Halister News

(Bloomberg) -- France Oct. advance PMI manufacturing est. 50.0 vs previous 49.7.

• France Oct. advance PMI services est. 53.0 vs previous 53.3
• France Oct. advance PMI composite est. 52.8 vs previous 52.7

(Bloomberg) -- Telecoms sector likely to be in focus today following AT&T’s acquisition of Time Warner, but any positive credit market reaction to the takeover may be damped by concerns over possible regulatory obstacles, Bloomberg strategist Simon Ballard writes.

• Asian equities and credit markets edging stronger overnight after fragile opening; suggests firm tone to EUR risk assets later
• A big week for 3Q corporate earnings; key results include Apple (Tuesday), Alphabet, Amazon and Twitter (Thursday)
• Politics set to drive near-term risk asset sentiment as U.S. election campaign enters last 2 weeks and Brexit polemic intensifies; global credit risk remains susceptible to headline risk

• Risk Appetite Model shows recent volatility & spread dispersion as things of the past
• Bloomberg Barclays Eur-Agg Corporate index closed Friday at 111bps (unchanged); Bloomberg Barclays Eur HY index closed at 370bps (-4bps)
• CDX IG closed +0.4bps at 74.25; iTraxx Asia Ex Japan IG is currently -0.5bps at 115.73 and iTraxx Australia quoted -0.6bps at 103.37

NEWS

• Corporate News
• Philips Third-Quarter Profit Rises as Personal Health Gains
• Famous Brands 1H Profit Climbs; Scraps Dividend on High Gearing
• Earnings Speculation Dominates Japan Stocks as Nintendo Slides
• AGL Energy Aims to Sell $500 Million of Assets, CEO Vesey Says
• Cobham Trading in 3Q Challenging, FY Below Expectations

• Financial News
• TD Ameritrade, TD Bank Said Near $4 Billion Scottrade Deal
• Dubai Islamic Bank Quarterly Profit Drops 9.9%; Misses Estimates

• Rating News
• Moody’s changes outlook on Russia’s banking system to stable from negative
• Fitch Affirms China State Construction Engineering at ‘A’/Stable
• S&PGR Affirms JPMorgan Australia Ltd. ‘A+/A-1’ Ratings
• Number of Defaults in Greater China Rose in 2015. S&P Study Says
• Fitch Affirms SK Telecom, SK Broadband at ‘A-’; Outlook Stable

• Other News
• BOJ Warns Banks May Take Excessive Risks to Stay Profitable
• EU Eyes Tailoring Global Capital Rules to Spare Struggling Banks
• China Tackles Bad Debt by Allowing More Asset Firms, News Says
• Carney’s BOE Future Gives Investors Yet More Brexit Uncertainty

ANALYST VIEWS

• A Clinton presidency would generally mean continuity, limiting shocks to markets. Though continuity of policy may prove good for equities in general, Clinton’s regulatory intentions could prove problematic for some sectors, including shadow banking, fracking and trade: Roubini
• It’s NOT because of the ECB’s QE corporate bond purchases that issuance (net) in September may have picked up - as suggested was the case by Mario Draghi. To us, it is complete coincidence: creditmarketdaily.com

NEW ISSUES

• Credit Agricole SCF EU500m 10Y Covered Bond MS -7
• Inmobiliaria Colonial EU600m 8Y MS +135
• European IG credit pipeline here and HY credit pipeline here
• Issuers exposed to S-T rollover and interest-rate reset risk here

• NOTE: Simon Ballard is a credit strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.

(Bloomberg) -- Room for spread compression between state and federal bonds remains limited as overall risk aversion and domestic demand-supply dynamics is more likely to benefit federal govt bond curve, Bansi Madhavani, analyst at India Ratings, says.

• Govt bonds have been outperforming their state counterparts recently as RBI’s OMO and buyback operations augmented interest in sovereign curve
• Sizable issuance of state loans along with special power restructuring bonds issued by states, have kept supply heavy while demand has not kept pace
• Net state loan issuance to date rose to 1.4t rupees compared to 1t same period last year; generic spreads on average 10- year state loans over govt bonds have already narrowed to 35-40bps compared to 60-65bps at the start of fiscal 2017
• NOTE: Nineteen states to sell 201b rupees of bonds on Oct. 25: RBI

--MARTIJN VAN DER STARRE

(Bloomberg) -- Some investors could be hoping for a rate cut in Malaysia, if there is no early fiscal stimulus following the budget on October 21, Rajesh Mahadevan, head of trading strategy at RV Capital, says in interview

• Aiming for a lower fiscal deficit is sound, yet gross Malaysia bond issuance next year won’t be that small, says Mahadevan
• USD/MYR steady at 4.1835
• 5-year MYR bond yield down 1 bp to 3.329%
• Najib chases ‘ultimate’ win as supporters get budget goodies; story here

(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

DOWNGRADES

• Great Eastern Energy
  • Long-term bank facilities cut to D from BBB+ at Care; NCDs cut to C from BBB+
  • Cites delays in debt servicing of bank loans

• IBD Universal
  • Fund-based limits cut to D from B at ICRA
  • Cites delay in servicing

• Neo Carbons
  • LT bank facilities cut to BBB from BBB+ at Care
  • Cites deterioration in financial performance of the group due to weak demand from major end-user segment

UPGRADES

• Annakoot Properties
  • LT bank facilities raised to BB from B- at Crisil
  • Cites strong financial, operational support from parent

• Asirvad Microfinance
  • LT bank facilities raised to A+ from A- at Care
  • Cites fresh equity infusion by Manappuram, significant increase in scale of operations

• Bharat Hotels
  • LT bank facilities raised to BB+ from B at Care
  • Cites improvement in operational performance

• Capricorn Food
  • LT bank facilities raised to BBB+ from BBB at Crisil
  • Cites improvement in group’s operating performance due to higher-than-expected revenue growth

• Jyothy Laboratories
  • NCDs raised to AA from AA- at Care
  • Cites consistent growth in revenues, cash accruals

• P.N. Gadgil
  • LT bank facilities raised to A from A- at Care
  • Cites growing scale of operations, improvement in capital structure

• Sterling Tools
  • Term loan raised to A+ from A at ICRA
  • Cites strengthening market position

(Bloomberg) -- Japan govt bonds starts trading session on a weak note after BOJ announced no JGB purchases today ahead of 20-year auction tomorrow, says Shuichi Ohsaki, chief Japan rates strategist at BofAML.

• BOJ likely to purchase JGBs on the 3 remaining trading days in October except for auction days tomorrow and Thursday; hence downside of super-long JGB market may be limited, says Tokyo-based Ohsaki by phone
• Short- and medium-term JGB may face pressure to pare back expectation for deepening BOJ’s negative interest rates
• 2-year yield rises 0.5bp to -0.245%, 5-year yield adds 0.5bp to -0.190%, 10-year yield increases 0.5bp to -0.055% and 20- year yield is little changed at 0.38%