Summary of Covered Companies’ Debt Issuance | 覆盖公司发债概览 3
Offshore RMB Bond Market Overview | 境外人民币债券市场纵览 4
Credit Spread Monitor | 息差监测 5
Monthly Feature | 月度专题 6
Data Monitor | 数据指标监测 8
Key Economic Data for Major Economies | 主要经济体重要经济数据 13
U.S. treasury yield (recent 3M) 美国国债近 3个月收益率走势
0.5
1.0
1.5
2.0
2.5
23-A
pr
28-A
pr
3-M
ay
8-M
ay
13-M
ay
18-M
ay
23-M
ay
28-M
ay
2-J
un
7-J
un
12-J
un
17-J
un
22-J
un
27-J
un
2-J
ul
7-J
ul
12-J
ul
17-J
ul
22-J
ul
(%)
2 year 5 year 10 year
Source: Bloomberg.
China government bond yield (recent 3M) 中国国债近 3个月收益率走势
2.0
2.3
2.5
2.8
3.0
3.3 23-A
pr
28-A
pr
3-M
ay
8-M
ay
13-M
ay
18-M
ay
23-M
ay
28-M
ay
2-J
un
7-J
un
12-J
un
17-J
un
22-J
un
27-J
un
2-J
ul
7-J
ul
12-J
ul
17-J
ul
22-J
ul
(%)1 year 5 year 10 year
Source: Bloomberg.
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Market Updates and Outlook | 市场更新及近期展望
U.S. treasury yields rebounded over the past month as the market digests the Brexit risk. The direction of movement of
U.S. treasury yields was somewhat driven by how well the market digested the Brexit risk. When the result of the referendum
was released on June 24, the treasury yields exhibited a marked decrease for generic 2-year yields, down by 15.2 bps to
0.627%. After the yields tumbled to an all-time low in the first week of July then subsequently rebounded sharply in the second
week, they have struggled for clear direction over the past few sessions with yields switching between gains and declines
nearly every day, albeit within a narrow range. Nevertheless, the treasury market’s realised price volatility hit its highest level
since March 2015. We think that the key near-term price drivers for the treasury market are the movements in risky assets of
equities and currencies. Looking forward, we see that recently released good news about the shape of U.S. economy, such as
the reading of U.S. manufacturing for July, which rose to its best level since October, could continue to send yields into
ascent.
China government bond yields trended down as expected and the bull market stance remains unchanged in 3Q16.
China government bond yields displayed an apparent drop as expected over the past month. As we are entering 3Q of the
year, we see that the China government bond market remains constructive based on the following arguments: 1/ Economic
growth is expected to be sluggish in 3Q. The market consensus suggests a range between 6.6% and 6.8% for the yoy growth
in quarterly GDP, which is perceived by the “L” shaped economic growth trajectory. 2/ Inflation is broadly expected to be tamed
in 3Q. Despite the recent flooding in some regions that is likely to raise the inflation expectation in food, broadly speaking, we
sense that the yoy increase in general price levels in 3Q should be slower than that of in 2Q. Lower inflation expectation, in
theory, should be supportive to low government bond yields. 3/ Rising credit risks in the corporate bond market are likely to
result in a shift of funds to the safer government bond market.
European Central Bank (“the ECB”) leaves interest rates on hold at the latest monetary policy meeting held on July
21. Despite the UK’s unprecedented vote to leave the European Union that could hurt trade in the region and weigh on
business confidence, the ECB decided to hold current policy interest rates across the Eurozone. The hold in interest rates
could be interpreted as a sign that it's too early to tell what the full effect of the vote will be. However, at the press conference,
the ECB’s chief, Mr. Draghi said that the central bank had the "readiness, willingness and ability" to help the Eurozone
economy. We believe that the market is expecting that the probability for an extension of the current stimulus package in
September is increasing. Under the current programme, the ECB buys 80 billion Euros on a monthly basis of newly created
money which is injected into the banking system in the hope that it will increase lending and raise inflation to levels more
consistent with steady growth. On the other hand, the Eurozone government bond market appeared fairly calm after the latest
monetary policy decision. We expect the yields to hover around current levels as the market further digests the Brexit risk.
1-2 year government bond yields in the U.S., China and Eurozone
0.500
0.600
0.700
0.800
0.900
1.000
23-A
pr
3-M
ay
13-M
ay
23-M
ay
2-J
un
12-J
un
22-J
un
2-J
ul
12-J
ul
22-J
ul
(%)U.S. 2yr
2.000
2.125
2.250
2.375
2.500
23-A
pr
3-M
ay
13-M
ay
23-M
ay
2-J
un
12-J
un
22-J
un
2-J
ul
12-J
ul
22-J
ul
(%)China Govt 1yr
(0.750)
(0.700)
(0.650)
(0.600)
(0.550)
(0.500)
(0.450)
(0.400)
23-A
pr
3-M
ay
13-M
ay
23-M
ay
2-J
un
12-J
un
22-J
un
2-J
ul
12-J
ul
22-J
ul
(%) Eurozone 2yr
Source: Bloomberg, Guotai Junan International. Prices as at July 22, 2016.
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Summary of Covered Companies’ Debt Issuance | 覆盖公司发债概览
Stock
Ticker
Company
Name
Sector Issuer
Name
Issue
Date
Debt
Type
Debt
Ticker
Cry Principal
Amount
Duration Maturity
Date
Interest
Rate
Use of
Proceeds
Company's
Debt ratios
Remarks
(in mn) (in % p.a.)
03908 HK CICC Diversified finance China International
Capital Corporation Ltd.
18/7/2016 corporate debt 136555.SH RMB 3,000.0 5 years 18/7/2021 2.990 General working capital FY15: net gearing 101.1% CICC achieved high earnings growth in 2015 and still retains momentum in the
future with its key strengths. Huijin is the Company's major shareholder.
