EM ASIA CREDIT: Contemporary Amperex: rating affirmed, underperforms peer
(CONAMP, A3/A-/NR)
"CATL Affirmed at A- by Fitch" - BBG
Fitch confirmed Contemporary Amperex Technology's rating overnight at A- citing the companies leading position (38% share) in the EV and energy storage market. The company has substantial liquidity, including form the recent HK listing. In terms of risks, the agency references execution risks on overseas expansion.
In terms of valuations, the existing $ 9/30s have gradually moved off the recent tights (z+97bp), and has underperformed lower rated peer LG Energy Solutions (Baa1neg/BBB/-) over the last few weeks. The spread differential currently shows LGENSO $ 4/30s trading 80bp wide of CONAMP $ 9/30s versus 95bp early June.
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MNI: CHINA PBOC CONDUCTS CNY157 BLN VIA 7-DAY REVERSE REPO WEDS
- CHINA PBOC CONDUCTS CNY157 BLN VIA 7-DAY REVERSE REPO WEDS
CHINA: Central Bank Injects CNY65bn via OMO
- The PBOC issued CNY157bn of 7-day reverse repo at 1.4% during this morning’s operations.
- Today’s maturities CNY92bn
- Net liquidity injected CNY65 bn.
- The PBOC monitors and maintains liquidity in the interbank system through the issuance of reverse repo.
- The CFETS Pledged Repo Deposit Institutions 7 Day Weighted is at 1.42%, from yesterday’s close of 1.58%.
- The China overnight interbank repo rate is at 1.52%, from the prior close of 1.40%.
- The China 7-day interbank repo rate is at 1.42%, from the prior close of 1.59%. Today's repo rate of 1.42% is a 1-year low
AUSSIE BONDS: ACGB Dec-35 Supply Digested But Less Demand
Expectations of sustained strong pricing at auctions proved accurate, with the latest round of ACGB Dec-35 supply seeing the weighted average yield print 0.55bp through prevailing mids (per Yieldbroker).
- However, today’s cover ratio fell to 3.1042x from 3.5312x in the previous auction despite a steeper 3/10 curve.
- As noted in our auction preview, demand for duration faced headwinds from weaker sentiment toward longer-dated global bonds.
- Post-auction, the ACGB December 2035 cash line and the XM futures contract both traded slightly cheaper.
