CMBI Credit Commentary Fixed Income Daily Market Update 固定收益部市场日报 Trading desk comments 交易台市场观点 Yesterday, in the new issuance space, the new TOHOKU 31 tightened 5bps from RO at T+70. The new NTT Float 31 and OCBCSP 36 hovered around ROs amid active two-way flows. The secondary Chinese IG space overall closed unchanged. We saw balanced flows on TMT names KUAISH/MEITUA/BABA, better buying in CCAMCL FRNs and front-end ORIEAS from Chinese RMs, and better selling on FRESHK 27-29s by global money accounts. EHICA ...

Trade Agreement Overview - The trade agreement between the US and Indonesia is expected to lower US tariffs and facilitate the purchase of approximately $33 billion in American goods by Indonesia [1][2] - Indonesia will avoid a threatened 32% tariff and instead face a 19% rate for most goods, enhancing trade relations [2][8] Economic Impact on Indonesia - Indonesia will eliminate levies on over 99% of US goods and remove non-tariff barriers, which is anticipated to narrow its $16 billion trade surplus with the US [4][8] - The agreement includes significant imports from the US, such as $15 billion in energy, $13.5 billion in commercial aircraft, and $4.5 billion in agricultural commodities [5] Benefits for the US - The pact aims to expand access to Indonesia's consumer market of over 280 million people, providing American companies with a more level playing field [3][9] - The agreement also addresses critical minerals, allowing US companies to extract them under favorable terms, which aligns with US efforts to reduce supply-chain dependence on China [7] Regulatory and Investment Changes - Indonesia will reform its pre-shipment inspection processes and eliminate tariffs on digital services, facilitating smoother trade [6] - The country has committed to facilitating $10 billion in outbound direct investment to the US, including in engineering, construction, and energy projects [6] Context and Challenges - The agreement comes amid market headwinds for Indonesia, including concerns over governance and credit outlook, which could impact investor confidence [11] - Lower duties may support foreign-exchange inflows as the Indonesian rupiah trades near an all-time low against the dollar [12]

Core Insights - Antero Midstream Corporation (AM) is scheduled to report its fourth-quarter 2025 results on February 11, after market close [1] - In the last reported quarter, AM's adjusted earnings of 24 cents per share fell short of the Zacks Consensus Estimate of 25 cents due to increased operating expenses, although higher gathering and compression volumes helped mitigate the impact [1] Earnings Performance - AM has beaten earnings estimates in two of the last four quarters, missed in one, and reported breakeven in another, resulting in an average earnings surprise of 3.26% [2] - The Zacks Consensus Estimate for fourth-quarter earnings per share remains at 24 cents, reflecting no revisions in the past week, which indicates a 4.4% improvement from the same quarter last year [3] Revenue Expectations - The Zacks Consensus Estimate for revenues in the fourth quarter is projected at $293.9 million, representing a 2.2% increase from the year-ago figure [3][8] - AM is expected to generate revenue from stable, fee-based contracts primarily with Antero Resources Corporation for the transportation and processing of natural gas and liquefied petroleum gas [4] Earnings Prediction - The earnings model suggests a potential earnings beat for AM, supported by a positive Earnings ESP of +0.84% and a Zacks Rank of 3 (Hold) [5] - The company is anticipated to report revenues from its pipeline, gathering, compression, processing, and water services assets [8]

Core Viewpoint - Santos anticipates increased production in 2026, driven by the Barossa gas project and the Pikka oil development, despite previous delays in the Darwin LNG plant [1][2] Production and Operational Updates - The first cargo from the Darwin LNG plant is being loaded onto the LNG tanker Kool Blizzard, destined for Sakai, Japan, following successful drilling in the Barossa gas field [2] - Production from Barossa gas and Pikka is expected to increase by up to 30% in 2026 [2] - Pikka phase one is nearing mechanical completion, with first oil expected in Q1 2026 [2] Financial Performance - For Q4 2025, total sales revenue was A$1.23 billion, a decrease of 12.1% from A$1.4 billion in Q4 2024 [3] - Free cash flow from operations in Q4 was approximately A$380 million, up 30% from the prior quarter, totaling around A$1.8 billion for the full year [3][6] - Quarterly production rose 5% to 22.3 million barrels of oil equivalent (mboe), with full-year production at 87.7 mboe [3] Sales Volume and Revenue Breakdown - Sales volumes increased 15% quarter-on-quarter to 24.8 mboe in Q4, with total sales volumes for the year reaching 93.5 mboe [4] - LNG sales revenue in Q4 was A$780 million, down 9.1% year-on-year, while domestic sales gas revenue increased by 5.9% to A$268 million [4] - Crude oil revenue fell 61.8% to A$66 million, and condensate revenue decreased by 1.9% to A$101 million, while liquefied petroleum gas revenue rose by 7.7% to A$14 million [4] Operational Highlights - Production commenced at the Hides F2 well in Papua New Guinea at an average rate of 60 million standard cubic feet per day [5] - Domestic gas production in Western Australia increased by around 19% due to project initiatives [5] - The company secured a mid-term LNG supply contract and is preparing for the Beetaloo Basin appraisal programme planned for Q3 2026 [5]