Therefore, default risk is minimal
03908 HK CICC Diversified finance China International
Capital Corporation Ltd.
18/7/2016 corporate debt 135651.SH RMB 1,000.0 7 years 18/7/2023 3.290 General working capital FY15: net gearing 101.1% CICC achieved high earnings growth in 2015 and still retains momentum in the
future with its key strengths. Huijin is the Company's major shareholder.
Therefore, default risk is minimal
03908 HK CICC Diversified finance China International
Capital Corporation Ltd.
20/7/2016 subordinated debt 136554.SH RMB 2,000.0 5 years 20/7/2021 3.250 General working capital FY15: net gearing 101.1% CICC achieved high earnings growth in 2015 and still retains momentum in the
future with its key strengths. Huijin is the Company's major shareholder.
Therefore, default risk is minimal
00548 HK Shenzhen Expressway Toll Roads Shenzhen Expressway
Co. Ld
18/7/2016 Long term Bond 5684.HK USD 300.0 5 years 18/7/2021 2.875 Repayment of Debt and general
corporate purposes
FY15: net gearing 2.5% Default risk minimal, cash flow strong since 1Q16 as Shenzhen government
purchase 3 expressways' use rights
03378 HK Xiamen Port Port Xiamen Port 8/7/2016 Super ST notes 54058 RMB 100.0 90 Days 6/10/2016 2.920 To sustain working capital
requirements and lower financing
costs
FY15: net gearing 35.4% Default risk low, duration period safe
00960 HK Longfor Properties Property Chongqing Longhu
Development
14/7/2016 Corporate Bond 136543 RMB 700.0 5 years 14/7/2021 3.060 To adjust its debt structure and
replenish working capital
FY15: net gearing 61.9% Home sales improvement and financial costs decrease with steady business
model under loosening environment, default risk is minimal
00960 HK Longfor Properties Property Chongqing Longhu
Development
14/7/2016 Corporate Bond 136543 RMB 3,000.0 7 years 14/7/2023 3.680 To adjust its debt structure and
replenish working capital
FY15: net gearing 61.9% Home sales improvement and financial costs decrease with steady business
model under loosening environment, default risk is minimal
00902 HK Huaneng Power Electricity Huaneng Power
International,Inc.
13/6/2016 Corporate bond n.a. RMB 3,000.0 5 years 13/6/2021 3.480 Replenish the working capital and to
replace the matured bank loans so as
to adjust the debt structure, reduce
the financing cost, and enhance
competitiveness
FY15: net gearing 194% The profitability of coal-fired power business is expected to decrease in 2016,
but the Company's balance sheet is still healthy to support the repayment. We
think the default risk is minimal.
00902 HK Huaneng Power Electricity Huaneng Power
International,Inc.
13/6/2016 Corporate bond n.a. RMB 1,200.0 10 years 13/6/2026 3.980 Replenish the working capital and to
replace the matured bank loans so as
to adjust the debt structure, reduce
the financing cost, and enhance
competitiveness
FY15: net gearing 194% The profitability of coal-fired power business is expected to decrease in 2016,
but the Company's balance sheet is still healthy to support the repayment. We
think the default risk is minimal.
00902 HK Huaneng Power Electricity Huaneng Power
International,Inc.
2016/7/15 Ultra Short-term
Debenture
011698090 RMB 4,000.0 270 days 10/4/2017 2.500 Replenish the working capital FY15: net gearing 194% The profitability of coal-fired power business is expected to decrease in 2016,
but the Company's balance sheet is still healthy to support the repayment. We
think the default risk is minimal.
00816 HK Huadian Fuxin Electricity Huadian Fuxin Energy
Corporation Ltd.
2016/7/7 Ultra Short-term
Debenture
011698046 RMB 2,000.0 270 days 2017/4/2 2.760 Replenish the working capital FY15: net gearing 319% The Company's operation cash flow is relatively strong, and the Company's
balance sheet is relatively healthy to support the repayment. We think the
default risk is minimal.
00916 HK China Longyuan Electricity China Longyuan Power
Group Corporation Ltd.
2016/7/18 Ultra Short-term
Debenture
011698091 RMB 2,500.0 180 days 11/1/2017 2.500 Replenish the working capital FY15: net gearing 188% The Company's operation cash flow is relatively strong, and the Company's
balance sheet is relatively healthy to support the repayment. We think the
default risk is minimal.
Source: the Companies, Guotai Junan International.
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Offshore RMB Bond Market Overview | 境外人民币债券市场纵览
Monthly new issues in Dim Sum bonds market amounted to RMB 24.1 billion, showing a notable MoM surge. However,
in terms of the ytd figure, a negative yoy growth of 30.8% was posted, reaching RMB 71.7 billion. In the offshore RMB bond
market (~excluding dim sum bonds), new issues in July dropped slightly on a MoM basis, which amounted to RMB 11.3 billion
(~6.0% MoM drop). Among the new issues in the dim sum bond market in July, the transactions worth highlighting were Bank
of China’s maiden international green bond, splitting between US dollars, Euros and offshore RMB and Chongqing Grain
Group’s RMB 1 billion dim sum bond. Some market watchers believe both transactions were largely politically driven as the
SOE bank, like Bank of China, was keen to internalise the RMB. As for Chongqing Grain, it marked the first RMB denominated
bond since the PBOC and the Monetary Authority of Singapore launched a programme in March this year to allow Chongqing
corporations to issue RMB denominated bonds in Singapore to repatriate the funds in full.
