HALISTER1: INDIA RATINGS: Emson Cut; Dish Infra, Midland Microfin Raised

INDIA RATINGS: Emson Cut; Dish Infra, Midland Microfin Raised

(Bloomberg) -- Here’s a roundup of Indian co. debt-rating changes.
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DOWNGRADES
  • Emson Gears
    • Long-term loan facilities cut to B+ from BB at Crisil
    • LT loan facilities of Osho Forge also cut to B+ from BB at Crisil
    • Expects group’s liquidity to remain stretched due to large repayment obligations
  • JCBL
    • LT loan facilities cut to D from B- at Crisil
    • Cites delay in servicing term debt
  • Sree Ayyanar Spinning
    • LT loan facilities cut to BB- from BB at Crisil
    • Cites stretch in working capital cycle
UPGRADES
  • Armstrong Spinning Mills
    • LT loan facilities raised to BB from BB- at Crisil
    • Cites stable operating performance
  • Dish Infra Services
    • LT bank facilities raised to A+(SO) from A(SO) at Care
    • Cites credit enhancement via corp. guarantee by Dish TV India
  • Dwarikesh Sugar
    • Term loan raised to BBB- from BB+ at ICRA
    • Cites improved outlook for the co.’s core sugar business
  • Garware-Wall Ropes
    • Fund-based limits raised to AA- from A+ at ICRA
    • Cites enhanced operating margins, profitability
  • L.S. Mills
    • Term loan facilities raised to BBB from BBB- at ICRA
    • Cites healthy growth in operating margins due to increase in revenues
  • Midland Microfin
    • LT bank facilities raised to BBB from BBB- at Care
    • Cites improvement in capitalization, scale of operations
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
0526760D IN (Armstrong Spinning Mills Pvt Ltd)
DITV IN (Dish TV India Ltd)
DSIL IN (Dwarikesh Sugar Industries Ltd)
1343867D IN (Emson Gears Ltd)
GWWR IN (Garware Wall Ropes Ltd)

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UUID: 7947283

HALISTER1: INSIDE ASIA: Currencies Turn Lower; Yuan Weakest Since Nov. 2010

INSIDE ASIA: Currencies Turn Lower; Yuan Weakest Since Nov. 2010

(Bloomberg) -- Onshore yuan extends decline while offshore yuan fluctuates; most other currencies in region fall, led by Malaysian ringgit and kiwi, as market digests failed coup attempt in Turkey.
  • Asian investors are more cautious having previously ignored geopolitical risk, ANZ head of FX research Khoon Goh says; weakness in most Asian currencies also follows better-than- expected U.S. retail sales
    • Yen giving back some risk-off driven gains made during attempted coup; NOTE: Japanese mkts closed for holiday today; Thailand also closed
  • U.S. retail sales rose 0.6% m/m in June vs 0.1% est. and revised 0.2% in May; CPI rose 1.0% y/y, same as previous month
  • NZD drops as 2Q CPI comes in lower than ests., +0.4% y/y vs +0.5% forecast; probability of RBNZ rate cut in Aug. at 67%
    • RBNZ should cut rates from 2.25% to 2.00% next month and perhaps to 1.75% by yr-end: Capital Economics
    • Central bank will release economic assessment on July 21
    • Australian 10-yr govt. bond yield rises 4 bps to 2.008%, first time above 2% since July 4; Aussie dollar rises
  • Onshore yuan at 6.6993 vs USD, lowest since Nov. 1, 2010
    • PBOC weakens fixing for first time in four trading days
    • China home sales rose in June at slowest pace this year, while new home prices increased in 55 cities vs 60 in May
    • Offshore yuan moves higher after a brief drop around 11am; FX traders in North Asia say USD/CNH selling accelerated in tandem with USD/CNY sell orders near 6.700
    • Growing signs that PBOC is intervening in FX mkt as USD/CNY approaches 6.7 psychological level, Cebm Group managing director Zhong Zhengsheng and analyst Zhang Lu write in a Sunday note
    • CFETS RMB Index rose last week for first time since May, suggesting PBOC may have intervened to curb bearish speculation on the yuan: Commerzbank
    • Chinese cos. appear to have fallen into “liquidity trap” as the gap between China’s M2 and M1 growth increases: National Business Daily, citing PBOC statistics head
    • China says it will hold military exercises in South China Sea on July 19-21
  • Ringgit slides most this month
    • Malaysia’s second-largest pension fund expects lower returns this year and plans to buy more bonds with maturities of 10 years or more to hedge against further interest-rate cuts
    • 1MDB debt to be slowly retired: New Straits Times, citing second finance minister
    • Headline inflation may fall to around 1.7% y/y in June from 2.0% in May, Goldman Sachs wrote in July 15 note; data due July 20; median est. is +1.8%
  • Won snapping 3-day rally
    • Overseas investors bought $9.16b more USD/KRW NDFs in 2Q than they sold, following net purchases of $14.86b in 1Q: BOK statement on July 17
  • Rupiah heads for second daily decline
    • ING expects BI to deliver two 25-bp rate cuts by yr-end, according to note today; reviewing yr-end USD/INR est. of 13,400 for downward revision; FX pair now at 13,100
  • Philippine peso edges lower after 3-day rally; central bank to tighten rules for FX, remittance companies: Inquirer, citing Deputy Governor Espenilla
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Khoon Goh (Australia & New Zealand Banking Group Ltd)

