakness in major tech stocks ahead of Nvidia's earnings report, with concerns over artificial intelligence demand and disappointing results from Chinese e-commerce firm PDD weighing on sentiment. The MSCI Asia Pacific Index declined, led by losses in Hong Kong, mainland China, Taiwan, and South Korea. Meanwhile, the growing chances of an upcoming US rate cuts and a weaker dollar provided some support, especially for Japanese equities, which benefited from a firmer yen with small-cap stocks performing the best. Overall, markets are in consolidation mode after recent gains, with attention focused on upcoming corporate earnings and central bank actions.
  • It has been a slow start to Aus credit market this week, markets are largely flat. Investors have been topping up on some of the recently issued deals although again there has been little change in spreads, while outright yield buyers have been taking advantage of the move in wider in govies with better buying seen through short-end snr bank paper (-1bp)
  • New deals: Corps - Mirvac ASW+145bps (priced +150), Transurban ASW+164 (priced +170), ORIX ASW+129 (priced +140bps), BP Capital 5yr ASW+111 (priced +115bps) 10yr ASW+146 (priced 153bps). Fins - Lloyds frn +217, fxd +214 (priced +218), Mqgau frn +186, fxd +188 (priced ASW+185), Bnp frn +214, fxd +214 (priced +215)
  • Asia IG spreads are 1-2bps tighter today. Auto/parts -1bps, Fins -1bps, Industrials -1/-2bps, O&G -1/-2bps, Metals & Mining -2bps, Energy -1bps, while Tech was the worst performing trading +1bps (following poor results from PDD, with Nvidia's earnings weighing on market as well). In the HY space, Real estate is a touch higher after dropping 1-5pts late last week, however there doesn't seem to be much in the of any major new headlines.
  • In the SOE/Quasi space, Indonesian quasis continue to see an uptick in demand and grind tighter, with longer dated lines trading at an average spread of 175bps vs the Asia-ex Japan average spread of 114bps, Malaysian quasis are also benefitting from the move tighter. South Korea SOE's have struggled today with yields on government debt rising 4-9bps.
  • Aus iTraxx CDS is 1bp lower at 61bps & while Asia Ex-J iTraxx is 1bp lower to 92.5bps
  • Headlines: Hong Kong Builder Far East Seeks Consent to Change Bond Terms
  • Primary: Cathaylife Singapore USD 15NC10 Tier 2, Jera USD 5Y Senior Unsecured, Far East Horizon USD Senior Unsecured Notes, Ganzhou Urban Investment USD 3Y 6.6% area, BOC Aviation USD 7Y S +140 area, San Miguel Global Power USD Perp, Exchange Offer
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