Maturity distribution of outstanding balance of
dim sum bonds, by month in 2016 Maturity distribution of outstanding balance of
dim sum bonds, by year
0.5%
1.4%
1.6%
1.1%
2.8%2.8%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
0
5,000
10,000
15,000
20,000
Ju
l
Aug
Sep
Oc
t
No
v
De
c
(in RMB mn)
Outstanding amount (LHS)
% of total outstanding amount (RHS)
10.2%
32.7%
21.5%
35.6%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
50,000
90,000
130,000
170,000
210,000
2016 2017 2018 2019 and thereafter
(in RMB mn) Outstanding amount (LHS)
% of total outstanding amount (RHS)
Source: Bloomberg, Guotai Junan International. Source: Bloomberg, Guotai Junan International.
Amount outstanding of dim sum bonds
by issue year (2016 represents YTD data) Amount outstanding of Offshore RMB bonds^
by issue year (2016 represents YTD data)
2,200 17,770
22,900
51,834
211,692
155,661
71,667
0
50,000
100,000
150,000
200,000
250,000
2010 2011 2012 2013 2014 2015 2016 YTD
(in RMB mn)
1,362 4,883 3,759
7,405
36,106
92,373
61,592
0
20,000
40,000
60,000
80,000
100,000
120,000
2010 2011 2012 2013 2014 2015 2016 YTD
(in RMB mn)
Source: Bloomberg, Guotai Junan International. Source: Bloomberg, Guotai Junan International.
Note: ^ = Excluding dim sum bonds.
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Credit Spread Monitor | 息差监测
Credit spread slides across investment grades, emerging markets and high yield. Our OAS readings displayed a MoM
decrease across the board on rising U.S. treasury yields. As 2Q16 earnings season for U.S. listed companies will kick off soon,
we believe that the quarterly earnings outlook may have a hint of optimism, which could be support the current narrowing
credit spread. However, the credit rating agency Moody’s issued a fresh warning on July 13 that stagnant energy prices would
likely result in commodity related sectors remaining under severe distress. Speculative-grade U.S. defaults spiked to 5.1% of
the total outstanding in 2Q from 4.4% in 1Q, according to Moody’s Investors Service. The global high-yield default rate could
finish the year at 4.9%, with the U.S. at as much as 6.4% according to Moody’s. Moody’s forecasts the default rate for metals
and mining to be 10.2% and oil and gas to be 8.6% over the next 12 months.
Option-adjusted spread & 1-month change % by sector
USD-denominated bonds, as at July 22, 2016 Credit Spread on U.S. corporate bonds
(2015 to date) (A, BBB, Moody’s BAA and High-yield) (in bps)
(9.9%)
(14.5%)
(11.6%)
(7.5%)
(9.0%)
(12.7%)
(9.3%)
(11.0%)
(8.1%)
(4.8%)
(10.5%)
(8.0%)
(8.1%)
(6.6%)
(8.9%)
(5.8%)
(2.9%)
(10.5%)
(6.8%)
(11.1%)
(3.0%)
(8.6%)
(11.0%)
(9.0%)
(8.8%)
(15.5%)
(3.1%)
(5.0%)
(8.7%)
(9.0%)
(6.4%)
(6.0%)
(12.6%)
(11.8%)
(9.5%)
(11.0%)
1m Chg%
139.6
203.1
103.8
140.0
170.5
116.8
107.6
112.7
197.9
227.1
132.8
115.0
551.4
525.1
437.6
639.9
692.1
483.9
731.2
424.9
412.9
565.9
510.0
483.9
363.5
141.9
329.2
523.9
288.6
413.6
388.5
303.7
412.8
221.5
305.1
431.7
IG total
IG.Energy
IG.Consumer Staples
IG.Utilities
IG.Communication
IG.Health Care
IG.Industrials
IG.Technology
IG.Materials
IG.Financials(Sub)
IG.Consumer Disc.
IG.Financials(Sr)
HY total
HY.Utilities
HY.Consumer Staples
HY.Technology
HY.Industrials
HY.Consumer Disc.
HY.Energy
HY.Financials(Sr)
HY.Financials(Sub)
HY.Communication
HY.Materials
HY.Health Care
EM total
EM.Health Care
EM.Consumer Staples
EM.Industrials
EM.Technology
EM.Energy
EM.Financials(Sub)
EM.Financials(Sr)
EM.Materials
EM.Utilities
EM.Communication
EM.Consumer Disc.
Investm
ent
Gra
de
Hig
h Y
ield
Em
erg
ing
Mark
et
OAS
150
170
190
210
230
250
90
110
130
150
Ja
n-1
5
Fe
b-1
5
Ma
r-15
Ap
r-1
5
Ma
y-1
5
Ju
n-1
5
Ju
l-1
5
Aug
-15
Sep
-15
Oc
t-1
5
No
v-1
5
De
c-1
5
Ja
n-1
6
Fe
b-1
6
Ma
r-16
Ap
r-1
6
Ma
y-1
6
Ju
n-1
6
Ju
l-1
6
CSI A Index (LHS)
CSI BBB Index (RHS)
225
250
275
300
325
350
375
Ja
n-1
5
Fe
b-1
5
Ma
r-1
5
Ap
r-1
5
Ma
y-1
5
Ju
n-1
5
Ju
l-1
5
Au
g-1
5
Se
p-1
5
Oc
t-1
5
No
v-1
5
De
c-1
5
Ja
n-1
6
Fe
b-1
6
Ma
r-1
6
Ap
r-1
6
May
-16
Ju
n-1
6
Ju
l-1
6
BICLB10Y
INDEX
350
450
550
650
750
850
Ja
n-1
5
Feb
-15
Ma
r-1
5
Ap
r-1
5
Ma
y-1
5
Ju
n-1
5
Ju
l-1
5
Au
g-1
5
Se
p-1
5
Oc
t-1
5
No
v-1
5
De
c-1
5
Ja
n-1
6
Fe
b-1
6
Ma
r-1
6
Ap
r-1
6
Ma
y-1
6
Ju
n-1
6
Ju
l-1
6
CSI BARC Index
Source: Bloomberg, Guotai Junan International. Note: emerging market countries include Argentine Republic, Bolivarian Republic of Venezuela, Federation of Malaysia, Federative Republic of Brazil, Republic of Colombia, Republic of Indonesia, Republic of Panama, Republic of Peru, Republic of South Africa, Republic of Turkey, Republic of the Philippines, Russian Federation, Ukraine ,and United Mexican States.
