20250317-招银国际-Fixed_Income_Daily_Market_Update_7页_859kb

CMBI Credit Commentary Summary

Core Content

This document is a Fixed Income Daily Market Update by the CMBI Credit Commentary team, covering market movements, economic outlook, and key news affecting the fixed income market in Asia, particularly focusing on Chinese properties and credit growth.

Market Movements

Onshore Bonds

• DBSSP 4.403 '28 tightened by 3bps.
• DBSSP Float 28s/30s remained unchanged.
• ANZ/WSTP/MQGAU T2s widened 1-2bps.
• TOPTBs widened 4-5bps.
• LASUDE 26s declined 0.8pt.

Offshore Bonds

• REGH Perp increased by 0.6pt.
• CPDEV 4.65 '26 rose by 0.5pt.
• YUEXIU 3.8 '31 and POLHON 4 '25 increased by 0.5pt and 0.4pt respectively.
• NWDEVL Perps/27-31s decreased by 1.0-1.8pts.
• SANTAN 9.625/INTNED 7.25/LLOYDS 8 Perps declined by 0.4-1.0pts.
• VNKRLE 25-29s dropped by 0.2-0.6pts.
• MYLIFE/NIPLIF 53-55s declined by 0.2-0.3pt.
• Adani complex bonds dropped by 0.3-1.4pts in India.

Chinese Properties

Sales Performance

• February 2025 (2M25): Contracted sales for 32 developers dropped by 11.5% YoY to RMB219.8bn.
• Top Performers:
  • SINOCE (Sino-Ocean): YoY sales growth of 41%.
  • SUNAC (Sunac China): YoY sales growth of 33%.
  • CHIOLI (China Overseas): YoY sales growth of 55%.
• Bottom Performers:
  • JINGRU (Jingrui Holdings): YoY sales drop of 62%.
  • FUTLAN/FTLNHD (Future Land): YoY sales drop of 51%.
  • AGILE (Agile): YoY sales drop of 45%.
• Sales Growth Trends:
  • YUEXIU (Yuexiu Property): 24% YTD sales growth.
  • POLHON (Poly Real Estate): 33% YTD sales growth.
  • CHINSC (China SCE): 15% YTD sales growth.
  • VNKRLE (China Vanke): -37% YTD sales growth.

Price Movements

• YUEXIU 3.8 '31: Up 0.5pt.
• POLHON 4 '25: Up 0.4pt.
• VNKRLE 25-29s: Down 0.2-0.6pt.
• BABAB 27-35s: Widened 2-3bps.
• WESCHI '26: Up 0.3pt.

China Economy Outlook

Credit Growth

• Credit growth showed a mild rebound, with social financing and loans expected to grow by 8.2% and 7.7% by end-2025, respectively.
• The PBOC is expected to cut RRR by 50bps in 2Q25 and LPRs by 20bps in 2H25 to stimulate economic activity and housing demand.

Social Financing and Loans

• Outstanding social financing growth increased to 8.2% in February 2025 from 8% in January.
• New RMB loans to the real economy declined by 33.4% YoY to RMB650bn in February, missing market expectations.
• Government bond issuance surged by 167% in 2M25, contributing to the rise in social financing.
• Corporate bond issuance increased by 7.2% in 2M25, but M&L loans declined by 13% due to the impact of the LGFV debt swap.

Liquidity and Demand

• M1 supply moderated to 0.1% in February from 0.4%.
• M2 remained flat at 7%.
• Household loan flows declined by RMB389bn in February, with short-term loans down by RMB274bn and M&L-term loans by RMB115bn.
• Consumer demand remains weak, with household loan flows contracting by 86% in 2M25.

Policy Expectations

• The PBOC is likely to cut RRR and LPRs to stimulate the housing market and consumer demand.
• Further relaxation of home purchase restrictions in tier-1 cities is expected, excluding Guangzhou.
• Continued policy support for the stock market, housing market, and durable goods consumption is anticipated.

New Issues and Pipeline

Priced Issues

• Tai An High-tech Construction Group: 3yr, 6.95%, USD50mn.

Pipeline

• Bank Mandiri: 3yr, T+145, Baa2/BBB/-.
• Binjiang Guotou: 3yr, 6.5%, USD.
• Lanxi Transportation Construction Investment Group: 3yr, 6.3%, USD.

Key News and Market Color

• Fosun Pharma sold a stake in United Family Healthcare for USD124mn.
• Lai Sun Development expects a HKD100-150mn loss in 1HFY25 due to improved valuations and reduced finance costs.
• West China Cement expects a 35-45% profit surge in FY24 due to the absence of one-off losses from FY23.
• Yuzhou Properties expects a 55% YoY revenue drop in FY24 due to fewer property deliveries.
• Melco International Development expects HKD1.0bn impairment on assets related to Studio City in FY24, with no impact on cash flow or liquidity.

Author Certification

• The author certifies that the views expressed reflect their personal views and are not influenced by compensation.
• The author has not traded in any securities covered in this report within 30 days prior to its release, nor will they trade within 3 business days after its release.
• The author does not serve as an officer of any Hong Kong listed companies and has no financial interest in them.

Important Disclosures

• This report is for informational purposes only and not investment advice.
• Past performance does not guarantee future results.
• CMBIGM is not liable for any loss or damage resulting from reliance on this report.
• The information is based on publicly available data and is not guaranteed for accuracy or completeness.
• The report is intended for specific recipients only and cannot be reproduced without written consent.

Disclaimer

• This document is not suitable for all investors.
• UK Recipients: Only for those within Article 19(5) or Article 49(2)(a)-(d) of the Order.
• US Recipients: Only for major US institutional investors, and not for general distribution.
• Singapore Recipients: Distributed by CMBISG, an Exempt Financial Adviser, and only to Accredited Investors, Expert Investors, or Institutional Investors.

Contact Information

• Fixed Income Department:
  Tel: 852 3657 6235 / 852 3900 0801
  Email: fis@cmbi.com.hk

• Analysts:

  • Glenn Ko, CFA: 852 3657 6235 / glennko@cmbi.com.hk
  • Cyrena Ng, CPA: 852 3900 0801 / cyrenang@cmbi.com.hk
  • Jerry Wang: 852 3761 8919 / jerrywang@cmbi.com.hk