FW: RHB FIC Credit Markets Weekly - 4/12/17

 

 

4 December 2017

Credit Markets Weekly

MYR Gains Further, Below 4.10/USD; Focus on US Tax Reform Plans

SUMMARY:

¨      MYR Credit Market: Focus was on the newly reopened 5y GII 04/22 which saw BTC moderated to 1.72x with tender average yield of 3.872%; The 3y-10y MGS ended the week mixed amid the thin trading volume from shorter trading week; The MYR continued its upward momentum against the greenback for the 5^th straight week to reach a fresh year-high at 4.0910/USD, strengthening to trade below the 4.10/USD level; Quiet trading activities in the govvies space with weekly volume of MYR7.9bn partly due to shorter trading week, marginally below the 3-month weekly average of MYR12.6bn; In the credit trading space, trading activities remained weak as volume increased to just over MYR1.5bn.

¨      Corporate News – RAM has reaffirmed the AAA/Sta ratings of Poh Kong Holdings Berhad (Poh Kong) for its MYR150m Danajamin-Guaranteed ICP/MTN Programme (2011/2018); RAM has also reaffirmed AA2/Sta rating on Hong Leong Assurance Berhad (HLA) in addition to the AA3/Sta for its MYR500m Subordinated Notes Programme (2013/2025).

¨      APAC USD Credit Market: US tax reform bill one more step closer to being passed.

¨      Rating Actions - Moody's upgrades GPT Group to A2/Sta from A3/Sta; S&P upgrades China National Offshore Oil Corp (CNOOC), CNOOC Ltd and CNOOC Finance Corp Ltd to A+/Sta from A/Sta; Fitch reaffirms AquaSure Finance Pty Ltd at A-/Sta Moody's revised the outlook on Yuzhou Properties Co Ltd to Ba3/Sta from B1; S&P assigns BBB/Sta to Qingdao Conson Development (Group) Co Ltd.; Fitch assigns BBB/Sta to Xiamen Xiangyu Group Corp.; S&P removed China Life Insurance Co Ltd from rating watch negative while maintaining it at A+/Neg; S&P removed China Life Insurance Co Ltd from rating watch negative while maintaining it at A+/Neg; Fitch also removed the rating watch negative on Baidu Inc affirming it at A/Sta. Fitch assigned A-/Sta to Dong Yin Development (Holdings) Limited; Moody's assigns Baa2/Sta to China CITIC Bank Corporation Limited

Table 1: Index Weekly Movements

Indices	01-Dec	24-Nov	Weekly Chg (bps)
iTraxx AxJ 5y IG	73.4	75.9	-3
AxJ IG Spread (bps)	162.9	161.3	2
AxJ HY (%)	6.71	6.71	0
SOR 2y (%)	1.50	1.44	6
SOR 5y (%)	1.87	1.83	4
Malaysia 5y CDS	62.8	65.6	-3
MGS 3y (%)	3.40	3.37	3
MGS 5y (%)	3.60	3.61	-1
MGS 7y (%)	3.91	3.87	3
MGS 10y (%)	3.89	3.91	-2
AAA 5y Spread* (bps)	73	73	-1
AAA 10y Spread* (bps)	81	76	5
AA 5y Spread* (bps)	104	104	0
AA 10y Spread* (bps)	115	111	4

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

 

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