Source: Bloomberg, Guotai Junan International. Note: CSI A Index= US Corp A- Treasury 10 Year Spread CSI BBB Index = US Corp BBB/Baa - Treasury 10 Year Spread BICLB10Y Index = This is the spread between Moody's corporate yields for bonds rated BAA and the US govt 10 year. CSI BARC Index = BarCap US Corp HY YTW - 10 Year Spread
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Monthly Feature | 月度专题
Offshore LGFV Bonds: A Surging Market
We expect the offshore LGFV bond market to expand in the near term on political play and the expected persistent
demand for USD denominated assets. Our compiled data shows that the offshore LGFV bond market is experiencing rapid
development. USD 9.3 billion worth of LGFV bonds were issued offshore in 2015 compared to just one third of this amount in
2014 (~USD 3.1 billion). In comparison with the much larger onshore LGFV bond market (~approximately USD 460 billion in
outstanding balance), we have the following observations: 1/ If we neglect currency risk, the cost of issuance could be
cheaper offshore as the average coupon rate is lower for offshore LGFV bonds, although the differential in average coupon
rate is narrowing in 2016. 2/ LGFVs that are located in economically developed coastal provinces are the main issuers in the
offshore LGFV bond market. 3/ Investors tend to enjoy the liquidity premiums on offshore LGFV bonds, which could have a
much longer maturity period than onshore LGFV bonds. As an attempt to explain this recent surge in issue value, we conclude
the following possible causes: 1/ LGFVs may have increasing financing needs for their overseas investments. 2/ LGFVs are
attempting to improve and optimise its debt financing mix as raising funds offshore could be regarded as an initiative to widen
their financing channels. 3/ LGFVs are facing increasing administrative constraints to raise debts onshore. Looking at the near
term, we expect the offshore LGFV bond market to continue to expand on political play, meaning LGFVs could improve their
corporate image through offshore fundraising. In addition, the persistent demand for USD denominated assets will bolster the
expectation of this market amid increasing risk aversion that currently characterises the global investment climate.
Onshore LGFV bonds annual issues and
Average coupon rate at issue Onshore LGFV bonds Yield to Maturity
(AA+)
3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
6.5%
7.0%
7.5%
0
200
400
600
800
1,000
1,200
1,400
1,600
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
(in RMB bn)
Volume (LHS)
Average coupon rate (RHS)
2.0
3.0
4.0
5.0
6.0
7.0
8.0
Jan
-12
Apr-
12
Jul-
12
Oct-
12
Jan
-13
Apr-
13
Jul-
13
Oct-
13
Jan
-14
Apr-
14
Jul-
14
Oct-
14
Jan
-15
Apr-
15
Jul-
15
Oct-
15
Jan
-16
Apr-
16
Jul-
16
(%)
1 year
5 year
10 year
Source: WIND.
Note: Year 2016 represents year-to-date data.
Source: WIND.
Onshore LGFV bonds annual issues
and annual completed FAI yoy growth Offshore LGFV bonds annual issuance
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
0
200
400
600
800
1,000
1,200
1,400
1,600
2008
2009
2010
2011
2012
2013
2014
2015
(in RMB bn)Volume (LHS)
Annual completed FAI yoy (RHS)
2.1
1.7
1.0
3.1
9.3
0.0
2.0
4.0
6.0
8.0
10.0
20
11
20
12
20
13
20
14
20
15
(in USD bn)
Source: WIND, National Bureau of Statistics of China. Source: Bloomberg.
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Average coupon rate on LGFV bonds Maturity distribution comparison for the LGFV bonds
issued in 2015
3.0
4.0
5.0
6.0
7.0
8.0
9.0
2011
2012
2013
2014
2015
2016
Onshore Offshore
0.0%
81.7%
10.7%7.5%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
<1 year 1-5 year 5-10 year > 10 year
Onshore Offshore
Source: Bloomberg. Note: Year 2016 represents year-to-date data.
Source: Bloomberg.
Recent offshore LGFV bonds issues Issuer name
Amount outstanding (in USD mn)
Issue currency
Coupon rate (%)
Issue Date
Maturity date
Mega Advance Investments Ltd 600 USD 5.00 May-11 May-21
Mega Advance Investments Ltd 400 USD 6.38 May-11 May-41
Mega Advance Investments Ltd 600 USD 5.00 May-11 May-21
Mega Advance Investments Ltd 400 USD 6.38 May-11 May-41
Xuzhou Economic Technology Development Zone 300 USD 4.50 Jun-16 Jun-19
Hanrui Overseas Investment Co Ltd 300 USD 4.90 Jun-16 Jun-19
Caiyun International Investment Ltd 500 USD 3.13 Jul-16 Jul-19
Source: Bloomberg.
