HALISTER1: Taiwan Premier Asks Task Force to Probe Mega Bank Case Details

Taiwan Premier Asks Task Force to Probe Mega Bank Case Details

(Bloomberg) -- Govt task force seeks to clarify accountability of Mega Bank case in 2-3 weeks, Premier Lin Chuan says.
  • Mega Bank executives are visiting U.S., Panama to communicate with authority on related subjects: Lin
  • NOTE: Mega Fined $180m by N.Y. Over Anti-Money Laundering Law Link
  • NOTE: Taiwan Regulator to Inspect Mega Bank’s N.Y., Panama Branches Link
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
2886 TT (Mega Financial Holding Co Ltd)

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UUID: 7947283

HALISTER1: AUCTION PREVIEW: BTPs Lack Concession; Supply Outlook Supportive

AUCTION PREVIEW: BTPs Lack Concession; Supply Outlook Supportive

(Bloomberg) -- Italy to sell 0.45% 2021, 1.25% 2026 for EU5b-EU6b; as well as 2023 CCTeu for EU1.25b-EU1.75b.
  • Analysts highlight lack of concession in the issues and see 10Y repo levels, potential month-end demand and BTP supply outlook as supportive
  • BBVA (Jaime Costero)
    • 5Y has outperformed peers, now sits as slightly rich vs fitted curve; 3Y-7Y sector has become more popular in terms of activity, which may support at auction
    • 10Y has seen some concession vs peers, particularly against the 11/2027; issue trades slightly special in repo, which is also a supportive factor
  • Mizuho (Antoine Bouvet)
    • 5Y sector remains rich by long-term standards on 2s5s8s fly; the roll has richened since the last tap, which may be supportive as new 5Y may be launched next month
    • 10Y roll has been mixed, hints at lukewarm investor support for the recently launched 10Y benchmark
  • UniCredit (Elia Lattuga)
    • BTPs have cheapened vs core over the past two weeks, 10Y spread now back to ~120bps (7bp above recent lows)
    • BTPs have also cheapened vs SPGBs over the past week, but supply cycle favors BTPs after the auction, see room for some tightening
    • 10Y yield is ~10bps above the low; 7s10s spread has steepened by a few basis points over past two weeks
    • 5Y benchmark has richened vs short end, doesn’t look especially attractive in its area
    • Expectations for upcoming ECB meeting have moderated and should limit the risk of negative surprise reaction if central bank remains in wait-and-see mode
  • Societe Generale (Marc-Henri Thoumin)
    • 5Y offers very little RV vs other BTPs; bond has been stable relative to curve before auction offering no concession
    • 10Y issue offers some pickup vs shorter-dated bonds, 2023/2026 spread has steepened ~5bps in z-spread since mid-August; there has been no particular concession vs peers
  • Commerzbank (Christoph Rieger)
    • Many investors should be keen to wait for better levels in BTP before adding exposure given upcoming political risks
    • Supply outlook is generally favorable for the remainder of the year and sizable index extension at month-end should see the auction absorbed smoothly
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
UCG IM (UniCredit SpA)

People
Jaime Costero (Banco Bilbao Vizcaya Argentaria SA)
Antoine Bouvet (Mizuho Financial Group Inc)
Christoph Rieger (Commerzbank AG)
Elia Lattuga (UniCredit SpA)
Marc-Henri Thoumin (Societe Generale SA)

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UUID: 7947283

HALISTER1: EU CREDIT DAILY: Buoyant Performance; Apple Tax, French Banks

EU CREDIT DAILY: Buoyant Performance; Apple Tax, French Banks

(Bloomberg) -- Credit markets performed better over summer, supported by expectations of sustained, if not increased, policy accommodation, writes Bloomberg strategist Simon Ballard.
  • European investment-grade corporate bonds had a total return of 2.9% in the three months through August, compared with 1.9% in the three months earlier; have returned 6.2% so far this year
  • With govt bond yields anchored, corporate bonds remain asset class of choice for incremental yield
    • Goldilocks macro outlook remains supportive of risk appetite
  • Focus this week likely to be on Friday’s U.S. payrolls report ahead of slowdown into Labor Day
  • CDX IG closed unchanged at 74.93 in overnight session; iTraxx Asia Ex Japan IG currently -0.4bps at 113.25 and iTraxx Australia quoted -0.6bps at 99.90
NEWS
  • Corporate News
  • Apple’s Day of Reckoning Comes With Billion-Euro Tax Risk
  • Mitsubishi Motors Awaits Japan Regulator’s Fuel Economy Findings
  • Samsonite Sees Tumi Sales Doubling to $1 Billion on Global Push
  • Tata Motors to Change Supplier Structure, Refine Supply Terms
  • Eskom Seeks South Africa Talks to Review Independent Power
  • Debt-Led Phone War May Blow $74 Billion Hole in India Wallet
  • Financial News
  • Qatar Bank CEO Says Liquidity Improving After $9 Billion Bonds
  • Four Nomura Investment Bankers Said to Leave as Firm Shrinks
  • UniCredit Weighs Combining Asset Mgr With Intesa’s: Messaggero
  • Brexit Boosts Lure of Sticky Deposits for U.K. Banking Startups
  • Capital Group Increases Credit Suisse Stake to 5.1%, Filing Says
  • France’s Montebourg Says He Would Consider Nationalizing Banks
  • Credit Rating News
  • S&PGR Affirms SoftBank Group ’BB+’ Rating; Outlook Stable
  • Moody’s Affirms Japan’s A1 Rating and Stable Outlook
  • Other News
  • Morgan Stanley Says Forget September as JPMorgan Tips Weak Jobs
ANALYST VIEWS
  • What’s driving it (market performance)? For European corporate debt, it’s central bank QE activity and the low- yielding environment seeing investors look for a fixed asset offering a relatively decent income stream: creditmarketdaily.com
  • The market backdrop for European credits remains favorable. Last week saw further inflows in both European investment grade and high yield funds: Danske
NEW ISSUES
  • No New Issues Monday
  • 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.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER1: Taiwan Premier to Hold Briefing on Mega Bank at 4pm

