Economic Data - U.S. retail sales increased by +0.6% month-over-month in November, surpassing expectations of +0.5% [1] - Core retail sales, excluding motor vehicles and parts, grew by +0.5% month-over-month, exceeding expectations of +0.4% [1] - The U.S. producer price index (PPI) for final demand rose by +3.0% year-over-year in November, stronger than the expected +2.7% [1] - Core PPI also increased by +3.0% year-over-year, above the anticipated +2.7% [1] - December existing home sales rose by +5.1% month-over-month to 4.35 million, higher than the expected 4.21 million [1] Stock Market Performance - Wall Street's three main equity benchmarks closed lower, with notable declines in the Magnificent Seven stocks, including Amazon.com (AMZN) and Meta Platforms (META) dropping over -2% [2] - Chip stocks also fell, with Broadcom (AVGO) down more than -4% and Arm Holdings (ARM) dropping over -2% [2] - Wells Fargo (WFC) sank more than -4% after reporting weaker-than-expected Q4 net interest income [2] - On a positive note, Mosaic (MOS) climbed over +5% after Morgan Stanley raised its price target on the stock [2] Corporate Earnings and Forecasts - Taiwan Semiconductor Manufacturing Co. (TSM) shares jumped over +5% in pre-market trading after reporting a record Q4 profit and projecting faster-than-expected revenue growth for 2026 [4][19] - TSMC's capital expenditure forecast for this year is set at $52 billion to $56 billion, significantly higher than the $40.9 billion capex for 2025 [4] - AI-related stocks advanced in pre-market trading, with Broadcom (AVGO) rising over +2% and Nvidia (NVDA) gaining more than +1% [20] - Companies in the S&P 500 are expected to post an average +8.4% increase in quarterly earnings for Q4 compared to the previous year [9] Economic Outlook and Federal Reserve - Federal Reserve officials indicated that the U.S. economy is showing resilience, with no immediate impetus for interest rate cuts [6] - The Fed's Beige Book reported that U.S. economic activity picked up at a "slight to modest pace" in most districts since mid-November [7] - U.S. rate futures indicate a 95.0% chance of no rate change at the upcoming Fed meeting [8] International Market Developments - The Euro Stoxx 50 Index rose +0.52%, reaching a new record high, driven by positive corporate earnings and economic data [13] - The U.K. economy grew more than expected in November, with GDP rising +0.3% month-over-month and +1.4% year-over-year [14] - Eurozone's November industrial production rose +0.7% month-over-month and +2.5% year-over-year, exceeding expectations [15]

Report Industry Investment Rating - Not provided in the given content Core Viewpoints - Asian fixed - rate IG credits tightened by 1 - 4bps this morning. Some bonds like VLLPM 29 were down, while PMBROV 30 recovered [3] - The FV of the new SUNHKC 29 is expected to be mid - 6% compared to an IPT of 6.75% [3][7] - Yuexiu REIT is gauging investor interest in USD/CNH bonds to refinance USD400mn YXREIT 2.65 02/02/26 [3][17] Summary by Directory Trading Desk Comments - Yesterday, new POHANG 31 - 36s/SKBTAM 29 tightened 3 - 5bps due to buying from Chinese onshore accounts, and new CSILTD Float 31 widened 1bp. Chinese IG credits tightened 1 - 3bps overall, with strong buying in beta names. Some bonds like EHICAR 26 - 27 were down, while NWDEVL/VDNWDL complex rose [2] - In Chinese properties, VNKRLE 27 - 29 were down, and Vanke proposed revised terms for its onshore bond. FUTLAN 28/FTLNHD 26 - 27 had mixed performance [2] - In JP space, SUMIBK/MUFG 5yr FRNs tightened. In SE Asia, BBLTB subs tightened, and GARUDA 31s surged. In the Middle East, FABUH 31s had block - size trading but closed unchanged. In AU space, CRNAU 29/PMBROV 30 were down [2] Macro News Recap - On Wednesday, S&P (-0.19%), Dow (-0.80%), and Nasdaq (-0.10%) were lower. US approved Nvidia H200 chip exports to China with conditions. UST yield was lower, with 2/5/10/30 - year yield at 3.53%/3.75%/4.18%/4.83% [6] Desk Analyst Comments - Sun Hung Kai proposes to issue a 3yr USD senior unsecured bond. The FV of the new SUNHKC 29 is seen as mid - 6% vs IPT at 6.75%, considering peer valuation and tenor differential [7] - Proceeds from the new issue will fund a tender offer for SUNHKC 5 09/07/26 and for general working capital. The tender price is at par, and SHK may prioritize allocation to tendering bondholders. Tender offer settlement depends on new bond issue settlement [8] - SHK is 74.6% - owned by Allied Group and ultimately by Lee and Lee Trust. It has businesses in credit, investment management, and fund management. In 1H25, it had a 43.5% yoy income increase, with credit and fund management contributing 62% of total income [9] - In 1H25, pre - tax profit increased, ROE rose, and leverage metrics improved. As of Jun'25, it had cash of HKD2.8bn and total debts of HKD11.0bn, with 52% due within one year [10] Offshore Asia New Issues - No offshore Asia new issues were priced today [14] - ANZ New Zealand (Int'l) London Branch and Sun Hung Kai are in the pipeline for new issues, with ANZ having 3yr/5yr options and Sun Hung Kai a 3yr bond at 6.75% [15] News and Market Color - Yesterday, 112 onshore credit bonds were issued with an amount of RMB107bn. Month - to - date, 645 credit bonds were issued, raising RMB517bn, a 20.3% yoy decrease [16] - Biocon's INR41.5bn QIP attracted 4x demand. CAS accepted USD580.629mn of CASHLD 4 Perp in a tender offer. Piramal Finance raised USD350mn. SJM accepted USD170.115mn of SJMHOL 4.5 01/27/2026 in a tender offer [16] - Vanke proposed revised terms for an onshore bond extension, and Yuexiu REIT is gauging investor interest in bonds for refinancing [16][17] Top Performers and Underperformers - Top performers include NWDEVL and GARUDA bonds with significant price increases, while top underperformers like CRNAU, ARAMCO, and PMBROV bonds had price drops [4]