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Data Monitor | 数据指标监测
New issuance in Hong Kong within the past 1-month period, as at July 22, 2016 Date Issuer Coupon Maturity $ Outstanding amount
(in local $ million, except B) Industry subgroup
7/21 Eisa Holding Co ZERO 10/28/2016 USD 10.00 Commer Banks Non-US 7/20 Eisa Holding Co WI 7/22/2021 CNY 2B Diversified Finan Serv 7/20 Dah Sing Bank VAR 7/22/2021 CNY 2B Diversified Finan Serv 7/20 Hong & Shan Bank 2.88 7/27/2046 USD 30.00 Transport-Rail 7/20 Chong Hing Bank ZERO 10/27/2016 USD 10.00 Commer Banks Non-US 7/20 Bk Of East Asia 1.02 10/27/2016 USD 50.00 Commer Banks Non-US 7/20 Hong Kong T-Bill ZERO 7/27/2017 USD 35.00 Commer Banks Non-US 7/20 Hong Kong T-Bill 0.92 10/27/2016 USD 29.70 Commer Banks Non-US 7/20 Bk Of East Asia 1.00 11/22/2016 USD 20.00 Money Center Banks 7/19 Hk Mtge Corp ZERO 10/19/2016 HKD 48.75B Sovereign 7/19 Boci Finl Prod ZERO 1/18/2017 HKD 17B Sovereign 7/19 Bk East Asia/Sg ZERO 1/20/2017 HKD 1.14B Commer Banks Non-US 7/19 Citic Ltd 1.10 4/26/2017 HKD 370.00 Commer Banks Non-US 7/19 Citic Ltd 1.26 7/26/2017 USD 80.00 Commer Banks Non-US 7/19 China Gas Hldgs 1.28 7/25/2017 USD 50.00 Commer Banks Non-US 7/19 Hna Group Intl 2.59 7/17/2026 HKD 140.00 Diversified Operations 7/18 Hna Group Intl ZERO 1/25/2017 HKD 17B Sovereign 7/18 Bk Of East Asia ZERO 10/26/2016 HKD 45.72B Sovereign 7/18 Hk Mtge Corp ZERO 10/25/2016 HKD 100.00 Commer Banks Non-US 7/18 United Photovol 1.90 7/25/2019 HKD 100.00 Commer Banks Non-US 7/17 Bk Of East Asia 2.32 7/26/2026 HKD 300.00 Real Estate Oper/Develop 7/15 Bk Of East Asia ZERO 1/23/2017 HKD 200.00 Commer Banks Non-US 7/15 Fubon Bank Hk ZERO 10/19/2016 HKD 500.00 Commer Banks Non-US 7/15 Hk Govt Bond Pro ZERO 12/19/2016 USD 10.00 Money Center Banks 7/15 Everbright Bk/Hk FRN 7/25/2018 HKD 100.00 Commer Banks Non-US 7/14 Fubon Bank Hk VAR PERPETUAL USD 1,000.00 Commer Banks Non-US 7/14 Hong Kong T-Bill 2.88 7/21/2026 USD 500.00 REITS-Shopping Centers 7/14 Hong Kong T-Bill 10.00 5/8/2018 HKD 100.00 Containers-Paper/Plastic 7/14 Hong Kong T-Bill 3.80 7/21/2019 USD 210.00 Internet Content-Info/Ne 7/14 Hong Kong T-Bill ZERO 7/14/2017 USD 30.00 Commer Banks Non-US 7/13 Hong Kong T-Bill 3.88 7/20/2021 USD 350.00 Special Purpose Entity 7/13 Everbright Bk/Hk 0.72 7/20/2017 USD 30.00 Commer Banks Non-US 7/12 Meinhardt Gro In 2.60 7/21/2028 HKD 300.00 Diversified Operations 7/12 Hkbn Ltd ZERO 10/12/2016 HKD 46.96B Sovereign 7/12 Meinhardt Gro In ZERO 7/12/2017 HKD 5B Sovereign 7/12 Meinhardt Gro In ZERO 1/11/2017 HKD 18B Sovereign 7/12 Meinhardt Gro In ZERO 10/14/2016 HKD 450.00 Commer Banks Non-US 7/12 Meinhardt Gro In 2.25 7/22/2026 HKD 364.00 Gas-Distribution 7/11 Hkcg Finance 0.48 10/18/2016 HKD 150.00 Money Center Banks 7/8 Future Days 3.58 7/13/2021 CNY 500.00 Transport-Services 7/8 Bk Of East Asia 3.12 7/13/2019 CNY 1,000.00 Transport-Services 7/8 Icbc Asia Ltd 2.62 7/15/2019 USD 350.00 Finance-Leasing Compan 7/8 Sun Hung Kai Pro 3.20 7/15/2021 USD 100.00 Finance-Leasing Compan 7/7 Natixis/Hk 3.00 7/14/2026 USD 750.00 Telecom Services 7/6 Orient Zhihui Lt 1.12 7/14/2017 HKD 110.00 Commer Banks Non-US 7/6 Bk Of East Asia 1.68 1/21/2026 HKD 2.2B Sovereign 7/5 Hk Mtge Corp VAR 7/1/2019 CNY 3B Diversified Operations 7/5 Bk Of East Asia ZERO 1/4/2017 HKD 15B Sovereign 7/5 Dah Sing Bank ZERO 10/5/2016 HKD 46.38B Sovereign 7/5 Fubon Bank Hk 3.13 7/12/2019 USD 500.00 Investment Companies 7/4 Icbc Asia Ltd ZERO 10/12/2016 HKD 110.00 Money Center Banks 6/30 Mapletree Greate ZERO 7/11/2017 USD 20.00 Commer Banks Non-US 6/30 Hk Mtge Corp ZERO 7/11/2017 USD 30.00 Commer Banks Non-US 6/30 Sun Hung Kai Pro 3.20 7/8/2021 USD 50.00 Special Purpose Entity 6/29 Hong Kong T-Bill 4.20 7/8/2026 HKD 500.00 Special Purpose Entity 6/29 Hong Kong T-Bill 1.20 4/7/2017 USD 100.00 Commer Banks Non-US 6/29 Ckh Fin 16 1.10 7/10/2017 USD 100.00 Commer Banks Non-US 6/29 Ckh Fin 16 4.00 7/8/2026 HKD 320.00 Special Purpose Entity 6/29 Sun Hung Kai Pro 4.20 7/13/2026 HKD 400.00 