Core Viewpoint - On January 16, the domestic futures market for crude oil and related products experienced a significant decline, with major contracts dropping over 3% [1]. Group 1: Price Movements - As of January 16, the main crude oil futures contract fell by 3.16%, settling at 438.10 yuan per barrel [1]. - The main fuel oil futures contract decreased by 3.47%, closing at 2529.00 yuan per ton [1]. - Low sulfur fuel oil futures dropped by 2.84%, ending at 3045.00 yuan per ton [1]. - Liquefied petroleum gas futures declined by 2.73%, with a closing price of 4128.00 yuan per ton [1]. Group 2: Futures Price Data - The opening price for SC crude oil was 441.80 yuan, with a previous close of 446.60 yuan and a last settlement of 452.40 yuan [2]. - Fuel oil opened at 2558.00 yuan, with a previous close of 2586.00 yuan and a last settlement of 2620.00 yuan [2]. - The opening price for liquefied petroleum gas was 4203.00 yuan, with a previous close of 4233.00 yuan and a last settlement of 4244.00 yuan [2]. - Low sulfur fuel oil had an opening price of 3062.00 yuan, with a previous close of 3087.00 yuan and a last settlement of 3134.00 yuan [2]. Group 3: Warehouse Data - As of January 15, fuel oil futures warehouse receipts were at 0 tons, unchanged from the previous trading day [3]. - The warehouse receipts for asphalt futures were 30,810 tons, remaining stable compared to the previous day, while the warehouse receipts for asphalt increased by 1,270 tons to 16,910 tons [3]. - Low sulfur fuel oil warehouse receipts remained at 18,280 tons, unchanged from the previous day [3]. - The warehouse receipts for liquefied petroleum gas were at 4,194 hands, also unchanged from the previous day [3]. Group 4: Basis Data - The basis data indicates that fuel oil, liquefied petroleum gas, and low sulfur fuel oil contracts are experiencing a 'backwardation' phenomenon, where spot prices exceed futures prices [3]. - The basis for fuel oil is 50.20%, with a spot price of 5262.5 yuan and a futures price of 2620 yuan [3]. - The basis for liquefied petroleum gas is 3.92%, with a spot price of 4417.5 yuan and a futures price of 4244 yuan [3]. - The basis for low sulfur fuel oil is 3.51%, with a spot price of 3199 yuan and a futures price of 3087 yuan [3].

Core Insights - Energy Transfer (ET) is currently trading below its 50-day simple moving average (SMA), indicating a short-term bearish trend, with a stock price of $16.39 as of December 24, 2025, down 23.6% from its 52-week high of $21.45 [1][7] - Over the past six months, ET units have declined by 6.4%, which is worse than the Zacks Oil and Gas - Production Pipeline - MLB industry's loss of 1.7% [5] - The company generates 90% of its revenue from fee-based contracts, which limits its exposure to commodity price fluctuations [7][12] Company Overview - Energy Transfer operates over 140,000 miles of pipelines and related infrastructure across 44 U.S. states, with a diversified asset portfolio that supports stable earnings [10][11] - The firm plans to invest $4.6 billion in growth projects in 2025 to further enhance its asset base [10] - Energy Transfer is a leading exporter of liquefied petroleum gas and is expanding its natural gas liquids (NGL) export facilities to meet rising global demand [8] Financial Performance - The Zacks Consensus Estimate for Energy Transfer's earnings per unit indicates year-over-year growth of 3.91% for 2025 and 15.25% for 2026 [17] - The current quarterly cash distribution rate is 33.25 cents per common unit, with a distribution yield of 8.11%, outperforming the industry average of 6.21% [24] - Energy Transfer's trailing 12-month return on equity (ROE) is 10.71%, which is lower than the industry average of 13.28% [25] Market Position - ET's current trailing 12-month Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA) is 8.9X, compared to the industry average of 10.53X, indicating that ET is trading at a discount relative to its peers [21] - The company has contracted over 6 billion cubic feet per day (Bcf/d) of pipeline capacity under agreements with a weighted average term of 18 years, expected to generate over $25 billion in firm transportation fee revenues [13][15]

