4 August 2016
Credit Market Monthly Review
Asian Bonds Extend Gains in July; Swiber Led Rout in O&G Sector; Falling Yields Encouraged Primary Issuances
¨ USD: Long-term Treasuries yields remained at all-time low. Upbeat Asian credit markets.
¨ SGD: Swiber drives sell-off in O&G space; O&G companies pursue corporate action to stay afloat. REITs generally saw weaker performance.
¨ MYR: Another month of strong performance for MYR bonds spurred by earlier-than-expected OPR cut. Corporate and quasi-government bond/sukuk spiked 0.95-0.96% over the same period.
Demand and Supply Trends
¨ USD: Strong primary market supply. APAC new bond issuances surged 104% higher MoM to USD28.6bn (Jumped 60% YoY) in July against USD14.0bn observed in June.
¨ SGD: July monthly issuances lowest YTD.
¨ MYR: Robust MYR14.9b issuance in July, YTD issuance boosted to MYR54.2bn.
¨ More downgrades in July, mostly related to Fitch’s methodology change; average upgrade/downgrade ratio of 0.25x in July against 0.30x in June.
¨ Indian banking sector was placed on negative outlook from stable by Fitch.
¨ Moody’s anticipates mix set of 2Q16 results from Asian oil & gas players.
¨ Fitch downgraded Malaysia’s LCLT IDR to A-/Sta, from A/Sta.
¨ EMs’ bonds remain attractive amid global easing.