亚洲信用策略：亚洲信用周度聚焦（8月20日至26日当周）

Asia credit weekly spotlight (week of20Augto 26 Aug)

• Asia credit spreads remained resilient WoW, with Asia IG/HY trading at 64bp/320bp respectively.
  • IG: Indo outperformed, tightening 3bp WoW, and the rest were broadly unchanged.
  • HY: China HY underperformed, widening 19bp WoW, while the rest were 1bp to 7bp tighter.
• Investment outlook: Against the backdrop of volatile rates and rich valuation, we favor a cautious approach, focusing on fundamentally sound HY credits and the front-end of the curve to enhance yields while limiting duration risk.
• Issuance:
  • APAC primary issuance totaled US$8.5bn this week, including US$3.6bn from IG corps and US$4.9bn from financial sector.
  • YTD APAC supply stands at US$191bn (+2%YoY), driven by AXJ (+7% YoY) and Japan (+7% YoY), partly offset by Australia (-23%YoY).
  • 7M26 net supply turned negative at US$14bn before coupons and US$50bn after coupons. AXJ was the main drag, posting net redemptions of US$32bn before coupons and US$52bn after coupons.
• Sector highlights:
  • Financials: Indian bank senior bonds: supply peaked, high-quality name has value.
  • Tech: Alibaba’s HK$80bn share placement to fund AI investments. Baidu said no plan for share placements.
  • Gaming: SJM (report)reported 2Q26 EBITDA at HK$783mn, 78% of 2Q19 level. Melcoannounced to call back 5.625% 2027 at par, plus accrued and unpaid interest, on Sep 23.
  • China industrial: H&HandHongqiaodelivered strong 1H26 results, with higher EBITDA, positive free cash flow, and lower net leverage. West China Cement (WESCHI) reported 1H26 EBITDA down 18% YoY due to weaker China sales partly offset by increasingcontribution from overseas.
  • CN property:China’s central housing provident fund authority aligned its mortgagerules with Beijing’s latest housing-easing measures. Jinmao,Greentown,Seazen,COLI(see reports) reported 1H26 results this week.
  • Other SEA corp: S&P revised PTTGC’s outlook to positive from negative and affirmedBBB- rating on earning rebound. Nickel Industries reported strong 1H26 results (seereport).
  • India corp: AERA announced CP4 tariff cuts for Hyderabad Airport. IIFL Home Financereceived INR9.6bn tax demand. Piramal Finance issued warrants to founder and launchedQIP.
  • Australia:Aurizon Network launched an AUD 10Y fixed rate bond offering. Fortescue is considering a RMB3bn panda bond issuance, according toBloomberg. Mineral Resources (MinRes (report)) reported strong 2HFY26 results,supported by higher lithium prices. Woodsidereported YoY stable 1H26EBITDA, whileKaroonreported EBITDAX -35% YoY on lower volumes.
• Defaults: We did not see any defaults this week. The LTM default rate remained 0% for AXJ/APACHY.
• Fund flows:
  • APAC hard funds saw outflow of US$73mn.
  • All-EM hard funds saw US$269mn inflow.
  • US IG funds saw US$5.0bn inflow.
  • US HY funds reported US$1.3bn outflow.
• Valuation:
  • Asia credit spread pick-up against US: Asia IG was in line with US IG while Asia HY underperformed US HY.
  • Asia curves are flatter than US IG non-financial for most sectors, except for 5s10s Australia bank senior, 10s30s China tech, and some Indo quasi.