Special Purpose Entity 6/29 Hk Mtge Corp 2.15 10/5/2016 USD 30.00 Invest Mgmnt/Advis Serv 6/29 Hk Electric Fin 0.59 1/6/2017 USD 10.00 Commer Banks Non-US 6/29 Guotai Junan Int 3.20 7/7/2021 USD 80.00 Special Purpose Entity 6/29 Hong & Shan Bank 1.30 7/7/2017 USD 100.00 Commer Banks Non-US 6/28 United Asia Fina 1.10 4/6/2017 USD 100.00 Commer Banks Non-US 6/28 New World Financ STEP 6/29/2018 HKD 50.00 Finance-Invest Bnkr/Brkr 6/28 Shangri-La Asia ZERO 9/28/2016 HKD 32.46B Sovereign 6/27 Shangri-La Asia 1.20 4/6/2017 USD 100.00 Commer Banks Non-US 6/26 Hpht Finance Ltd 1.23 9/30/2016 USD 100.00 Commer Banks Non-US 6/24 Hpht Finance Ltd ZERO 4/5/2017 USD 100.00 Commer Banks Non-US 6/23 Hpht Finance Ltd 1.10 9/30/2016 USD 10.00 Commer Banks Non-US 6/23 Hpht Finance Ltd ZERO 9/30/2016 USD 145.00 Money Center Banks 6/22 Hpht Finance Ltd 1.20 12/29/2016 USD 30.00 Commer Banks Non-US 6/22 Hpht Finance Ltd 0.50 9/29/2016 HKD 200.00 Commer Banks Non-US 6/22 Hpht Finance Ltd 0.66 12/29/2016 USD 20.00 Commer Banks Non-US 6/21 Hpht Finance Ltd 1.21 9/29/2016 USD 20.00 Commer Banks Non-US 6/21 Hpht Finance Ltd 1.15 9/29/2016 USD 20.00 Commer Banks Non-US 6/21 Hpht Finance Ltd 1.40 6/22/2017 USD 10.00 Commer Banks Non-US 6/21 Hpht Finance Ltd ZERO 12/21/2016 HKD 9B Sovereign 6/21 Hpht Finance Ltd ZERO 9/21/2016 HKD 33.34B Sovereign 6/21 Hpht Finance Ltd 3.20 7/5/2021 USD 50.00 Special Purpose Entity 6/21 Hpht Finance Ltd ZERO 6/28/2017 USD 80.00 Commer Banks Non-US 6/20 Hpht Finance Ltd 3.20 6/27/2021 USD 200.00 Special Purpose Entity
Source: Bloomberg. Note1: Outstanding amount with “B” means billion. Note2: Issues here include new bonds but excludes certificates of deposits in Hong Kong.
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Selected bond market indexes
Developed market:
U.S. bond index Developed market:
U.S. bond index (3M period)
100
110
120
130
140
150
160
170
2010 2011 2012 2013 2014 2015 2016
U.S. sovereign
U.S. corporate / Investment Grade
U.S. corporate / High yield
150
155
160
165
120
125
130
135
140
145
150
23-A
pr
28-A
pr
3-M
ay
8-M
ay
13-M
ay
18-M
ay
23-M
ay
28-M
ay
2-J
un
7-J
un
12-J
un
17-J
un
22-J
un
27-J
un
2-J
ul
7-J
ul
12-J
ul
17-J
ul
22-J
ul
U.S. sovereign (LHS)
U.S. corporate / Investment Grade (LHS)
U.S. corporate / High yield (RHS)
Source: Bloomberg. Source: Bloomberg.
Developed market:
Eurozone bond index Developed market:
Eurozone bond index (3M period)
95
105
115
125
135
145
155
165
175
2010 2011 2012 2013 2014 2015 2016
Eurozone sovereign
Eurozone corporate / Investment Grade
Eurozone corporate / High yield
160
162
164
166
168
170
133
135
137
139
141
143
145
147
23-A
pr
28-A
pr
3-M
ay
8-M
ay
13-M
ay
18-M
ay
23-M
ay
28-M
ay
2-J
un
7-J
un
12-J
un
17-J
un
22-J
un
27-J
un
2-J
ul
7-J
ul
12-J
ul
17-J
ul
22-J
ul
Eurozone sovereign (LHS)
Eurozone corporate / Investment Grade (LHS)
Eurozone corporate / High yield (RHS)
Source: Bloomberg. Source: Bloomberg.
Developed markets:
Japan and Hong Kong bond index Developed markets:
Japan and Hong Kong bond index (3M period)
97
102
107
112
117
122
99
101
103
105
107
109
111
2010 2011 2012 2013 2014 2015 2016
Japan corporate / Investment grade in yen (LHS)
Hong Kong sovereign (RHS)
114.0
114.5
115.0
115.5
116.0
116.5
117.0
109.0
109.2
109.4
109.6
109.8
110.0
110.2
23-A
pr
28-A
pr
3-M
ay
8-M
ay
13-M
ay
18-M
ay
23-M
ay
28-M
ay
2-J
un
7-J
un
12-J
un
17-J
un
22-J
un
27-J
un
2-J
ul
7-J
ul
12-J
ul
17-J
ul
22-J
ul
Japan corporate / Investment grade in yen (LHS)
Hong Kong sovereign (RHS)
Source: Bloomberg. Source: Bloomberg. Notes on bond indexes: Corporate bond indexes: The USD index includes USD-denominated securities with a minimum par amount of 250 million that are publicly issued by U.S. and non-U.S. corporate issuers. The EUR Index includes securities with a minimum par amount of 250 million that are publicly issued in the European bond market
and denominated in EUR. JPY Index includes securities with a minimum par amount of 20,000 MM and is publicly issued in the Japanese bond market.
