October 17, 2024 05:52 GMT
CREDIT UPDATE: Asia Credit Spreads Tighten, China Housing Stimulus Disappoints
CREDIT UPDATE
- Asian equities saw mixed results today, with initial gains fading after Chinese stocks retreated on disappointment over a government press briefing on the property market. The MSCI Asia Pacific Index, which had risen as much as 0.7%, nearly erased all gains. Chinese officials announced an expansion of support for "white list" projects to 4t yuan ($562 billion), but investors were left unimpressed, signaling a high bar for further stimulus expectations. Elsewhere, stock benchmarks fell in Japan and South Korea, while Australian markets saw gains following stronger-than-expected employment data. Investors will now turn their attention to TSMC's earnings, with forward guidance closing watching following ASML's disappointing guidance earlier in the week.
- Slower day in Aussie credit, with just BENAU printing a dual tranche 4yr snr at ASW+96bps, while EnBW International announced a 5 to 10yr AUD green bond. In the secondary space, similar themes continue with strong demand again for T2, fixed over floating with investors targeting the higher yielding names, which is evidenced by the very strong demand for Judo Banks 10NC5 the other day. Recently issued bonds are all trading tighter, OCINCC (Blue Owl) +268bps (priced +270bps), SHINCA +128.5bps (priced +130bps), JUDOCA +305bps (priced +335bps).
- Asia has seen at least two primary deals today, with both Ningbo Haishu and Wuhan Metro Group are looking to price 3yr USD deals. Asia IG credit spreads tightening 1bps and now trade at the narrowest levels in about 4 months. Asia HY also moves tighter and now trades just 4bps off all time lows, with property bonds helping the index following further stimulus measures, focused at helping the trouble developers, although equities didn't react positive to these measures.
- Aus iTraxx CDS is +0.5bp at 65.5bps & Asia Ex-JP iTraxx is little changed at 72bps
- Headlines: China’s $562 Billion Loan Push for Unfinished Homes Disappoints, Country Garden Proposes Early Repayment of Yuan Bonds Due Dec.
- Asia Primary: Ningbo Haishu Development $TBD 3Y 5.3% Area, Wuhan Metro Group Co Ltd $Bmrk 3Y +118a
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