Report Industry Investment Rating - Maintain a buy recommendation on CPDEVs [3][9] Core View - The report provides a daily update on the fixed - income market, including price changes of various bonds, macro - news, new issuance information, and company - specific news [1][6][16] Trading Desk Comments - Yesterday, long - end Chinese IGs like TENCNT/BABA 50 - 57s were 0.5 - 0.7pt higher (unchanged to 5bps tighter), while JD 50 was 0.8pt lower (12bps wider) [1] - In insurance, SHIKON 35 tightened another 5bps (0.6pt higher) after tightening 20bps last week. CATLIF/NSINTW 34s were unchanged to 2bps tighter [1] - NIPILF 51/MYLIFE 55 were up 0.1pt, ASAMLI/SUMILF Perps were down 0.1 - 0.2pt. In AT1s, BACR 9.675/HSBC 7.05/UBS 6.85 Perps were up 0.1 - 0.3pt [1] - In HK, HYSAN 4.85 Perp was up 0.6pt. NWDEVL 28 - 31s/Perps were 0.7pt lower to 0.3pt higher. MTRC Perps were 0.1 - 0.2pt higher [1] - In Chinese properties, ROADKG 28 - 30s were 0.1 - 0.4pt lower, ROADKG Perps closed unchanged. LNGFOR 28/DALWAN 26 were down 0.3 - 0.5pt. Outside properties, WESCHI 26 was up 0.9pt [1] - In SE Asia, MEDCIJ 30 was up 0.6pt. Elsewhere, MONMIN 30 was up 1.0pt [1] - In CNH space, the new SWIPRO 35 was 0.1pt higher with yield tightening towards 3%. In LGFVs, CPDEV 26 was down 0.2pt, CPDEV 29 was up 0.2pt [2] - There were two - way interests on USD names like CHDOHU 7.6 28s/KNMIDI 8.5 26s and CNH names like ZCHTCD 6.7 28s/QHURGR 7.8 26s. In SOE perps, AVIILC Perp was up 0.2pt, CHPWCN Perp was down 0.2pt [2] Morning Updates (22 Jul 2025) - SHIKON 35 widened 10bps and NSINTW 34 widened 5bps. NACF/SHINFN 29 - 30s widened 1 - 2bps. HYSAN 4.85/FAEACO 12.814 Perps were down 0.3 - 0.4pt. WESCHI 26 was up another 0.5pt [3] - USD90.4mn of CPDEV 4.65 01/19/26 was validly tendered at expiration, meeting adjourned to 5 Aug'25. CPDEV 26 was 0.1pt higher this morning [3] - VEDLN: Hindustan Zinc 1QFY25 results beat estimates on record output and silver gains, VEDLNs were unchanged this morning [3] Top Performers and Underperformers | Top Performers | Price | Change | Top Underperformers | Price | Change | | --- | --- | --- | --- | --- | --- | | FWDGHD 6.675 PERP | 99.5 | 1.2 | GRNLGR 5 7/8 07/03/30 | 22.7 | - 4.4 | | RILIN 3 5/8 01/12/52 | 68.9 | 1.0 | JD 4 1/8 01/14/50 | 77.8 | - 0.8 | | MONMIN 8.44 04/03/30 | 95.9 | 1.0 | NWDEVL 4 1/2 05/19/30 | 48.6 | - 0.7 | | WESCHI 4.95 07/08/26 | 89.4 | 0.9 | LNGFOR 4 1/2 01/16/28 | 89.9 | - 0.5 | | CCAMCL 5 02/08/48 | 87.0 | 0.8 | NWDEVL 3 3/4 01/14/31 | 47.3 | - 0.5 | [4] Macro News Recap - On Monday, S&P (+0.14%), Dow (-0.04%) and Nasdaq (+0.38%) were mixed. The S&P 500 Index finished at 6305.6, its highest close ever [6] - UST yield was lower on Monday, with 2/5/10/30 - year yields at 3.85%/3.91%/4.38%/4.94% [6] Desk Analyst Comments on CPDEV - Central Plaza Development adjourned the meeting on CPDEV 4.65 01/19/26 to 5 Aug'25 due to lack of quorum. As of expiration, USD90.42mn of the bond was validly tendered [7] - Voting deadline for consent solicitation extended to 31 Jul'25. If approved, CPDEV can redeem all CPDEV 26 outstanding at par with 5 - business - day notice [8] - Maintain buy on CPDEVs due to Beijing SASAC's ownership, CPDEV's strategic importance, and good access to on - shore funding, and proactive management of offshore maturity profile [9] Offshore Asia New Issues - No new offshore Asia issues were priced today [14] - There are no new offshore Asia issues in the pipeline today [15] News and Market Color - Yesterday, 89 credit bonds were issued onshore with an amount of RMB170bn. Month - to - date, 1,337 credit bonds were issued, raising RMB1,409bn, a 12.8% yoy increase [16] - Land sales in China's smaller cities fell to the lowest level in over a decade [16] - Indonesian coal exports to China fell 12% yoy in 1H25 due to falling prices [16] - Fitch changed Continuum Green Energy's outlook to stable from positive and affirmed its B+ rating [16] - CTF Services issued HKD850mn CTFSHK 2.8 01/18/27 (CB) and repurchased HKD566mn CTFSHK 4 07/22/25 (CB), with the remaining HKD74mn converted into shares [16] - China Water Affairs Group and its top shareholder offered to buy the remaining stake in wastewater firm Kangda [16] - EQT and Brookfield are in active negotiations to acquire Gland Pharma from Fosun Group [16] - S&P assigned Fubon Life an A - rating with a stable outlook [16] - Vale Indonesia plans to raise USD1 - 1.2bn in 2026 - 27 for mine and smelter projects [16] - Road King bondholders were advised to reject the revised consent solicitation offer [16] - Sands China's new incentives on table - side bets could boost market share [21] - SoftBank - OpenAI US venture scaled back near - term goals due to disputes [21] - Hindustan Zinc 1Q25 results beat estimates on record output and silver gains [21]

