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Asia Bond Blurb

Updated: Apr 1, 2022

  • China HY property low beta names tumbled 3pts yesterday, high beta names such as Kaisa were anywhere from 4pts to 8pts lower following Fantasia's fall from grace.


China HY property low beta names tumbled 3pts yesterday, high beta names such as Kaisa were anywhere from 4pts to 8pts lower following Fantasia's fall from grace. The maturing bond was trading around 99.00 on Monday as Fantasia was said to have $200mn of cash in offshore accounts at the end of August. The developer informed Fitch that $102mn of it was used to repay a previously undisclosed private bond on 28/9, a bond that did not appear in its financial statements. Following so soon after Evergrande's mysterious Jumbo Fortune Enterprise guarantee, investors were spooked, feeling that private corporate balance sheets and communications are not to be trusted. The bonds have bounced slightly and are priced around $30.00. Although distressed players are starting to do their analysis they haven't got involved in a meaningful way as yet.

China IG was wider by SBPS wider, although the front end caught a safe harbour bid. HK IG property had some support from private banks, who bought the dip. Huarong backed off 50c on some profit taking after the recent rally. India was marked down in tandem although client interest was mixed. Today India IG is claiming that weakness back, tightening 5-7 bps on Moody's revising India's outlook to stable.

European natural gas and power prices extended their record-breaking rallies, crude oil futures jumped to 7-year highs. Gas stockpiles are at their lowest seasonal level in more than a decade, with domestic production lagging behind demand while supplies from top seller Russia remained limited as global competition for LNG continues to intensify. President Lagarde tried to reassure the market overnight about the inflationary pressures caused by both supply shortages and energy. She will pay close attention to wage inflation, expecting them to be in line with ECB 2% target. ECB Villeroy tried to attribute the higher energy prices to the stronger recovery whilst hawkish ECB Holzmann continued to call for the ending of PEPP next year. Over the water inflation expectations embedded in US TIPS breakeven rose to 2.81% testing their peak set in May which hit 13-year highs.

The EM primary market is expecting UAE to launch a US$3bn multi-tranched deal today comprising of 10-year, 20-year and a 40-year dual-listed Formosa. A slew of others is in the wings: Peru, SAUDI WF, Pakistan (Sukuk), Romania (EUR), Namibia (ESG), Saudi Arabia (ESG) and Ghana (ESG).


Content contributed by Phillip Chew, Conduit Securities Pte. Ltd. All information contained in this document is sourced from public source documents, media releases and not from Conduit Asset Management Pte. Ltd., (the “Company”). All due diligence onus, including and not limited to that related to legal and financial documentation, rests on the investor. This document is intended for distribution to “institutional investor” and "accredited investor" types as per definition by the Securities and Futures Act (Cap. 289) of Singapore, or to those who would qualify as such, under one or more of the categories of “institutional investor” and "accredited investor" so described therein.

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