FW: RHB FIC Credit Markets Weekly - 20/11/17

 

 

20 November 2017

Credit Markets Weekly

Malaysia's 3Q17 GDP Accelerates to 6.2%, India's Sovereign Rating Upgraded

SUMMARY:

¨      MYR Credit Market: Malaysia's 3Q17 GDP growth delivered a strong 6.2% yoy gain beating consensus of 5.7%. Benchmarks 7y-10y MGS saw yields tightening across the curve by -2bps and -8bps to converge at 3.98%; The MYR gained further +0.73% against the greenback WoW to end at 4.1610/USD from renewed catalyst following upbeat 3Q17 GDP release. Trading volume in the govvies space picked up to MYR12.5b, slightly above the 3-month weekly average of MYR12.3bn; In the credit trading space, trading activities remained lackluster as volume increased to just under MYR1.9bn.

Corporate News – RAM downgraded the ratings of three media players; Star Media Group Bhd to AA2/Neg from AA1/Neg; Media Prima Berhad to AA3/Neg from AA1/Neg; and Media Chinese International Limited to AA1/Neg from AA2/Neg. The downgrade reflects the deteriorating operating performances due to declining advertising expenditure (adex) and the on-going structural changes as the industry shifts towards digital platform.

¨      APAC USD Credit Market: Markets continued to oscillate on tax reform, while the flattening of the USTs continues.

Rating Actions - Moody's upgraded CK Hutchison Holdings Ltd to A2/Sta from A3/Sta; Moody's upgraded the ratings of Export-Import Bank of India (EXIM India), HDFC Bank Limited (HDFC Bank), Indian Railway Finance Corporation Limited (IRFC), and State Bank of India (SBI) to Baa2/Sta from Baa3/Pos; Moody's raised the ratings of NTPC Limited (NPC), NHPC Limited (NHPC), National Highway Authority of India (NHAI) and Gail (India) Limited (GAIL) from Baa3/Pos to Baa2/Sta; Moody's upgraded the rating of Bharat Petroleum Corporation Ltd (BPCL), Hindustan Petroleum Corporation Ltd (HPCL), Indian Oil Corporation Ltd (IOCL), and Petronet LNG Investment (PLL) to Baa2/Pos from Baa3/Sta; Moody's also upgraded Oil and Natural Gas Corporation Ltd (ONGC) to Baa1/Sta from Baa2/Pos; S&P revised its outlook on Challenger Life to A/Pos from A/Sta; S&P revised its outlook on Anton Oilfield Services Group to Caa1 on review for upgrade; Moody's upgraded the outlook on China National Gold Group (CNG) to Baa3/Sta from Baa3/Neg; Moody's upgrades the outlook on Binhai Investment Co Ltd to Baa1/Sta from Baa1/Neg; S&P revises its outlook on China Pacific Property Insurance Co Ltd (CPPIC) to A/Neg from A/Sta; S&P revises its outlook on China Pacific Insurance Co (HK) Ltd (CPICHK) to A/Neg from A/Sta; Moody's has put the rating of the subordinated Tier-2 point of non-viability (Tier-2 PONV) securities of DBS Bank Ltd, DBS Group Holdings Ltd, Overseas-Chinese Banking Corp Ltd and United Overseas Bank Limited on review for upgrade; Moody's downgraded the outlook on Yuexiu Real Estate Investment Trust (Yuexiu REIT) and Yuexiu REIT MTN Co Ltd to Baa3/Neg from Baa3/Sta; S&P revised to BB+/Pos the outlook on PT Bank Rakyat Indonesia (Persero) Tbk (BRI) from BB+/Sta.

 

 

 

Table 1: Index Weekly Movements

Indices	03-Nov	27-Oct	Weekly Chg (bps)
iTraxx AxJ 5y IG	79.6	79.9	0
AxJ IG Spread (bps)	161.4	162.9	-2
AxJ HY (%)	6.73	6.70	3
SOR 2y (%)	1.46	1.45	1
SOR 5y (%)	1.88	1.87	1
Malaysia 5y CDS	69.1	68.7	0
MGS 3y (%)	3.54	3.49	5
MGS 5y (%)	3.76	3.76	0
MGS 7y (%)	3.98	4.01	-2
MGS 10y (%)	3.98	4.06	-8
AAA 5y Spread* (bps)	59	54	5
AAA 10y Spread* (bps)	73	59	15
AA 5y Spread* (bps)	93	86	6
AA 10y Spread* (bps)	110	95	15

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

 

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