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Emerging markets: sovereign and corporate bond indexes
Emerging markets: sovereign and corporate bond indexes (3M period)
95
105
115
125
135
145
155
165
175
2010 2011 2012 2013 2014 2015 2016
Emerging markets sovereign bond Emerging markets corporate bond
144
147
150
153
156
159
162
165
23-A
pr
28-A
pr
3-M
ay
8-M
ay
13-M
ay
18-M
ay
23-M
ay
28-M
ay
2-J
un
7-J
un
12-J
un
17-J
un
22-J
un
27-J
un
2-J
ul
7-J
ul
12-J
ul
17-J
ul
22-J
ul
Emerging markets sovereign bond Emerging markets corporate bond
Source: Bloomberg. Source: Bloomberg.
China bond index: government bond China bond index: generic corporate bond
120
121
122
123
124
125
126
127
Jul-15
Aug-1
5
Sep-1
5
Oct-
15
Nov-1
5
Dec-1
5
Jan-1
6
Feb-1
6
Mar-
16
Apr-
16
May-1
6
Jun-1
6
Jul-16
China government bond index
145
148
150
153
155
158
160
163
165 Jul-15
Aug-1
5
Sep-1
5
Oct-
15
Nov-1
5
Dec-1
5
Jan-1
6
Feb-1
6
Mar-
16
Apr-
16
May-1
6
Jun-1
6
Jul-16
Generic corporate bond total return
Source: Bloomberg. Source: Bloomberg.
China bond index: high grade corporate bond China bond index: high-yield corporate bond
152
155
157
160
162
165
167
170
Jul-15
Aug-1
5
Sep-1
5
Oct-
15
Nov-1
5
Dec-1
5
Jan-1
6
Feb-1
6
Mar-
16
Apr-
16
May-1
6
Jun-1
6
Jul-16
High grade corporate total return
163
166
168
171
173
176
178
Jul-15
Aug-1
5
Sep-1
5
Oct-
15
Nov-1
5
Dec-1
5
Jan-1
6
Feb-1
6
Mar-
16
Apr-
16
May-1
6
Jun-1
6
Jul-16
High yield corporate total return
Source: Bloomberg. Source: Bloomberg.
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Interest rate monitor
U.S. treasury yield curve
(As at July 22, 2016) China government bond yield curve
(As at July 22, 2016)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1M
3M
6M 1Y
2Y
3Y
5Y
7Y
10Y
30Y
(%)
22-Jul-16
1M Ago
2.0
2.4
2.8
3.2
3.6
4.0
1Y
2Y
3Y
4Y
5Y
6Y
7Y
8Y
9Y
10Y
15Y
20Y
30Y
(%)
22-Jul-16 1 week ago
1M ago 3M ago
Source: Bloomberg. Source: Bloomberg.
U.S. treasury note yield (Year 2008 to present) U.S. treasury note yield (3M period)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
2008 2009 2010 2011 2012 2013 2014 2015 2016
(%)
2 year 5 year 10 year
0.5
1.0
1.5
2.0
2.5
23-A
pr
28-A
pr
3-M
ay
8-M
ay
13-M
ay
18-M
ay
23-M
ay
28-M
ay
2-J
un
7-J
un
12-J
un
17-J
un
22-J
un
27-J
un
2-J
ul
7-J
ul
12-J
ul
17-J
ul
22-J
ul
(%)
2 year 5 year 10 year
Source: Bloomberg. Source: Bloomberg.
China government bond yield (Year 2008 to present) China government bond yield (3M period)
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
2008 2009 2010 2011 2012 2013 2014 2015 2016
(%)
1 year 5 year 10 year
2.0
2.3
2.5
2.8
3.0
3.3
23-A
pr
28-A
pr
3-M
ay
8-M
ay
13-M
ay
18-M
ay
23-M
ay
28-M
ay
2-J
un
7-J
un
12-J
un
17-J
un
22-J
un
27-J
un
2-J
ul
7-J
ul
12-J
ul
17-J
ul
22-J
ul
(%)1 year 5 year 10 year
Source: Bloomberg. Source: Bloomberg.
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China money market rate: SHIBOR (Year 2009 to present)
China money market rate: SHIBOR (3M period)
0.5
2.5
4.5
6.5
8.5
10.5
2009 2010 2011 2012 2013 2014 2015 2016
(%)
7D 1M 3M
2.2
2.5
2.8
3.1
23-A
pr
28-A
pr
3-M
ay
8-M
ay
13-M
ay
18-M
ay
23-M
ay
28-M
ay
2-J
un
7-J
un
12-J
un
17-J
un
22-J
un
27-J
un
2-J
ul
7-J
ul
12-J
ul
17-J
ul
22-J
ul
(%)
7D 1M 3M
Source: Bloomberg. Source: Bloomberg.
Turnover and scale monitor on HKMA’s Central Moneymarkets Unit (CMU)
Turnover of all CMU Issues in the secondary market (all currencies)
Turnover of all CMU Issues in the secondary market by currency (HKD equivalent)
(100.0%)
(50.0%)
0.0%
50.0%
100.0%
150.0%
200.0%
50,000
75,000
100,000
125,000
150,000
175,000
200,000
Ju
n-1
3
Au
g-1
3
Oct-
13
De
c-1
3
Fe
b-1
4
Ap
r-1
4
Ju
n-1
4
Au
g-1
4
Oct-
14
De
c-1
4
Fe
b-1
5
Ap
r-1
5
Ju
n-1
5
Au
g-1
5
Oct-
15
De
c-1
5
Fe
b-1
6
Ap
r-1
6
Ju
n-1
6
HKD mn Amount (LHS) yoy (RHS)
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
Ju
n-1
3
Au
g-1
3
Oct-
13
De
c-1
3
Fe
b-1
4
Ap
r-1
4
Ju
n-1
4
Au
g-1
4
Oct-
14
De
c-1
4
Fe
b-1
5
Ap
r-1
5
Ju
n-1
5
Au
g-1
5
Oct-
15
De
c-1
5
Fe
b-1
6
Ap
r-1
6
Ju
n-1
6
Other foreign currency USD RMB HKD
Source: Hong Kong Monetary Authority, Guotai Junan International. Source: Hong Kong Monetary Authority, Guotai Junan International.
