20260731-招银国际-Fixed_Income_Daily_Market_Update_6页_892kb

CMBI Credit Commentary Summary

📈 Core Content Overview

This document provides a comprehensive summary of the fixed income market dynamics in Asia, focusing on corporate credit performance, policy outlook in China, and key market movements. It also includes insights on major companies and macroeconomic developments, along with important disclosures and disclaimers.

📊 Market Update

• Asia IG Space:

  • Opened 2-4bps tighter, then retraced to unchanged or 2bps tighter by noon.
  • SOFTBKs rose up to 2.0pts on the long end.
  • 5-10yr-to-call AT1s were 0.3-0.8pt higher.
  • VNKRLE 27 gained 0.6pt.
  • LNGFOR 32 fell 0.5pt.
  • Two-way flows observed in HY CNH issues.

• High-Yield Space:

  • VNKRLE 27-29 led gains, up 0.8pt.
  • EHICAR 27 fell 1.6pt.
  • IDASAL 5.8 fell 1.2pt.
  • CITLTD 4.85 fell 1.1pt.
  • PLNIJ 5 1/4 fell 1.1pt.
  • BABA 5 5/8 fell 1.1pt.

• Macro News Recap:

  • S&P, Dow, and Nasdaq rose by +1.66%, +1.19%, and +2.78%, respectively.
  • US 2Q26 GDP growth was +1.5% qoq, below expectations.
  • US Jun'26 Core PCE Price Index was +0.1% mom, lower than expected.
  • US Initial Jobless Claims were +197k, below expectations.
  • UST yields increased: 2yr at 4.23%, 5yr at 4.38%, 10yr at 4.68%, 30yr at 5.21%.

📋 Key Insights

✅ LGELEC (LG Electronics)

• Credit Profile: Improved due to margin expansion and lower leverage in 2Q26.
• Financial Performance:
  • Sales up 14.9% yoy to KRW23.8tn.
  • Operating income rose 147.0% yoy to KRW1.6tn.
  • EBITDA increased 60.0% yoy to KRW2.5tn.
  • Operating margin improved to 6.6% from 3.1%.
  • EBITDA margin improved to 10.3% from 7.4%.
• Liquidity and Leverage:
  • Cash increased to KRW10.1tn as of Jun'26.
  • Net debt fell 23.9% to KRW4.1tn.
  • Total debt/LTM EBITDA improved to 1.9x.
  • Net debt/LTM debt improved to 0.6x.
• Outlook: Neutral on current valuations; viewed as a stable IG industrial credit. Moody's and S&P upgraded ratings in Jan'26 and Jun'26.

📈 China Policy Outlook

• Politburo Meeting: Signals a mildly more accommodative policy stance in 2H26.
• Fiscal Policy: Expected to shift from de facto tightening in 1H26 to expansionary in 2H26.
• Monetary Policy: Possible modest rate cut in 4Q26 as economic momentum softens.
• Economic Growth:
  • Expected to slow from 5.0% in 2025 to 4.6% in 2026.
  • Growth to moderate from 4.7% in 1H26 to 4.6% in 2H26.
• Consumption: Supply-side and services-oriented, not demand-driven.
• Real Estate: Stabilization through targeted measures, not broad easing.
• Technology: Key policy focus, with continued support for AI and advanced manufacturing.
• Capital Markets: Leadership remains attentive to stability, suggesting potential for state-backed buying during volatility.

📚 Market Implications

• Fixed Income: Faster fiscal spending and heavier bond issuance may create mild supply pressure and lead to curve steepening.
• Equity Market (Hong Kong): May perform better in 2H26 due to earnings rebounds, stronger policy support, and easing liquidity headwinds.
• Risk Appetite: Expected to improve in AI, advanced manufacturing, services consumption, and policy-linked infrastructure.
• Underperformance: Property and discretionary consumption may remain underperforming.

📋 New Issues and Pipeline

• Offshore Asia New Issues (Priced): None priced today.
• Offshore Asia New Issues (Pipeline): No pipeline entries today.

📰 News and Market Color

• Onshore Primary Issuances: 86 credit bonds issued, totaling RMB71bn.
• Company Updates:
  • Continuum Green Energy purchased cUSD300mn of COGREN 9.5 02/24/27 via tender offer.
  • HSBC sold AUD36bn Australian home and personal loan portfolio to Blackstone.
  • Marubeni injected USD132mn into Marubeni ASEAN.
  • MGM China Holdings appointed Jeny Lau as new CFO effective 1 Aug'26.
  • Nissan Motor's 1H26 global sales fell 6.7% to 1.5mn vehicles.
  • PCCW's 1H26 consolidated EBITDA rose 3% yoy to HKD6.2bn.
  • POSCO Holdings' 1H26 sales rose 6.1% yoy to KRW37.1tn.
  • SK Telecom among bidders for stake in Bridge Data.
  • Vedanta Limited's 1QFY27 EBITDA surged 98% yoy to INR84.7bn.

📜 Important Disclosures

• Conflicts of Interest: CMBIGM may have positions or engage in transactions in securities of companies mentioned.
• Disclaimer:
  • This report is for information purposes only and not investment advice.
  • Past performance does not guarantee future results.
  • Information is based on publicly available data and may be subject to change.
  • CMBIGM is not a registered broker-dealer in the U.S., Singapore, or U.K., and has no obligation to provide independent advice.

📩 Distribution Restrictions

• United Kingdom: Only for persons under Article 19(5) or Article 49(2) of the Financial Services and Markets Act 2000.
• United States: Intended for "major US institutional investors" only.
• Singapore: 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:
  • Cyrena Ng, CPA | Tel: (852) 3900 0801 | Email: cyrenang@cmbi.com.hk
  • Jerry Wang | Tel: (852) 3761 8919 | Email: jerrywang@cmbi.com.hk
  • Yujing Zhang | Tel: (852) 3900 0830 | Email: zhangyujing@cmbi.com.hk