Halister News

--SHAJI MATHEW

(Bloomberg) -- Spanish 10-year yield may eclipse the July peak at 1.74% to set sights on 1.80% Fibonacci hurdle ahead of stronger resistance at 1.91%, the long-term average line (see chart here).

• Spain 10y yield now at 1.70% vs last Friday close at 1.60%, a 10bps rise mostly attributed to the revival of the Catalan independence campaign
• July peak on radar at 1.73%, with break above to provide impetus for potential rise toward 1.91%, 200- week MA
• Monday’s breakout gap seen to provide yield support (1.66%-1.64%) in the event of any relief rally; below 1.60% required to reassert the downside focus in yield
• Spain’s benchmark bonds fell to the lowest in almost three months after Catalan separatist leaders signaled they may be moving toward a unilateral declaration of independence (click here for more)
• 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) -- Treasury futures (TY1) technical levels in focus.

• Daily trend bias: Bearish
• Comment: Last Thursday’s bullish ’hammer’ candlestick above 200-DMA provided false hope after non-confirmation Friday session; with market trading sub-200-DMA (125-12), risks appear skewed for a probe at July and May troughs at 124-25+/124-23 where fresh buying interest may reside
  • Resistance: 125-12; 125-20; 125-23
  • Support: 124-30/27+; 124-25+; 124-23; 124-20
• NOTE: Contract rolls with active futures on GFUT (no adjustments)
• 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

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

• To get this story sent to your inbox real-time, run NI INRATINGS, click on Display & Edit, then Set Alert Delivery

UPGRADES

• Automat Irrigation
  • Long-term bank facilities raised to BBB+ from BBB at Crisil
  • Cites steady revenue growth
• Creanza Ceramic
  • LT bank facilities raised to BBB- from BB+ at Crisil
  • Cites improved business risk profile
• Golden Texo Fabs
  • LT bank facilities raised to BBB+ from BBB at Crisil
  • Cites healthy revenue growth
• Kashvi Power
  • LT bank facilities raised to BB- from B at Crisil
  • Cites increase in scale, stable cash flow
• Mantora Oil
  • LT bank facilities raised to BBB from BBB- at Crisil
  • Cites healthy growth in operating income
• NTPC Tamil Nadu Energy
  • LT bank facilities raised to A- from BBB+ at Care
  • Cites improved operating, financial performance

DOWNGRADES

• Ducon Technologies
  • LT bank facilities cut to D from BB+ at Crisil
  • Cites over-utilization of cash-credit limit
• Jocil
  • LT bank facilities cut to A from A+ at Care
  • Cites subdued operational, financial performance
• Regency Gangani Energy
  • Fund-based limits cut to D from B at ICRA
  • Cites delays in debt servicing
• Sanco Industries
  • LT bank facilities cut to BB- from BB at Crisil
  • Cites stretch in liquidity due to large working capital requirements

(Bloomberg) -- Current valuation is attractive since it “implicitly ignores the ongoing improvements” on Yapi Kredi’s improving asset quality and capital position, UBS analyst Cihan Saraoglu writes in report.

• Upgrades stock to buy vs. neutral, PT raised to 5.40 liras vs 4.90; implying 24% increase from Monday’s close
• Expects lender’s net specific cost of risk to improve 25bps in 2018, reducing return on equity, or ROE, differential to peers by 2pp and resulting in 14% faster earnings growth
  • Improved profitability seen supporting capital generation and keeping Yapi Kredi above fully loaded Basel-3 capital requirements
  • Expects non-performing loan sales to normalize in 2018, extra provisioning to stop and net specific cost of risk to improve to 100bps from 75bps, while peers’ cost of risk bottoms out
  • Estimates Yapi Kredi earnings to grow 23% YoY in 2018 vs 9% for peers
• Yapi Kredi trades at 4 times estimated 2018 earnings and 0.6x P/B, “too low” for only 150bps negative EVA
• Yapi Kredi shares rise as much as 2.5% after upgrade

To contact the reporter on this story: Tugce Ozsoy in Istanbul at tozsoy1@bloomberg.net To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net Paul Jarvis

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

• Daily Trend Bias: Mildly Bearish
• Comment: Last week’s upside reaction to 200-DMA support line possibly petering out against early Sept. downtrend at 161.30 today; daily studies remain bearish and underpin bears; closing break above 161.37 required to mitigate near-term downside risks
  • Resistance: 161.37; 161.44; 161.62-68; 161.76
  • Support: 160.73-66; 160.34-24; 159.73
• 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 Scott Hamilton