5 March 2018
Credit Markets Weekly
10y MGS 11/27 Reopening 2.07x; Focus on BNM MPC Meeting This Week.
SUMMARY:
¨ MYR Credit Market: MGS and MYR continue to strengthen despite global shifts; Govvie weekly trade volume surged upwards to just under MYR21bn (MYR9.0bn the previous week), above the 3-month average of MYR11.3bn; Corporate/bond sukuk secondary trades fell to MYR1.9bn from MYR2.0bn the week before; The primary market saw a mere trades recorded over the week.
¨ Corporate News - MARC has affirmed the corporate credit ratings on Tenaga Nasional Berhad (TNB) at AAA/Sta
¨ APAC USD Credit Market: US Treasuries ended mixed where concentration of the market largely skewed towards the 2-day Humphrey-Hawkins led by newly sworn Fed Chair Jerome Powell along with a series of inflation readings throughout the week. Meanwhile, trade policy continued to be the subject of heightened scrutiny after Trump administration announced plans to impose tariffs on imported steel and aluminum
¨ Rating Actions - Fitch has upgraded Tenaga Nasional Berhad from BBB+/Pos to A-/Sta; Fitch has upgraded Shanghai Construction Group Co. Ltd. from BBB/Pos to BBB+/Sta; Fitch has upgraded COFCO (Hong Kong) Limited from A-/Pos to A/Sta; Moody’s has upgraded China Resources Gas Group Limited from Baa1/Pos to A3/Sta; Moody’s has changed the outlook on IDBI Bank Ltd. upward from B1/Sta to B1/Pos; Moody’s has also revised the outlook on John Deere Ltd/Australia (Deere) upward from A2/Neg to A2/Sta; S&P has revised upward the outlook on Health and Happiness International Holdings Ltd. from BB/Sta to BB/Pos; S&P revised up the outlook on IFC Development Ltd. from A/Sta to A/Pos; Fitch has downgraded Korea District Heating Corp. from A+/Neg to A/Sta; Fitch has also downgraded Greenland Holding Group Company Limited from BB/Neg to BB-/Neg; Fitch has downgraded China General Nuclear Power Corporation’s from A+/Neg to A/Sta; S&P has downgraded Glenmark Pharmaceuticals Ltd. from BB/Sta to BB-/Sta; Fitch revised upwards the outlook on JSW Steel Limited from BB/Neg to BB/Sta; Moody’s assigns first time B2/Sta rating to Zhejiang Hengyi.
Table 1: Index Weekly Movements
Indices | 2-Mar | 23-Feb | Weekly Chg (bps) |
iTraxx AxJ 5y IG | 69.4 | 70.3 | -1 |
SOR 2y (%) | 1.77 | 1.78 | -1 |
SOR 5y (%) | 2.14 | 2.22 | -8 |
Malaysia 5y CDS | 62.7 | 63.3 | -1 |
MGS 3y (%) | 3.40 | 3.38 | 2 |
MGS 5y (%) | 3.59 | 3.60 | -1 |
MGS 7y (%) | 3.90 | 4.00 | -11 |
MGS 10y (%) | 4.00 | 4.08 | -8 |
AAA 5y Spread* (bps) | 79 | 76 | 3 |
AAA 10y Spread* (bps) | 75 | 67 | 8 |
AA 5y Spread* (bps) | 109 | 107 | 2 |
AA 10y Spread* (bps) | 108 | 100 | 7 |
Source: Bloomberg, BNM, RHBFIC *MYR-denominated bonds
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