Outstanding amount of all CMU Issues (all currencies)
Outstanding amount of all CMU Issues by currency (HKD equivalent)
(20.0%)
(10.0%)
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
800,000
850,000
900,000
950,000
1,000,000
1,050,000
Ju
n-1
3
Au
g-1
3
Oct-
13
De
c-1
3
Fe
b-1
4
Ap
r-1
4
Ju
n-1
4
Au
g-1
4
Oct-
14
De
c-1
4
Fe
b-1
5
Ap
r-1
5
Ju
n-1
5
Au
g-1
5
Oct-
15
De
c-1
5
Fe
b-1
6
Ap
r-1
6
Ju
n-1
6
HKD mnAmount (LHS) yoy (RHS)
0%
20%
40%
60%
80%
100%
Ju
n-1
3
Au
g-1
3
Oct-
13
De
c-1
3
Fe
b-1
4
Ap
r-1
4
Ju
n-1
4
Au
g-1
4
Oct-
14
De
c-1
4
Fe
b-1
5
Ap
r-1
5
Ju
n-1
5
Au
g-1
5
Oct-
15
De
c-1
5
Fe
b-1
6
Ap
r-1
6
Ju
n-1
6Other foreign currency USD RMB HKD
Source: Hong Kong Monetary Authority, Guotai Junan International. Source: Hong Kong Monetary Authority, Guotai Junan International.
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Key Economic Data for Major Economies | 主要经济体重要经济数据
Recently Published Key Economic Data for China, U.S. and Eurozone Economy Indicator Data
Period Current value mom / qoq yoy Market
consensus
China China Official Manufacturing PMI Jun-16 50.0 (0.1ppts) (0.2ppts) 50.0
China Exports (bn USD) Jun-16 180.4 (0.4%) (4.8%) n.a.
China Imports (bn USD) Jun-16 132.3 0.9% (8.4%) n.a.
China Trade Balance (bn USD) Jun-16 48.1 (3.7%) 6.6% 45.7
Eurozone Euro-zone PPI yoy Jun-16 (1.4%) 0.4ppts 0.3ppts n.a.
Source: China Customs, the People's Bank of China, National Bureau of Statistics of China, U.S. Bureau of Labor Statistics, U.S. Department of Commerce, U.S. Labor department, Euro Stat.
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Company Rating Definition
The Benchmark: Hong Kong Hang Seng Index
Time Horizon: 6 to 18 months
Rating Definition
Buy Relative Performance >15%; or the fundamental outlook of the company or sector is favorable.
Accumulate Relative Performance is 5% to 15%; or the fundamental outlook of the company or sector is favorable.
Neutral Relative Performance is -5% to 5%; or the fundamental outlook of the company or sector is neutral.
Reduce Relative Performance is -5% to -15%; or the fundamental outlook of the company or sector is unfavorable.
Sell Relative Performance <-15%; or the fundamental outlook of the company or sector is unfavorable.
Sector Rating Definition
The Benchmark: Hong Kong Hang Seng Index
Time Horizon: 6 to 18 months
Rating Definition
Outperform Relative Performance >5%; or the fundamental outlook of the sector is favorable.
Neutral Relative Performance is -5% to 5%; or the fundamental outlook of the sector is neutral.
Underperform Relative Performance <-5%; or the fundamental outlook of the sector is unfavorable.
DISCLOSURE OF INTERESTS
(1) Except for Shenzhen International Holdings Limited (00152 HK), the Analysts and their associates do not serve as an officer of the issuer mentioned in this Research Report.
(2) The Analysts and their associates do not have any financial interests in relation to the issuer mentioned in this Research Report. (3) Except for SMI Holdings Group Limited (00198 HK), China All Access (Holdings) Limited (00633 HK), Sundart Holdings Limited (01568
HK), Guotai Junan International Holdings Limited (01788 HK), Binhai Investment Company Limited (02886 HK) and Link Holdings Limited (08237 HK), Guotai Junan and its group companies do not hold equal to or more than 1% of the market capitalization of the issuer mentioned in this Research Report.
(4) Guotai Junan and its group companies have had investment banking relationships with China Dredging Environment Protection (00871 HK), AviChina Industry & Technology- H shares (02357 HK), China Power (02380 HK), Sinotruk (03808 HK), Xiao Nan Guo Restaurants (03666 HK), China Aoyuan Property (03883 HK), SMI Holdings Group (00198 HK), Anhui Conch Cement- H shares (00914 HK), Chanjet Information Technology- H shares (01588 HK), Tianyun International (06836 HK), China U-Ton (06168 HK), Huaneng Power- H shares (00902 HK), Shanghai Electric- H shares (02727 HK), China Wood Optimization (08099 HK), 361 Degrees (01361 HK), CECEP COSTIN New Materials (02228 HK), Powerlong Real Estate (01238 HK), Huishang Bank- H shares (03698 HK), Bosideng (03998 HK), WH Group (00288 HK), China All Access (00633 HK), and Huaneng Renewables- H shares (00958 HK) mentioned in this Research Report within the preceding 12 months.