Taiwan Premier to Hold Briefing on Mega Bank at 4pm

(Bloomberg) -- Premier Lin Chuan to hold briefing on Mega Bank case, according to cabinet mobile message.
  • NOTE: Mega Fined $180m by N.Y. Over Anti-Money Laundering Law Link
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
2886 TT (Mega Financial Holding Co Ltd)

People
Lin Chuan (Taiwan)

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UUID: 7947283

HALISTER1: PBOC Injections Shift Bond Buyers to 14-Day Funding: Stanchart

PBOC Injections Shift Bond Buyers to 14-Day Funding: Stanchart

(Bloomberg) -- China’s money market curve is flattening, as injections by PBOC prompt investors to borrow more through 14-day funding rather than seek overnight cash, according to Standard Chartered.
  • The 14-day funding cost has declined after PBOC anchored the repo rate lower via its recent daily reverse repo sales, prompting bond investors to shift to the longer financing cycle, Standard Chartered senior Asia rates strategist Becky Liu says
    • This gives more certainty in funding cost and “safer” positions in the bond markets
    • ~30 bps spread between 1-day and 14-day funding is “reasonable,” compared with the spread of more than 60 bps earlier
    • NOTE: After PBOC resumed selling 14-day reverse repo on Aug. 24, first time since Feb., the repo rate has fallen to 2.4429% today, from the six-month average of ~2.7%. 1-day repo rate has risen to 2.0683% today from the six- month average of ~1.99%
  • Lenders are less motivated to lend overnight money since they can lend 14-day with a higher premium: Liu
  • PBOC would probably use 7-day and 14-day reverse repo rates together as policy rates in the future, and it may manage overnight liquidity via passive tools such as SLF (standing lending facility) when there is sudden liquidity squeeze
    • The Chinese central bank probably won’t sell 1-day reverse repo as that would be too much intervention
  • Bond market is still digesting PBOC’s recent move
    • Long-end of yield curve still depends on macro data; expects RRR cut in 2H, but only when the currency mkt stabilizes
  • NOTE: Yield of 2.9% China govt bond due May 2026 rises 1 bp to 2.780% today
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
STAN LN (Standard Chartered PLC)
PBCZ CH (People's Bank Of China)

People
Becky Liu (Standard Chartered PLC)

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UUID: 7947283

HALISTER1: INDIA RATINGS: Solan Spinning Cut; Oudh Sugar Raised

INDIA RATINGS: Solan Spinning Cut; Oudh Sugar Raised

(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
  • Solan Spinning Mills
    • Long-term loan facilities cut to D from B+ at Crisil
    • Cites delay in servicing debt obligation
UPGRADES
  • Drashti Cotspin
    • LT bank facilities raised to B+ from B at Care
    • Cites successful start of operations, after project completion
  • Kairali Exports
    • LT loan facilities raised to B+ from B at Crisil
    • Cites improvement in firm’s liquidity
  • Namra Finance
    • LT bank facilities raised to BBB(SO) from BBB-(SO) at Care
    • Cites revision in rating of guarantor Arman Financial Services
  • Prasanthi Cashew
    • LT loan facilities raised to B+ from B at Crisil
    • Cites improvement in liquidity due to increase in cash accruals
  • Pratibha Milk
    • LT bank facilities raised to BBB from BB- at Care
    • Cites support from founders via capital infusion for meeting capex
  • Oudh Sugar
    • LT bank facilities raised to BB+ from BB- at Care
    • Cites exit from the corporate debt restructuring mechanism, substantial improvement in financial performance
  • Vashi Electricals
    • LT loan facilities raised to A- from BBB+ at Crisil
    • Cites increase in revenue, healthy profitability
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
OUDH IN (Oudh Sugar Mills Ltd)
ARLF IN (Arman Financial Services Ltd)
6592388Z IN (Vashi Electricals Pvt Ltd)

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UUID: 7947283