Halister News

(Bloomberg) -- Here’s a roundup of Indian co. debt-rating changes.

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UPGRADES

• Exicom Tele-Systems
  • Long-term bank facilities raised to BBB from BBB- at Care
  • Cites profitable scale-up of operations, improvement in capital structure
• Khadim India
  • LT bank facilities raised to A- from BBB+ at Care
  • Cites improvement in financial performance
• Kothari Agritech
  • LT bank facilities raised to BBB- from BB at Care
  • Cites increase in scale of operations
• Jupiter Solar Power
  • LT bank facilities raised to BB- from B at Care
  • Cites increase in operating income, higher profitability
• SUL Steel
  • LT bank facilities raised to BB from B at Crisil
  • Cites extensive experience of group’s promoters in steel industry
• Surya Global Steel Tubes
  • LT bank facilities raised to A+ from A at Care
  • Cites healthy growth in sales volumes
• Surya Roshni
  • LT bank facilities raised to A+ from A at Care
  • Cites healthy growth in steel-pipe segment
• WAA Solar
  • LT bank facilities raised to A- from BBB+ at Care
  • Cites healthy track record of over five years of operations of its solar power plant
• Walwhan Renewable Energy
  • LT bank facilities raised to AA- from A at Care
  • Cites strong and steady cash flow generation, comfortable debt coverage indicators
• Weizmann Forex
  • Working capital raised to A- from BBB+ at Care
  • Cites new tie-ups made with leading global money transfer companies, which is likely to boost volumes

DOWNGRADES

• Emcure Pharmaceuticals
  • LT bank facilities cut to A+ from AA- at Care
  • Cites degrowth in total operating income, decline in profitability
• Eurotas Infrastructure
  • Fund-based facility cut to BB(SO) from BB+(SO) at Brickwork
  • Cites uncertainty in viability of cement project, pending completion of strategic debt restructuring
• Komos Automotive India
  • LT bank facilities cut to BB from BB+ at Crisil
  • Cites weak operating performance
• Indo Laminates
  • LT bank facilities cut to D from B+ at Crisil
  • Cites delay in meeting term debt obligation
• Intex Technologies
  • LT bank facilities cut to A- from A at Care
  • Cites decline in sales, operating profitability
• Tamil Nadu Newsprint
  • LT bank facilities cut to A from A+ at Care
  • Cites lower-than-expected performance of multi-layer coated board division post commissioning in May 2016
• Union Bank of India
  • Basel III perpetual bonds cut to AA- from AA at Care, Basel II lower tier 2 cut to AA+ from AAA and Basel II upper tier 2 reduced to AA from AA+
  • Cites deterioration in income and financial profile due to continued stress on asset quality leading to high provisioning requirement
• Unique Organics
  • LT bank facilities cut to B+ from BB- at Crisil
  • Cites subdued business performance in medium term

(Bloomberg) -- Bund futures (RX1) technical levels in focus.

• Daily Trend Bias: Bullish
• Comment: Downside exhaustion confirmed following Monday’s bullish session; contract convincingly eclipses the Friday high of 161.30, which shifts the trend bias higher; bulls seen charging higher toward 161.82-98 where profit-take interest likely to reside
  • Resistance: 161.49; 161.60-66; 161.76-82; 161.98
  • Support: 161.34 (daily pivot); 161.18; 161.07; 160.92
• NOTE: Roll-adjusted by difference in GFUT
• NOTE: Sejul Gokal is a FICC technical strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice

To contact the reporter on this story: Sejul Gokal in London at sgokal1@bloomberg.net To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net Anil Varma

(Bloomberg) -- Foreign investors are getting short in the long-end of the yen curve, setting up for Prime Minister Abe’s ruling LDP to face potential losses at the election which would raise doubts about BOJ Governor Kuroda’s future. Election Scenarios

• Strategists narrow down three scenarios for the election: LDP suffers only minor losses, retains a majority but loses many seats, or loses the majority altogether
  • Under the latter two scenarios, the JGB curve should steepen in the long-end (10y+) as markets price some concern that monetary easing will be dialed back after Kuroda’s term ends, writes Deutsche Bank’s chief strategist Makoto Yamashita in a client note
  • In the event Abe’s LDP maintains majority, JGB yields should either hold steady or decline slightly: Deutsche Bank
• In the event of heavy LDP losses, the initial market reaction may be tempered by risk- off moves which could see some bull flattening in JGBs, a Shinichiro Kadota, senior FX & yen-rates strategist at Barclays Securities Japan Ltd., writes in a note
  • However, over the medium term, more expansionary economic policies could bear-steepen the JGB curve, he adds

Positioning

• Recent JPY curve steepening due to widening of JSCC/LCH basis has suggested heavy long-end paying from foreign investors to set-up for the election, which points to positioning for a slip in power from Abe’s party
• While foreign investors appear to have set-up with significant paid positions in the long-end, domestic players appear to have remained comparatively calm, and have yet to make any "sizable bets" on the election outcome, according to Koichi Sugisaki, a strategist with Morgan Stanley MUFG Securities Co.
  • As the large paid positions may be reduced after the election, and given the potential for a risk-off bull flattening if Abe experiences heavy losses, Morgan Stanley recommends entering bullish risk reversal strategy in the long- end of curve
  • Recent payer buying in the long-end, has enriched payer skew; recommend buying 1m20y receiver at 0.6975% vs selling 1m20y payer at 0.800% at zero cost

To contact the reporter on this story: Stephen Spratt in London at sspratt3@bloomberg.net To contact the editors responsible for this story: Tan Hwee Ann at hatan@bloomberg.net Patricia Lui