Halister News

(Bloomberg) -- Investigation on alleged money laundering involving Philippine banks and casinos“hopefully will enhance measures to ensure compliance to law versus money laundering,” Cesar Virtusio, executive director of the Bankers Association of the Philippines, says in interview in Makati City.

• “Bank officials from the top down are fully aware of rules of

banking, and they will obviously not violate such rules,” Virtusio says. “There’s always room for improvement.”

• NOTE: $1 Billion Plot to Rob Fed Accounts Leads to Manila Casinos Link

(Bloomberg) -- Italy to sell 0.3% 10/2018 for EU1.5b-2b, 0.95% 03/2023 for EU3.5b-4b, 1.65% 03/2032 for EU1b-1.5b. New 7Y close to fair value, 3Y offers value in ASW, 15Y expensive on curve given domestic demand, analysts say.

• ING (Martin van Vliet)
  • New 7Y strongly bid in the gray market on Wed., though now trades at fair value; old 7Y still trades at 1bp-2bps concession to the fitted low-coupon BTP curve
  • 3Y remains PSPP eligible for another 6-months, looks a tad cheap to the curve, also reasonably attractive in ASW terms for bank treasuries
  • BTPS 1.65% 03/2032 have been trading persistently rich to BTP, which suggests a preference of some domestic investors, notably insurance companies

• UniCredit (Elia Lattuga)
  • New 7Y offer pick-up of ~10bps vs 04/2022s; recommend buying 7Y in ASW vs 5Y
  • 3Y is close to richest outright lvl in 3-months, auction may see record low yield for 3Y; still attractive given ECB outlook
  • Recent long-end peripheral supply has been strong recently; 10s15s Italy trades near top of 6-month range; 03/2032 issue sits at cheapest end of YTD range on 10s15s30s fly

• SocGen (Marc-Henri Thoumin)
  • New 03/2023 issue offers less generous roll than last 7Y launch; 7Y sector has underperformed shorter-dated bonds in recent months
  • Potential for a strong rally in BTPs looks limited given ongoing political, fiscal concerns in peripherals
  • 3Y issue has cheapened ahead of auction, underperforming longer-dated BTPs; recommend 2018/2020 BTP steepeners vs SPGBs ** 03/2032 bond remains rich in the 15Y sector, expect limited interest in this bond

(Bloomberg) -- Rizal Commercial Bank President Lorenzo Tan has offered to go on leave to give bank free hand in investigating alleged money laundering issue involving Philippine lender’s Jupiter branch in Makati, his counsel Francis Lim says in statement.

• Tan hasn’t offered to resign, board’s trust in him is intact and unshaken: Lim
• Anti-Money Laundering Council is investigating issue to determine identities of those involved, best to wait for findings of council, Communications Secretary Sonny Coloma says in separate statement
• NOTE: Rizal Bank’s CEO Vows to Cooperate With Inquiry on $81m Deposit Link
• NOTE: Rizal Bank Says It’s Probing $81 Million Deposit, Transactions Link
• NOTE: Senate to hold investigation March 15

(Bloomberg) -- Credit Suisse lowers Singapore’s 2016 GDP expansion forecast to 1.7% from 1.9% previously, citing weaker global growth, according to note dated March 10.

• Lowers its MAS core inflation projection to 0.6% from 0.9%
• Expects MAS to keep exchange-rate policy stance on hold in April
• Has end-2016 predictions of 1.4100 for USD/SGD and 1.75% for 3-mo. interbank offered rate
• NOTE: DBS cuts 2016 GDP growth forecast to 1.5% from 2.1%

(Bloomberg) -- Total compensation increased slightly to EU10.5b in 2015 (2014: EU10b), partly reflecting FX movements, together with a rise in number of full-time equivalent staff to 101,104, up by ~3,000 vs end of 2014.

• Increase driven in part by internalization of external staff in key infrastructure areas, strategic hiring for growth in specific businesses, strengthening of bank’s control functions (Compliance, Legal, Audit)
• Deutsche Bank 2015 group total bonus pool EU2.4b
• Deutsche Bank 2015 John Cryan total compensation EU1.9m
• Deutsche Bank 2015 Juergen Fitschen total compensation EU3.8m

(Bloomberg) -- ECB has given a huge “risk-on” message to credit mkts, but some investors see move as a policy error likely to trigger concerns about future crowding-out problems, Bloomberg strategist Simon Ballard writes.

• ECB addition of EUR IG non-bank corporate bonds to QE buying will fuel risk appetite across the quality spectrum if investors perceive risk of having to hunt for liquidity in other areas of the credit mkt
  • But funding mkt for corporates was not “broken” so some investors may question ECB merit in buying corporate paper
  • Secondary credit mkt liquidity already poor; ECB move will only exacerbate difficulties in sourcing paper, trading
  • ECB may now be seen as lender of last resort for corporate credit mkt; implicit backstop bid may encourage complacent risk taking
• Risk Appetite Model highlights positive reaction to ECB rate and policy announcements

• CDX IG currently -3bps at 91.49 in overnight session; iTraxx Asia Ex Japan IG is currently -4.6bps at 141.81

NEWS

• Corporate News
• Samsung Warns of Competition as Investors Vote on Board Changes
• VW Unit MAN SE Reports 2015 EU92m Op. Profit After Sales Drop
• JD Wetherspoon 1H Adj. Pretax Drops, 6-Wk LFL Sales Up 3.7%
• Porsche Said to Weigh Bosch, Panasonic for Tesla-Fighter Battery
• BHP Says Samarco Has Confirmed It’s Seeking Restart Approvals

• Financial News
• Old Mutual to Be Broken Up as CEO Hemphill Chases Growth
• JPMorgan Said to Cut Credit Traders Amid Emerging-Market Swings
• Banks Should Expect Watered-Down EU Cyber-Security Rules Soon

• Rating News
• Moody’s affirms Genworth Australia’s A3 rating; outlook remains Negative
• Negative Rates Put More Pressure on Japanese Banks’ NIM: Fitch
• S&P Affirms Nasdaq ’BBB’ Ratings; Outlook Remains Stable
• N.Z. Banks Face Rising Macro-Economic Pressure, Fitch Says

• Other News
• Asian Stocks Rally With U.S. Futures, Crude Oil as Dollar Falls
• Pimco Increases Government Bond Stake Just in Time for Selloff
• Draghi Can Cut Borrowing Costs, But Can’t Make Companies Borrow
• China Said to Plan New Rules Facilitating Debt-to-Equity Swaps

ANALYST VIEWS

• It is fair to say that the ECB pretty much overdelivered. But oh dear! They have added IG non-financial corporate bonds to the list of assets they can buy under the bond purchase program. Someone has been in the asylum too long: creditmarketdaily.com

NEW ISSUES

• No priced new issues Thursday

• 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.