Brekkie Bond Wrap
Markets resumed some sense of normalcy after the Easter break with London back in, though HK was still on holiday. Sovereign cash bonds were active, particularly in Vietnam and Indon. Sentiment in this space remains cautious with the risk of rising rates still very much on people’s minds.
In corporate credit, there was some selling in Chinese tech and O&G names, though bonds were stable with spreads flattish. In HY, the COGARD complex was still in demand after the stake sale to Pin Ang and potential ratings upgrades from the agencies. Kaisa had its Shenzhen projects unblocked by the government “due to some status changes on the government online registration system”. This is slightly positive as it is an official signal that the government does not want to intervene further into this. Vedanta had its ratings downgraded a notch by S&P to BB-, with a negative outlook maintained, This was largely expected given that the ratings were put on CreditWatch Negative in January given lower commodity prices.
With HK back in today, expect the primary market to heat up again, particularly with the risk-on tone still very much intact, as the Fed lift-off date gets pushed further out into the later part of the year.