Report Industry Investment Rating - No information provided on the industry investment rating Core Viewpoints - Asia IG names were unchanged to 2bps tighter in the morning, with flows favoring higher - yielding issues in greater Asia and LGFV spaces [3] - Macau's gaming industry had solid GGR growth in 2025, and the 2026 target seems conservative [6] - China's PMI signaled a temporary improvement, with expected GDP growth decline from 5% in 2025 to 4.8% in 2026, and potential policy stimulus [3][10][11][15] Summary by Related Catalogs Trading Desk Comments - ARAMCO 35s tightened 1bp, FABUH 30 widened 5bps last Friday [2] - Chinese IG names had spreads changes of 5bps tighter to 4bps wider, NWDEVL Perps rose 0.2 - 1.9pts, VDNWDL 9 Perp increased by 1.4pts [2] - The buy recommendation on NWDEVL 5.25 Perp and NWDEVL 8.675 02/06/28 was changed to neutral, and a buy on VDNWDL 9 Perp was initiated [2] - Lai Sun Development's Chairman made a profit of USD11.3mn from trading LASUDE 26, and LASUDE 26 was up by 0.8pt [2] - Various bonds in different regions and industries had price and spread changes, such as Macau gaming, Chinese properties, JP, and SE Asia [2] Last Trading Day's Top Movers - Top performers included VLLPM 9 3/8 07/29/29 with a 3.3 price change, NWDEVL 5 1/4 PERP with a 1.9 change [4] - Top underperformers included FTLNHD 11.88 09/30/27 with a - 0.9 change, COSL 2 1/2 06/24/30 with a - 0.9 change [4] Macro News Recap - S&P (+0.19%), Dow (+0.66%) and Nasdaq (-0.03%) were mixed last Friday, and Trump made a statement about Venezuela [5] - 5/10/30 year UST yield was higher, with 2/5/10/30 year yield at 3.47%/3.74%/4.19%/4.86% [5] Desk Analyst Comments - Macau Gaming - Macau's GGR in Dec'25 increased 14.8% yoy to MOP20.9bn, and cumulatively in 2025, it increased 9.1% to MOP247.4bn, 84.6% of 2019 level [6] - In 2025, tourist arrival was 40.1mn, up 15% yoy and exceeding the 2019 record [6] - Macau government's 2026 GGR target of MOP236bn seems conservative [6] - MPELs and STCITYs are top picks, WYNMAC'27 and '29 are yield - pick - up plays, and neutral on MGMCHIs, SANLTDs, and SJMHOLs [7] Desk Analyst Comments - China Economy - China's manufacturing PMI rebounded in December but recovery was fragile due to seasonality [10][11][12] - Demand improved with new orders expanding and export orders approaching expansion, deflation pressure eased [10][11][12] - Service PMI remained in contraction, construction PMI rebounded [11][13] - Growth is expected to be under pressure in early 2026, potentially triggering policy stimulus [11][14][15] - Expect a 50bp cut in RRR and a 10bp cut in LPR in 1Q26, an additional 10bp LPR cut in 3Q26, and broad fiscal deficit at 8.5% in 2026 [11][14][15] Offshore Asia New Issues - No new offshore Asia issues were priced on the last trading day [17] - Pipeline issues include BOC Aviation, Export - Import Bank of India, and Hyundai Capital America with various tenors and coupon rates [18] News and Market Color - Onshore primary issuances suspended last Friday during the New Year Holiday [21] - China will broaden fiscal spending in 2026 and prioritize domestic demand [21] - Multiple corporate events such as China Jinmao's redemption, CTF Services' acquisition lapse, and rating changes [21]

