FW: RHB FIC Credit Markets Weekly - 11/9/17

 

 

11 September 2017

 

 

Credit Markets Weekly

 

MYR sees annual high; MYR Bond Trading Sees Resurgence

SUMMARY:

¨      MYR Credit Market: Primaries saw spike to MYR5.6bn. Lembaga Pembiayaan Perumahan Sektor Awam (LPPSA) printed MYR3.5bn bonds across 5 tranches with maturities ranging between 3-30y. Danga Capital (AAA) issued MYR1.5bn sukuk and Telekom Malaysia (AAA) printed MYR500m 10y sukuk.

¨       Corporate News – Heavy govvie and corporate trading saw trades totalling MYR24bn and MYR2.7bn respectively. The MGS extends its rally for the second straight week, tracking global govt bond yields, further supported by the strong July export and FX reserve print. RAM downgraded Bahrain Mumtalakat Holding Company (Mumtalakat) to A3/Sta from A1/Neg following the downgrade of Bahrain's sovereign rating.

¨      APAC USD Credit Market: N Korea starts the week with hydrogen bomb threatens now with ICBM. The markets more upbeat after the US President Trump reached an agreement with the Democrats in the Senate to attach a short-term extension to the debt ceiling and government funding measures for another three months. The US Treasuries have continued to push downwards, however, as the market begins to price in the effects of a hurricane in Texas and brace for the effects of another hurricane in Florida this week while uncertainty on the Fed increases following the surprised announced exit of Fed Vice Chair Fischer.

¨       Rating Actions – Moody's downgraded the rating of Bank of Communications Co Ltd (BoCom) to A3/Sta from A2 after a review for downgrade. Moody's upgrades Honghua Group Ltd to B3/Neg from Caa1/Neg. S&P upgrades Anhui Conch Cement to A/Sta from A-/Sta. Moody's upgrades Mirvac Group Finance Ltd to A3/Sta from Baa1/Sta.

 

Table 1: Index Weekly Movements

Indices	08-Sep	1-Sep	Weekly Chg (bps)
iTraxx AxJ 5y IG	78.7	74.9	4
AxJ IG Spread (bps)	176.2	173.0	3
AxJ HY (%)	6.53	6.59	-6
SOR 2y (%)	1.22	1.32	-10
SOR 5y (%)	1.61	1.74	-14
Malaysia 5y CDS	70.5	69.6	1
MGS 3y (%)	3.04	3.36	-32
MGS 5y (%)	3.47	3.57	-10
MGS 7y (%)	3.77	3.85	-9
MGS 10y (%)	3.85	3.89	-4
AAA 5y Spread* (bps)	78	55	24
AAA 10y Spread* (bps)	80	75	5
AA 5y Spread* (bps)	115	108	7
AA 10y Spread* (bps)	116	112	4

Source: Bloomberg, BNM, RHBFIC        *MYR-denominated bonds

 

 

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