Financials Credit Analyst

Hank Calenti, CFA

CreditContinuum

Credit

Liquidity changes everything. Liquidity dominated global credit markets this week creating a FOMO (fear of missing out) investor environment, despite a rising real economy impact from the novel coronavirus (nCov-2019). As the week ended, the US Labor Department reported that wages rose by only 3.1% year-over-year. The moderate level of wage growth suggests no need for the Fed to guide interest rates higher in the near term. With liquidity and rates driving credit markets, there may be bigger risks than the coronavirus for investors this year, such as the US elections. Nonetheless, the snap back in risk sentiment suggest to us that long-term credit buying opportunities remain but may be fleeting. In the primary market, debt issuance remained tepid in Asia although <a href="https://www.smartkarma.com/entities/cssc-hong-kong-shipping-co-l" target="_blank" rel="noopener" data-smartkarma-citation="entities:28068:1">CSSC (Hong Kong) Shipping Co Ltd (3877 HK)</a> and <a href="https://www.smartkarma.com/entities/indian-railway-finance-corporation" target="_blank" rel="noopener" data-smartkarma-citation="entities:28417:1">Indian Railway Finance Corporation (INFZ IN)</a> priced deals in the US dollar market. This could lead to more deals next week. Concurrently, <a href="https://www.smartkarma.com/entities/malayan-banking-bhd" target="_blank" rel="noopener" data-smartkarma-citation="entities:600:1">Malayan Banking (MAY MK)</a> brought a three-tranche deal worth ¥61billion ($556 million) into Japan’s Samurai market. Among high yield debt issuers, the Republics of Ghana and Turkey took advantage of risk-on sentiment to attract demand for their B3 and B1 rated bonds, respectively. However, the clearest signal that the market may be drowning in liquidity comes from <a href="https://www.smartkarma.com/entities/alpha-bank-ae" target="_blank" rel="noopener" data-smartkarma-citation="entities:22601:1">Alpha Bank AE (ALPHA GA)</a>.In this week's report, we assess recent credit spread movements, compare Hong Kong bank Additional Tier 1 bond performance and highlight bank debt capital new issuance that may have implications for Asian bank debt.

Liquidity changes everything. Liquidity dominated global credit markets this week creating a FOMO (fear of missing out) investor environment, despite a rising real economy impact from the novel coronavirus (nCov-2019). As the week ended, the US Labor Department reported that wages rose by only 3.1% year-over-year. The moderate level of wage growth suggests no need for the Fed to guide interest rates higher in the near term. With liquidity and rates driving credit markets, there may be bigger risks than the coronavirus for investors this year, such as the US elections. Nonetheless, the snap back in risk sentiment suggest to us that long-term credit buying opportunities remain but may be fleeting. In the primary market, debt issuance remained tepid in Asia although CSSC (Hong Kong) Shipping Co Ltd (3877 HK) and Indian Railway Finance Corporation (INFZ IN) priced deals in the US dollar market. This could lead to more deals next week. Concurrently, Malayan Banking (MAY MK) brought a three-tranche deal worth ¥61billion ($556 million) into Japan’s Samurai market. Among high yield debt issuers, the Republics of Ghana and Turkey took advantage of risk-on sentiment to attract demand for their B3 and B1 rated bonds, respectively. However, the clearest signal that the market may be drowning in liquidity comes from Alpha Bank AE (ALPHA GA).In this week's report, we assess recent credit spread movements, compare Hong Kong bank Additional Tier 1 bond performance and highlight bank debt capital new issuance that may have implications for Asian bank debt.

Asian Bank HY Credit Weekly: Liquidity Overpowers Coronavirus in Credit

China

QingHai Provincal Investment Group Co.,Ltd. processes metal products. The Company produces electrolytic aluminum, aluminum base alloys, and other products. QingHai Provincal Investment Group also operates power sales, coal sales, real estate development, and other businesses.

Qinghai Provincial Investment (QINIGZ CH)

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Asian Bank HY Credit Weekly: Liquidity Overpowers Coronavirus in Credit

Liquidity changes everything. Liquidity dominated global credit markets this week creating a FOMO (fear of missing out) investor environment,...

Hank Calenti, CFA