Economic Indicators - The U.S. Commerce Department is set to release the initial estimate of third-quarter GDP, which was delayed by two months due to a government shutdown. Economists forecast a GDP growth of +3.3% quarter-over-quarter, driven by strong consumer spending and modest investment gains [1] - U.S. Durable Goods Orders for October are expected to decline by -1.5% month-over-month, while Core Durable Goods Orders are anticipated to rise by +0.3% month-over-month [5] - The Fed's Industrial Production reports for October and November are expected to show no change in October and a +0.1% increase in November [6] - The U.S. Richmond Fed Manufacturing Index is projected to improve to -8 in December from -15 previously [7] Stock Market Performance - Wall Street's main stock indexes closed higher, with notable gains in chip stocks such as Micron Technology (+4%) and ON Semiconductor (+2%). Warner Bros. Discovery rose over +3% following a significant backing for its acquisition bid [3] - The Euro Stoxx 50 Index increased by +0.02%, with healthcare stocks outperforming, particularly Novo Nordisk, which gained over +7% after FDA approval of its obesity drug [8] - Asian stock markets, including China's Shanghai Composite Index and Japan's Nikkei 225, closed higher, with gains attributed to non-ferrous metal stocks and semiconductor stocks [10][11] Corporate News - ZIM Integrated Shipping Services saw a pre-market increase of over +8% after announcing multiple acquisition offers [12] - Parsons Corp. gained over +3% in pre-market trading after securing a significant contract with the Missile Defense Agency, valued at up to $151 billion [13] - Ametek rose about +1% in pre-market trading following an upgrade to Buy from Hold by TD Cowen, with a price target of $230 [14]

S&P downgrades China Vanke to selective default, citing distressed bond extension https://t.co/laa2sSFOEu ...

China Vanke’s woes are posing a growing risk for investors holding $1.3 billion of its dollar bonds, as a temporary reprieve on local debt still leaves it lurching toward eventual default or restructuring in the absence of any rescue https://t.co/E41eMZXn1V ...

Market Overview - Wall Street's major equity averages ended positively, with Carnival (CCL) surging over +9% after better-than-expected Q4 adjusted EPS and above-consensus FY26 adjusted EPS guidance [2] - Chip stocks rallied, with Micron Technology (MU) climbing about +7% and Advanced Micro Devices (AMD) rising more than +6% [2] - Oracle (ORCL) advanced over +6% after signing agreements with TikTok and ByteDance for a new joint venture [2] - Nike (NKE) was the top loser on the Dow, plunging more than -10% due to expected sales drop amid weakness in China [2] Economic Indicators - U.S. existing home sales rose +0.5% month-over-month to a 9-month high of 4.13 million in November, but fell short of expectations [6] - The University of Michigan's consumer sentiment index for December was unexpectedly revised lower to 52.9, weaker than the expected 53.5 [6] Federal Reserve Insights - New York Fed President John Williams indicated no urgency to lower interest rates, citing recent jobs and inflation data [7] - Cleveland Fed President Beth Hammack expressed that there is no need to change interest rates for several months following recent cuts [8] - U.S. rate futures show an 80.1% chance of no rate change and a 19.9% chance of a 25 basis point cut at the Fed's January meeting [9] Upcoming Economic Data - Key U.S. economic data releases this week include the initial estimate of third-quarter GDP, Durable Goods Orders for October, and the Fed's industrial production reports for October and November [10] - The Commerce Department will only publish two readings for the third-quarter GDP due to a government shutdown [10] International Market Developments - The Euro Stoxx 50 Index is down -0.22%, with food and beverage stocks underperforming while mining and technology stocks advanced [12] - U.K. GDP growth was reported at +0.1% quarter-over-quarter and +1.3% year-over-year, in line with expectations [13] - Japan's Nikkei 225 Stock Index closed sharply higher, buoyed by a weaker yen and Wall Street's rally [15]

China Vanke, once the country’s biggest developer before it succumbed to an unprecedented property crisis, is awaiting the results of a creditor vote that could see it tip into default https://t.co/qzafTot1Nl ...

