CIMB Daily Fixed Income Commentary - 13 February 2015

Good Morning,

Market Roundup

• US Treasury recovered marginally, after the January retail sales figure appeared to be weaker than market expectation. The January number contracted by a larger margin of 0.8%, against 0.4% contraction of consensus expectation.
• Malaysian government bonds were seen with improved buying interest post positive economic data release on Thursday. However, sentiment remained weak on the back of overnight plunge in crude oil prices, while USD/MYR moved higher above 3.6040, from 3.5990 recorded a day ago.
• Thai govvies extended losses, with foreign players net sold Bt1.3 billion, amid weakening THB on Thursday. USD/THB headed higher and surpassed 32.72, before eventually settled lower at 32.69. On the other hand, Thai IRS curve was held unchanged, after the significant upward movement a day before.
• IDR government bond market continued the sell off following the USD/IDR downward movement in by 0.7% today. Panic selling was seen across the curve in early hours. We noted buying support from local names on regular volume, while sellers were mainly local bank and foreign names. Transaction volume was average amounting IDR 14.1 trillion. The most traded bonds were the benchmark FR69 (maturing in 2019) and FR68 (maturing in 2034).
• Kaisa bonds were again in the limelight in Asian credit market, after the company stated that it is currently reviewing its repayment terms, and may make “material modifications” onto them. Kaisa Jan’20 dipped 5.15pts to 64.19pts and Kaisa Mar’18 weakened from 69.36pts to 63.96pts after the surprise move from the company. Also, we saw some property name dealt wider on Thursday. Agile perp traded 0.21pt lower at 75.78pts, while Cifi Jan’19 inched lower from 100.08pts to 100.03pts.