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UUID: 7947283

HALISTER: Goldman Seen Struggling to End Dive in Fixed-Income Market Share

Goldman Seen Struggling to End Dive in Fixed-Income Market Share

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
C US (Citigroup Inc)
GS US (Goldman Sachs Group Inc/The)
JPM US (JPMorgan Chase & Co)
BAC US (Bank of America Corp)
MS US (Morgan Stanley)

People
Ashok Varadhan (Goldman Sachs Group Inc/The)
Brennan Hawken (UBS Securities LLC)
Devin Ryan (JMP Group LLC)
Gary Cohn (Goldman Sachs Group Inc/The)
Glenn Schorr (Evercore Partners Inc)

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UUID: 7947283

HALISTER1: Fed on Hold Till End-2017; BOE to Cut 40bps 3Q, BOC 25bps 4Q: MS

Fed on Hold Till End-2017; BOE to Cut 40bps 3Q, BOC 25bps 4Q: MS

(Bloomberg) -- Morgan Stanley expects growth in developed markets to decelerate to 1.4% annually in 2016 from 1.9% in 2015 and further to 1.2% in 2017, analysts including Chetan Ahya and Ellen Zentner write in note received today.
  • Growth to miss consensus expectations, especially in the U.S; leads central bank policy to be easier for longer, with no Fed hike through the end of 2017 vs. prev. forecast for 3 rate hikes
    • Other DM central banks may ease monetary policy over summer
    • Expect 40 bps of BOE rate cuts in 3Q16 and additional QE in the autumn vs previous expectation for 50bp of hikes in 2017
    • Canada to cut 25 bps cuts 4Q16 vs. unchanged previously
  • Lowflation environment to prevail, reflecting slower growth and a wider output gap
    • Core inflation in U.S., Eurozone and Japan to remain subdued and well below central banks’ targets
  • Reactivating fiscal policy will become more critical as effectiveness of monetary policy wanes
    • Japan to announce fiscal stimulus soon
    • Other developed markets will be constrained in their response due to relevant political cycle
    • Slowdown in domestic demand in the initial quarters should be more concentrated in capex spending
    • Improvements in the labor market will likely begin to stall as growth weakens, which should in turn weigh on the consumer
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Chetan Ahya (Morgan Stanley)
Ellen Zentner (Morgan Stanley)

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UUID: 7947283

HALISTER1: China Encouraging Overseas USD Bonds to Offset Outflows: CIFM

China Encouraging Overseas USD Bonds to Offset Outflows: CIFM

(Bloomberg) -- Chinese policymakers has been urging local govt financing vehicles and state-owned enterprises to issue USD bonds overseas in past 2 months due to dollar strength, according to China International Fund Management, a joint venture between JPMorgan Asset Management and Shanghai Trust.
  • As Chinese investors are typically the main buyers of China- issued USD-denominated bonds abroad, the proceeds would return to China and help offset capital outflows, William Chung, senior fund manager at CIFM Asset Management Hong Kong said in an interview today
  • Absence of defaults in LGFV bonds so far suggests implicit guarantee by govt
    • Freeze on QDII and RMB-QDII outbound investment quotas may remain
    • Policymakers likely to keep capital controls for a while
  • Yuan may depreciate gradually before domestic consumption replaces exports as main driver of GDP growth; weakening yuan may curb appetite for Dim Sum bonds
  • PBOC unlikely to ease aggressively through rate cuts as this may fuel an “irrational” property market
    • PBOC may prefer using medium-term lending facility and non-conventional policy tools to guide liquidity to certain sectors and given capital outflows are moderate; may cut RRR by 50bps
  • Sovereign bond yield curve to stay flat, with short-end buoyed by credit concerns and absence of further easing
    • Long-end lacks momentum to rise because low inflation argues for little premium
  • NOTE: PBOC injected 259b yuan into 13 banks via MLF operations: statement on July 13
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
William Chung (China Intl Fund Mgmt Co Ltd)

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UUID: 7947283

HALISTER: Finding Landing Slots Is India’s Task After Jet Order Spree (1)

Finding Landing Slots Is India’s Task After Jet Order Spree (1)

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
BA US (Boeing Co/The)
693534Z IN (GoAirlines India Pvt)

People
Anthony Fernandes (AirAsia Bhd)
Mark Martin (Martin Consulting LLC)
Narendra Modi (Republic of India)
Sanjiv Kapoor (SpiceJet Ltd)

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UUID: 7947283