分组1 - Cleveland Fed President Beth Hammack prefers more restrictive interest rates to combat high inflation, indicating current policy is around neutral [1] - Kansas City Fed President Jeffrey Schmid dissented against the recent FOMC decision to cut rates, citing persistent high inflation [1] - Chicago Fed President Austan Goolsbee anticipates more rate cuts in 2026 but dissented against a December cut, awaiting further inflation data [1] - Philadelphia Fed President Anna Paulson expresses greater concern about labor market weakness than inflation risks [1] 分组2 - Wall Street's major equity averages closed sharply lower, with Broadcom (AVGO) dropping over -11% due to disappointing AI market sales outlook [1] - Sandisk (SNDK) fell more than -14% after a downgrade from GF Securities, while Ciena Corp. (CIEN) slumped over -9% following a downgrade from Northland Securities [1] - Lululemon Athletica (LULU) surged more than +9% after reporting strong Q3 results and raising its full-year guidance [1] 分组3 - Investors are focusing on key U.S. economic data, including employment and inflation figures, as well as earnings reports from high-profile companies [2][4] - December S&P 500 E-Mini futures are up +0.48%, indicating a partial rebound from the previous selloff [2] - Notable companies reporting quarterly figures this week include Micron Technology (MU), Accenture (ACN), Nike (NKE), and FedEx (FDX) [6] 分组4 - Eurozone's October Industrial Production rose +0.8% month-over-month and +2.0% year-over-year, exceeding expectations [10] - China's November Industrial Production rose +4.8% year-over-year, but fell short of expectations [11] - Japan's Nikkei 225 Stock Index closed lower, with technology stocks leading declines, while bank stocks advanced ahead of a potential interest rate hike by the Bank of Japan [12]

Summary of Conference Call on China Property Sector Industry Overview - The conference call discusses the **China Property** sector, focusing on potential mortgage subsidies and their implications for the market. Key Points and Arguments 1. **Mortgage Subsidies Speculation**: - Market speculation suggests that China may provide **Rmb400 billion** in mortgage subsidies, potentially effective from early **2026** for purchases made between **September 1, 2025**, and **August 31, 2026**. The subsidy is speculated to be **1%**, with a possibility of up to **2%** in higher-risk areas [1][3][4]. 2. **Impact on Homebuyers**: - The average mortgage rates are currently **3.0%** for first homes and **3.3%** for second homes. With a **1%** subsidy, effective rates could drop to **2.0%-2.3%**, aligning closer to average rental yields of **~1.5%** in tier-1 cities and **~2%** in tier-2 cities. This could reduce monthly payments by **Rmb694-1,143** for homes valued at **Rmb1-2 million**, translating to total savings of **Rmb25,000 to 41,100** over three years [3][9]. 3. **Market Reaction**: - Following the speculation, shares of Vanke surged by **13%**, while Sunac and Jinmao rose by **9%**. In contrast, large-cap SOEs like CR Land and COLI saw only mild increases of **0-1%**, indicating that excitement was primarily driven by short covering rather than strong investor confidence in the policy [1][13]. 4. **Long-term Effectiveness**: - The effectiveness of the subsidies is questioned, as the core issue remains weak expectations for home prices. Secondary home prices have been declining at a rate of **~1.5%** monthly, which could negate the benefits of the subsidies shortly after implementation [4][12]. 5. **Policy Timing**: - The next potential policy window for discussing housing market support is the **CEWC** in the next **1-2 weeks**. If no new narrative emerges, the next opportunity for announcements would be during the **Two Sessions** in **March 2026** [5]. 6. **Retail Sales Impact**: - The mortgage subsidies, if fully utilized, could represent **0.8%** of China's retail sales, suggesting that the savings from mortgage repayments may have a more significant impact on retail sales than on the housing market itself [5]. Additional Important Information - **Historical Accuracy of Speculation**: The historical accuracy of market speculation regarding housing policies has been around **40%**, indicating a level of skepticism regarding the reliability of such forecasts [1][6]. - **Local Subsidy Examples**: Cities like Wuhan and Changchun have already implemented similar subsidies with caps ranging from **Rmb20,000 to 40,000** [8]. - **Share Price Performance**: The report includes detailed share price performance data for various companies in the sector, highlighting the mixed reactions to the speculation [13][19]. Conclusion - The potential introduction of mortgage subsidies in the China Property sector has generated significant market speculation and short-term excitement among investors. However, the long-term effectiveness of such measures remains uncertain, primarily due to ongoing declines in home prices and the need for stronger government commitment to stabilize the market.