Market Overview - The bond market continued to show weakness, with government bond futures experiencing a significant decline, particularly in the long-term contracts [1][2] - The central bank conducted a net withdrawal of 127.7 billion yuan in the open market, indicating a gradual return to a balanced but slightly loose liquidity environment [1][5] Bond Yield Trends - The yields on various government bonds showed a mixed trend, with long-term bonds weakening while short-term bonds remained stable [2] - The 30-year government bond yield rose by 1 basis point to 1.899%, while the 10-year government bond yield increased by 1.3 basis points to 1.69% [2] International Bond Market - In North America, U.S. Treasury yields fell across the board, with the 10-year yield dropping by 3.38 basis points to 4.3757% [3] - In Asia, Japanese bond yields saw a notable increase, particularly in the long-term segment [3] - European bond yields also decreased, with the 10-year French bond yield falling by 10.4 basis points to 3.292% [3] Primary Market Activity - The China Development Bank issued financial bonds with yields of 1.4933%, 1.5673%, and 1.6939% for 2-year, 5-year, and 10-year maturities, respectively, indicating strong demand with bid-to-cover ratios above 3 [4] Liquidity and Funding Conditions - The central bank's reverse repos on July 22 totaled 214.8 billion yuan at a fixed rate of 1.40%, contributing to a net withdrawal of 127.7 billion yuan for the day [5] - Short-term Shibor rates declined, with the overnight rate falling to 1.317%, the lowest since September 2022 [5] Institutional Insights - Institutions suggest that the bond market is likely to remain in a volatile state due to strong production but weak demand, with significant factors including stock market performance and major investment projects [6][7] - The convertible bond market is viewed as having high valuations, with recommendations to focus on stocks with a conversion premium within 20% [7]

Investment Strategy - T Rowe favors local bonds in Thailand and Malaysia [1] - The company anticipates that further monetary easing will be a primary factor influencing investor returns, potentially outweighing currency appreciation [1] Regional Focus - The investment strategy specifically targets Thailand and Malaysia [1]

Group 1 - The core viewpoint indicates a decline in government bond futures, with the 30-year government bond futures dropping by 0.46%, reaching a new low since June, while the 10-year government bond futures fell by 0.11% [1] - The yields on major interbank rate bonds have increased, with the 10-year government bond "25附息国债11" yield rising by 1.1 basis points, the 30-year government bond "25超长特别国债02" yield increasing by 1.6 basis points, and the 7-year government bond "25附息国债07" yield up by 2.1 basis points [1] Group 2 - The table presents various government bond yields, showing the 1-year yield at 1.3850, the 2-year yield at 1.4100, the 5-year yield at 1.6750, and the 10-year yield at 1.8890, among others [2]

Group 1 - The article discusses the preferred stock and baby bond market activity, providing both bottom-up insights on individual news and events, as well as top-down analysis of the broader market [1] - It highlights the importance of yield and risk management considerations in the Income Portfolios offered by the company [1] - The article encourages the use of Interactive Investor Tools to navigate various markets including BDC, CEF, OEF, preferred, and baby bonds [1] Group 2 - The company offers Investor Guides for CEFs, Preferreds, and PIMCO CEFs to assist investors [2] - A promotional offer for a 2-week free trial is available, allowing potential investors to explore services without risk [2]

