FW: RHB FIC Credit Markets Weekly - 6/11/17

 

 

6 November 2017

 

Credit Markets Weekly

Fed Chair Nominee Named, Tax Cuts and Jobs Act Revealed

SUMMARY:

       MYR Credit Market: Fitch shares concerns over Malaysia's revenue projections and growth projections; MGS curve saw a strong bull flattening; The MYR rebound after two consecutive weeks of declines, advancing to 4.2365/USD; MYR primaries return, growing to MYR6.1bn from MYR2.3bn in the earlier week; Govvies trading was below the 3 month weekly average of MYR12.7bn, volume was at MYR11bn; Subdued corporate activities with a volume of just MYR1.8bn.

Corporate News – Moody's downgraded Sime Darby Berhad to Baa3 from Baa1 following its review; rating outlook is stable; RAM Ratings upgraded Hong Leong Bank Berhad to AAA from AA1; RAM Ratings also assigned Hong Leong Financial Group (HLFG) with an AA1/Sta.

¨      APAC USD Credit Market: UST climbed steadily; Powell likely to be named as new Fed Chair. Chinese and Singaporean FIs widening CDS. New bond supply remains heavy; total bond issuances were slightly over USD9bn.

Rating Actions – Moody's upgrades the outlook on Emeco Pty Ltd to Caa1/Pos from Caa1/Sta; S&P has downgraded China Merchants Port Holdings Co Ltd ratings from BBB+ to BBB; outlook is stable; S&P downgrades Shanxi Road & Bridge Construction Group Co Ltd (SXRB) to BB-/Sta from BB/Sta; MNC Investama Tbk rating lowered to CCC from CCC+ by S&P; outlook is negative; Fitch resolved its rating watch negative on Sunac China Holdings Ltd placing it on BB-/Neg; Moody's lifts its outlook on SK E&S Co Ltd to Baa2/Sta from Baa2/Neg; S&P revises the outlook of Onsite Rental Group Operations Pty Ltd to B-/Sta from B-/Neg; S&P lifts Agricultural Bank of China Ltd (ABC) from credit watch negative affirming it at A/Sta.

Table 1: Index Weekly Movements

Indices	03-Nov	27-Oct	Weekly Chg (bps)
iTraxx AxJ 5y IG	74.4	74.9	-1
AxJ IG Spread (bps)	159.4	156.1	3
AxJ HY (%)	6.62	6.62	0
SOR 2y (%)	1.45	1.50	-5
SOR 5y (%)	1.89	1.98	-9
Malaysia 5y CDS	63.1	62.5	1
MGS 3y (%)	3.49	3.50	-1
MGS 5y (%)	3.71	3.76	-5
MGS 7y (%)	3.97	4.03	-6
MGS 10y (%)	3.96	4.05	-9
AAA 5y Spread* (bps)	62	55	6
AAA 10y Spread* (bps)	67	60	7
AA 5y Spread* (bps)	93	89	5
AA 10y Spread* (bps)	101	101	1

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

 

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