亚太地区-信贷策略-亚洲债券市场观察

www.research.hsbc.comDisclosures & Disclaimer: This report must be read with the disclosures and the analyst certifications inthe Disclosure appendix, and with the Disclaimer, which forms part of it.Play video withDilip ShahaniFixed IncomeAsia CreditDecember 2019 / January 2020By: HSBC Asia credit research teamThe VIEWOverview: Picking up penniesCredit ReviewBanks Overview Corporates OverviewAsia’s Bond Markets 1 Fixed Income ● Asia Credit December 2019 / January 2020 2020 Credit Strategy: For 2020, we believe in keeping it simple. The positives and negatives are delicately balanced, so we feel it will be a year of picking up pennies. Put another way, investors should be content to clip coupons. Having said that, we have a bias towards high yield corporates and in particular the Chinese property space. The sector should benefit from a tougher stance by regulators and a drop in net primary issuance. From the performance perspective, we expect total return1 for iBoxx AHBI-Corp to be an impressive 10.8% vs 6.9% for iBoxx ADBI in 2020. We have iBoxx ADBI and AHBI-Corp spread forecasts for end-2020e at 155bp and 570bp, respectively, compared with 169bp and 626bp as of 6 December 2019. Credit Review: 2019 can be summed up as a time of disorderly trade war escalations, global growth concerns and heightened refinancing risks, which caused the Asia credit market to bounce back and forth throughout the entire year. Nonetheless, Asia USD bonds and credit benchmarks broadly tightened; the average spreads of the overall Asia credits (Markit iBoxx ADBI) and high yield corporate bonds (Markit iBoxx AHBI-Corp) tightened 38bp and 101bp, respectively, from the beginning of the year, and stood at 169bp and 626bp as of 6 December 2019. In terms of total return, ADBI posted a y-t-d total return of 10.74%, while AHBI-Corp reported a y-t-d total return of 11.85%. On the supply front, primary activity remained robust throughout the year. As of 6 December, a record total of USD301bn worth of USD notes were raised across Asia. Including EUR-denominated bonds, 2019 y-t-d supply reached USD327bn. Elsewhere, liquidity stress and corporate governance issues continue to weigh on Asian corporates. Reminders of weak credit profiles, mostly among mainland Chinese corporates, in the form of failure to repay principal and interest along with delayed coupon payments, kept surfacing in the news. In Credit Review, we talk more about defaulted names and/or concerned credits, along with rating actions that happened throughout the year which show that rating agencies have taken a relatively dim view on Asian credits this year. The outlook for Asia Banks in 2020 takes into consideration that “Failure is an option” based on the stress seen in 2019, specifically in China and India. There have been significant bank failures in China and India over the past year that have changed assumptions about the top-down institutional support accorded to this sector. In China, the failure of Baosha