Core Viewpoint - The article discusses the need for enhancing the liquidity and diversity of participants in China's bond market, particularly in light of the proposed changes to the regulations regarding the freezing of pledged bonds in repurchase agreements [1][2]. Group 1: Market Dynamics - China's bond market, being the second largest globally, requires continuous improvement in trading activity and participant diversity [1]. - The People's Bank of China has proposed to eliminate the requirement to freeze pledged bonds in repurchase agreements, which has garnered significant attention in the bond market [1]. - The current practice of freezing pledged bonds limits their circulation in the secondary market, thereby reducing overall market liquidity and trading activity [1]. Group 2: Impact of Proposed Changes - The monthly transaction volume of pledged repurchase agreements in the interbank bond market has been around 100 trillion yuan this year, and unfreezing a large number of short-term interest rate bonds will increase supply and enhance market depth [2]. - Increased market depth is expected to reduce volatility and facilitate better liability management for financial institutions, as well as smoother monetary policy operations by the central bank [2]. - The proposed changes align domestic practices with international standards, as overseas markets primarily use buyout-style repurchase agreements, which could attract more foreign investment into the domestic bond market [2][3]. Group 3: Broader Implications - The removal of the freezing requirement for pledged bonds may have significant ripple effects, including the unification of trading rules between onshore and offshore RMB bond markets [3]. - This unification could promote a virtuous cycle between the two markets and enhance the integration of the RMB bond market with international standards [3].

Core Insights - The bond market's focus has shifted from inflation concerns to issues surrounding fiscal stability and foreign demand for U.S. Treasuries, indicating a change in investor sentiment and market dynamics [1]. Group 1: Market Dynamics - The decline in perception of stability in the U.S. is closely linked to the volatility in fiscal stability and foreign Treasury demand, suggesting that these factors are interrelated and critical for market performance [1]. Group 2: Analyst Background - The analyst, Harrison, has over a decade of experience in financial analysis, particularly in private equity, real estate, and economic research, which provides a strong foundation for insights into market trends [1].

Market Overview - The bond market returned to a weak state on July 18, with most government bond futures closing lower and interbank bond yields generally rising by 0.5-1 basis points [1][2] - The central bank conducted a net injection of 102.8 billion yuan in the open market, while short-term funding rates continued to decline [1][6] Bond Futures and Yields - The 30-year main contract fell by 0.22% to 120.460, the 10-year main contract decreased by 0.08% to 108.790, and the 5-year main contract dropped by 0.05% to 105.990 [2] - The yield on the 10-year "25附息国债11" rose by 0.5 basis points to 1.666%, while the 30-year "25超长特别国债02" increased by 0.75 basis points to 1.875% [2] International Bond Markets - In North America, U.S. Treasury yields were mixed, with the 2-year yield rising by 1.06 basis points to 3.896% and the 10-year yield falling by 0.80 basis points to 4.449% [3] - In Asia, Japanese bond yields fell across the board, with the 10-year yield down by 2.8 basis points to 1.53% [4] Market Sentiment and Predictions - Institutions believe that the low-volatility bond market trend continues, with expectations of policy adjustments increasing towards the end of July [1][8] - According to Zhongjin Company, if the Federal Reserve Chair leaves office early, it would negatively impact the dollar and positively affect gold, while Southwest Securities noted that convertible bond valuations are at a relatively low level [7][8] Fund Flows and Liquidity - The central bank announced a 1.875 trillion yuan reverse repurchase operation at a rate of 1.4%, with a net injection of 102.8 billion yuan for the day [6] - Short-term Shibor rates mostly declined, with the overnight rate down by 0.1 basis points to 1.462% [6]

Group 1 - Liaoning issued a 20-year special local bond with a scale of 62.3171 billion [1] - The issuance interest rate is set at 2.0500% [1] - The marginal multiple of the bond issuance is 2.16 times, with an expected multiple of 2.04 [1]

Group 1 - The core viewpoint highlights a surge in bearish sentiment as the 30-year U.S. Treasury yield rises again, indicating a potential sell-off in the bond market [1] - The article discusses the ongoing turmoil in the Japanese bond market, which is contributing to the sell-off in U.S. long-term bonds, suggesting that U.S. equities may be the next liquidity "victim" [1] - There is a mention of election anxiety and fiscal concerns adding pressure to the Japanese yen, with capital shifting towards bullish positions on the USD/JPY exchange rate, particularly focusing on whether the key level of 150 can be maintained [1] Group 2 - The article outlines the interconnectedness of the bond market sell-off and market trends, emphasizing the need for strategies to respond to these developments [1]