EM ASIA CREDIT: Baidu: Proposed AI chip spin-off
(BIDU, A3/NR/A)
"*BAIDU: PROPOSED SPINOFF, SEPARATE LISTING OF KUNLUNXIN ON HKEX" - BBG
Possible AI chip IPO, neutral for spreads.
Baidu has submitted a proposal to spin-off its AI chip unit called Kunlunxin via a Hong Kong IPO, in which it currently holds around 60%. The unit is valued around USD3bn according to Bloomberg. Reports of a possible spin-off surfaced early December 2025. According to the filing, Kunlunxin will remain a subsidiary of Baidu, though the size and use of proceeds of the proposed spin-off haven't been finalised as yet. Investment to fund AI chip R&D, and expanding manufacturing and data‑centre capacities are possible. Neutral for spreads.
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AUSSIE BONDS: ACGB Dec-35 Auction Result
The AOFM sells A$1000mn of the 4.25% 21 December 2035 bond:
- Average Yield (%): 4.6320 (prev. 4.3643)
- High Yield (%): 4.6325 (prev. 4.3650)
- Bid/Cover: 2.3550x (prev. 3.4875x)
- Allotted at Highest Accepted Yld as % of Bid at that Yld (%): 100 (prev. 76.1)
- Bidders: 33 (prev. 35), 14 (prev. 10) successful, 14 (prev. 3) allocated in full
AUSSIE BONDS: Dec-35 Supply Faces Higher Yield But Similar Curve
The Australian Office of Financial Management (AOFM) will today sell A$1000mn of the 4.25% 21 December 2035 bond. The line was last sold on 12 November 2025 for A$1200mn. The line was opened via syndication on 24 July 2024 for A$11.5bn. Bidding is likely to be shaped by several key factors:
- The current outright yield is around 30bps higher than at the time of the previous auction and hovering just below the peak in late 2024.
- The 3/10 yield curve is around the same level as the previous auction and sits around 50bps below its recent high.
- On the positive side, the auction comes amid stronger sentiment toward longer-dated global bonds.
- Moreover, the line is included in the XM basket.
- While some factors may limit the overall strength of bidding, there is an expectation of continued firm pricing at today's auction.
- Results are due at 0000 GMT / 1100 AEST.
JGB TECHS: (Z5) Cycle Lows
- RES 3: 140.08 - High Jun 13
- RES 2: 139.05 - High Aug 4
- RES 1: 137.30 - High Sep 8 and key short-term resistance
- PRICE: 134.58 @ 16:30 GMT Dec 02
- SUP 1: 134.38 - Low Dec 01 & Cycle Low
- SUP 2: 134.01 - 3.0% Lower Bollinger Band
- SUP 3: 133.72 - 1.0% 10-dma envelope
Prices traded to new pullback and cycle lows Monday, weighed by building expectations of a December BoJ rate hike and a breach of support in futures prices. This affirms the firm downtrend that’s dominated prices since mid-September, and prices will need to challenge resistance before signaling any broader reversal. Key short-term resistance has been defined at 137.30, the Sep 8 high.