Core Viewpoint - The domestic futures market for crude oil and related products experienced a decline on December 9, with significant drops in prices across various contracts, indicating a bearish trend in the market. Group 1: Price Movements - As of December 9, the main crude oil futures contract fell by 2.32% to 445.80 CNY per barrel [1] - The main fuel oil futures contract decreased by 2.67% to 2410.00 CNY per ton [1] - The low-sulfur fuel oil futures contract dropped by 2.09% to 3002.00 CNY per ton [1] - The liquefied petroleum gas (LPG) futures contract declined by 1.02% to 4261.00 CNY per ton [1] Group 2: Futures Price Data - The opening price for SC crude oil was 451.60 CNY, with a previous close of 457.60 CNY and a last settlement price of 456.40 CNY [2] - The fuel oil opened at 2470.00 CNY, with a previous close of 2508.00 CNY and a last settlement price of 2476.00 CNY [2] - The asphalt futures opened at 2940.00 CNY, with a previous close of 2959.00 CNY and a last settlement price of 2955.00 CNY [2] - The LPG opened at 4283.00 CNY, with a previous close of 4291.00 CNY and a last settlement price of 4305.00 CNY [2] - The low-sulfur fuel oil opened at 3035.00 CNY, with a previous close of 3089.00 CNY and a last settlement price of 3066.00 CNY [2] Group 3: Inventory Data - As of December 8, the inventory data showed that the futures warehouse receipts for asphalt remained unchanged at 1370 tons, while the warehouse receipts for asphalt decreased by 2000 tons to 2690 tons [3] - The futures warehouse receipts for fuel oil remained at 26090 tons [3] - The low-sulfur fuel oil warehouse receipts remained unchanged at 370 tons [3] - The medium-sulfur crude oil futures warehouse receipts were stable at 3,464,000 barrels [3] - The LPG futures warehouse receipts remained at 4194 lots [3] Group 4: Basis Data - The basis data indicated a phenomenon of "backwardation" for fuel oil, LPG, and low-sulfur fuel oil, where spot prices exceeded futures prices [3] - The basis for fuel oil was 2861 CNY with a basis rate of 53.60% [3] - The basis for asphalt was -11 CNY with a basis rate of -0.37% [3] - The basis for LPG was 298 CNY with a basis rate of 6.58% [3] - The basis for low-sulfur fuel oil was 26 CNY with a basis rate of 0.82% [3]

Core Insights - The Oil and Gas Development Company (OGDCL) has commenced oil production from the Pasakhi-14 well in Hyderabad district, Sindh, Pakistan, producing 1,100 barrels of oil per day, which supports the company's strategy for exploration and national energy security [1][3] Company Operations - OGDCL holds a 100% working interest in the Pasakhi and Pasakhi North Development and Production Lease, with the Pasakhi-14 well drilled to a depth of 2,183 meters targeting the upper sands of the Lower Goru formation [2] - The company employed advanced drilling technologies including a Rotary Steerable System (RSS), Electromagnetic Measurement While Drilling (MWD), and a nitrified mud system for the drilling of Pasakhi-14, marking the first use of a nitrified mud system to enhance directional control and formation integrity [2][3] - The well is equipped with electric submersible pump technology to facilitate production [3] Strategic Developments - The addition of Pasakhi-14 aligns with OGDCL's strategy of focused exploration, efficient drilling, and production optimization to meet the energy security needs of Pakistan [3] - In the previous year, OGDCL began production at Kunnar West Well-3, which produces 3.5 million cubic feet of gas, 30 barrels of condensate, and 3.8 tonnes of liquefied petroleum gas daily [5] - Recently, OGDCL and its joint venture partners secured a provisional award for eight exploration blocks offshore Pakistan following a government-led competitive bidding round [6]

Core Insights - Indian state refiners have awarded their first joint, long-term tenders to Chevron, Phillips 66, and TotalEnergies for the import of U.S. liquefied petroleum gas (LPG) in 2026 [1] Group 1: Companies Involved - Chevron, Phillips 66, and TotalEnergies are the companies awarded the tenders for importing U.S. LPG [1] - This marks a significant step for Indian state refiners in securing long-term supply agreements [1] Group 2: Industry Implications - The awarding of these tenders indicates a growing reliance on U.S. liquefied petroleum gas by Indian refiners [1] - This move may enhance energy security for India as it diversifies its sources of LPG imports [1]

Group 1: Skillsoft Corp. (SKIL) - Skillsoft is an instructor-led training services company with a Zacks Rank 1 [1] - The Zacks Consensus Estimate for its current year earnings has increased by 240.9% over the last 60 days [1] - Skillsoft has a PEG ratio of 0.36 compared to the industry average of 0.98, and it possesses a Growth Score of B [1] Group 2: Micron Technology, Inc. (MU) - Micron Technology is a memory and storage products company with a Zacks Rank 1 [2] - The Zacks Consensus Estimate for its current year earnings has increased by 24.4% over the last 60 days [2] - Micron has a PEG ratio of 0.51 compared to the industry average of 1.45, and it possesses a Growth Score of A [2] Group 3: Ultrapar Participaçoes S.A. (UGP) - Ultrapar is a distributor of liquefied petroleum gas, gasoline, ethanol, diesel, fuel oil, and kerosene with a Zacks Rank 1 [3] - The Zacks Consensus Estimate for its current year earnings has increased by 51.9% over the last 60 days [3] - Ultrapar has a PEG ratio of 1.96 compared to the industry average of 2.44, and it possesses a Growth Score of A [3]