Tuesday, April 5, 2016

RHB FIC Credit Markets Monthly Review - 5/4/16

5 April 2016


Credit Market Monthly Review
March 2016

Bonds Rallied as Global Central Banks Extend Liquidity     

Market Review
¨   USD: Benchmark Treasury yield curve steepened. Asian bonds were supported from positive inflows as Asian CDS, IG spreads and average yields of junk bonds narrowed.
¨   SGD: High grade papers in demand as SOR benchmark declines. Further consent solicitations by O&G and orderbook cancellation.
¨   MYR: Local bonds rallied on technical demand.

Supply and Demand Trends
¨   USD: Primaries picked up from slower Feb with USD17.0bn deals priced in March.
¨   SGD: Stronger March primaries with a healthy SGD2.43bn printed.
¨   MYR: Perps led March issuances.

Rating Trends
¨   More downgrades with 31 slashed compared to 9 upgrades; upgrade/downgrade ratio of 0.29x in March vs. YTD’s 0.20x; major national oil companies sparred from downgrade but CNOOC’s BCA slashed to baa1.
¨   Moody’s negative outlook for the Singaporean banks.

Outlook
¨   US rate hike uncertainty to drive volatility.

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