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CREDIT MACRO: Asia Credit Spreads Off Recent Lows, Alibaba Looks To Primary

CREDIT MACRO
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  • Asian equities are mixed today. Japan's stocks fell as disappointing corporate earnings and caution ahead of the BoJ Governor's speech weighed on sentiment, alongside US Fed rate uncertainty. South Korea's Samsung surged on a surprise stock buyback, offsetting broader weakness in semiconductor stocks following concerns about Nvidia’s chip issues. Chinese and Hong Kong markets saw earlier losses however have seen traded higher, lingering concerns surrounding geopolitical tensions, deflation worries, and reduced optimism over Beijing's stimulus clouding sentiment have limited further upside so far though. In Australia, miners and gold stocks rose, supported by strong commodity prices, but banking sector losses capped gains.
  • Australia has been focus on some primary deals today, with RaboBank looking to price a 3.5yr at +80bps area, Scentre is looking to do a 5yr fixed and/or floating rate and 10yr fixed rate AUD senior unsecured bond. There isn't much to mention in secondary today, little in the way of headlines or data, similar themes remain. Better buying in recent new issue deals, with the CBA T2 from last week now trading -4bps from issue, while the QBE T2 is -8bps, the weakness in season Tier 2 lines heading into the CBA deal last week have been erased and bonds now trade -1bps, there has been better two-way in corps, levels unchanged, while AT1s are +0.125.
  • Asia saw just the one deal today, with State Bank of India looking to print a 5y at +115bps area, while Alibaba has mandated banks for investor calls for its proposed USD-denominated senior unsecured fixed rate notes offering, it has tenors of 5.5, 10.5 and 30 years. Yields on the Alibaba USD bonds widen 3-5bps following the announcement and have underperformed peers, while Adani announced a potential 20yr bond, however the company has struggled recently in primary. Spreads on Asia IG bodns were 1bps higher Friday night, and we are a touch weaker again today, although trading has been relatively light on, HY is underperforming a touch as some accounts look to book profit on property bonds.
  • Aus iTraxx CDS is +0.5bps at 66.5bps & Asia Ex-JP iTraxx is also +1bps at 74bps
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  • Asian equities are mixed today. Japan's stocks fell as disappointing corporate earnings and caution ahead of the BoJ Governor's speech weighed on sentiment, alongside US Fed rate uncertainty. South Korea's Samsung surged on a surprise stock buyback, offsetting broader weakness in semiconductor stocks following concerns about Nvidia’s chip issues. Chinese and Hong Kong markets saw earlier losses however have seen traded higher, lingering concerns surrounding geopolitical tensions, deflation worries, and reduced optimism over Beijing's stimulus clouding sentiment have limited further upside so far though. In Australia, miners and gold stocks rose, supported by strong commodity prices, but banking sector losses capped gains.
  • Australia has been focus on some primary deals today, with RaboBank looking to price a 3.5yr at +80bps area, Scentre is looking to do a 5yr fixed and/or floating rate and 10yr fixed rate AUD senior unsecured bond. There isn't much to mention in secondary today, little in the way of headlines or data, similar themes remain. Better buying in recent new issue deals, with the CBA T2 from last week now trading -4bps from issue, while the QBE T2 is -8bps, the weakness in season Tier 2 lines heading into the CBA deal last week have been erased and bonds now trade -1bps, there has been better two-way in corps, levels unchanged, while AT1s are +0.125.
  • Asia saw just the one deal today, with State Bank of India looking to print a 5y at +115bps area, while Alibaba has mandated banks for investor calls for its proposed USD-denominated senior unsecured fixed rate notes offering, it has tenors of 5.5, 10.5 and 30 years. Yields on the Alibaba USD bonds widen 3-5bps following the announcement and have underperformed peers, while Adani announced a potential 20yr bond, however the company has struggled recently in primary. Spreads on Asia IG bodns were 1bps higher Friday night, and we are a touch weaker again today, although trading has been relatively light on, HY is underperforming a touch as some accounts look to book profit on property bonds.
  • Aus iTraxx CDS is +0.5bps at 66.5bps & Asia Ex-JP iTraxx is also +1bps at 74bps