Weekly Newletter

Executive Summary: The first full trading week of 2026 was defined by extreme geopolitical shifts and a surge in primary market issuance. In EM ex-Asia, the detention of Nicolas Maduro by US authorities triggered a massive rally in Venezuelan paper, while high-beta credits showed significant intraday volatility. In Asia, credit markets maintained a strong initial tone, though profit-taking emerged mid-week in high-yield names, particularly in the China property and Indian NBFC sectors.

Market Visualizer

*Weekly Snapshot: Key Drivers & Regional Flows*

Regional Credit Developments

🌍 EM Ex-Asia Credit

• VENZ/PDVSA: Rallied +9pt/+10pt following the detention of Nicolas Maduro; closed near weekly highs despite late profit-taking.
• UKRAIN: Rebounded +50ct/+1.5pt on improved sentiment regarding peace negotiation milestones and security guarantees.
• SENEGL: Outperformed (+1.88pt/+4.25pt) following positive IMF progress and strong local auction results.
• MEXICO: Successfully absorbed $9BN in new supply across tranches, with the 30Y trading +70ct above reoffer.
• LEBAN: Gained +4.75pt (trading context 28-28.75) fueled by heavy Real Money demand.

🇨🇳 Asia Credit: China Property & HY

• Vanke (VNKRLE): USD bonds plunged 3-4pts on heightening restructuring fears and low recovery estimates.
• New World Development (NWDEVL): Front-end bonds spiked +1-2pts on reports of using internal cash flow for upcoming maturities.
• Nickel Industries: Rallied +1.5pts following a sharp spike in global nickel prices.

🌏 Asia Credit: Frontier & Sovereign

• Sri Lanka (SRILAN): Ripped +2pts higher on strong RM/HF demand and scarcity of long-dated paper.
• Indian NBFCs: MGFLIN and IHFLIN weakened (-0.75pt) following RBI objections to the Bain Capital deal structure.
• Eximbank: New 30Y $ issuance tightened 8bps on the break due to scarcity value for Indian long-end bonds.

DISCLAIMER

This document is strictly confidential and is being provided to you for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any securities or financial instruments. The information contained herein has been obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.

AI Generation Notice: Portions of this content may have been generated or assisted by Artificial Intelligence (AI) technologies. Users should independently verify critical data points. Past performance is not indicative of future results.

Executive Summary: Global markets were anchored by the FOMC’s decision to cut rates by 25bps. While the rate cut supported Treasuries, US equities were mixed due to AI-sector volatility (Broadcom, Oracle). Regional divergence was a key theme: EM ex-Asia credit remained resilient with tightening spreads, while Asia markets saw mixed equity performance but stable credit.

Market Visualizer

*Weekly Snapshot: Key Drivers & Regional Flows*

Regional Credit Developments

🌍 EM Ex-Asia Credit

• Ukraine (UKRAIN): Strong rally (+1.0-2.0pts) on headlines of US-Ukraine security guarantee discussions. GDP Warrants also rallied (+1.5pts) on amended terms and deadline extension.
• Argentina (ARGENT): Firm amid volatility. The government successfully issued $1.4bn notional in local bonds (ARGBON) at 6.5%. Nov inflation: +2.5% MoM.
• Brazil (BRAZIL): 2026 election polling shows Lula leading (38%), with Michelle Bolsonaro (23%) outperforming other opposition figures like Tarcísio de Freitas.
• Venezuela (VENZ/PDVSA): Rallied (+0.75/+1.25pts) on expectations of US operations following the seizure of a sanctioned tanker and rhetoric from President Trump.
• Gran Tierra Energy (GTE): Bonds dropped sharply (-2.75pts) after Moody’s placed the credit on review for downgrade due to weaker production growth.
• Ecobank Nigeria: Successfully accepted $71m for its tender offer on 2026 notes.

🇨🇳 Asia Credit: China Property & HY

• Vanke (VNKRLE): Standout performer; USD bonds +2pts, Equity +13% on new proposals to onshore bondholders including potential SOE credit enhancement.
• New World Dev (NWDEVL): Sentiment improved after family sold 100% stake in Alinta Energy to Sembcorp (EV A$6.5bn), sparking hopes of cash injection.
• Dalwan: Proposed extending Feb 2026 notes to 2028; market reacted positively (+1-2pts) due to consent fee and mandatory partial redemptions.
• Lai Sun: 2026 bonds up +5-6pts after selling 50% stake in CCB Tower to JD.com for HK$3.5bn.

🌏 Asia Credit: Frontier & Sovereign

• Sri Lanka (SRILAN): Stabilized (+0.125/+0.25pts) after initial weakness; IMF review delayed as government focuses on emergency flood relief.
• Pakistan (PKSTAN): Stable/Firm after obtaining IMF loan installments.
• Thailand: Corporate spreads remained in demand despite geopolitical tensions (air strikes on Cambodian military sites).
• Genting: Downgraded by Moody’s to Baa3 (Stable); bonds remained resilient (+0.25pt).
• Vedanta (VEDLN): Curve traded up +0.5pts, supported by rally in Hindustan Zinc equities (+4.2%) and silver prices.

DISCLAIMER

This document is strictly confidential and is being provided to you for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any securities or financial instruments. The information contained herein has been obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.

AI Generation Notice: Portions of this content may have been generated or assisted by Artificial Intelligence (AI) technologies. Users should independently verify critical data points. Past performance is not indicative of future results.

Executive Summary: Market pricing currently implies a >90% probability of a 25bp Fed cut at the upcoming meeting. In Asia, India reported +8.2% GDP growth, while China’s property sector data continues to show contraction. In EM ex-Asia, volatility increased following headlines regarding Ukraine peace negotiations.

Market Visualizer

*Weekly Snapshot: Key Drivers & Regional Flows*

Market Dashboard

Regional Credit Developments

🇮🇳 India

• Macro Data: India GDP growth recorded at +8.2%. The RBI cut benchmark rates by 25bps.
• Reliance Industries (RILIN): S&P upgraded the rating to A- (previously BBB+). Spreads tightened 7-14bps following the announcement.
• Adani Ports (ADSEZ): November cargo volumes increased +14% YoY. ADSEZ 31s bond spreads are quoting at ~G+191bps.
• Ratings: Fitch downgraded Greenko (GRNKEN) to BB- citing project delays. S&P and Moody’s revised Vedanta’s outlook to Positive.

🇨🇳 China & North Asia

• Meituan: Q3 revenue increased +2% YoY. Net cash position declined by RMB 30bn QoQ following expansion initiatives in the Middle East and Brazil.
• Property Sector: Fitch released a 2026 outlook citing continued office oversupply. China Vanke was downgraded to ‘CCC-‘ with ratings placed on Watch Negative.
• South Korea: Moody’s downgraded Hanwha TotalEnergies to Ba1 (High Yield), citing petrochemical cycle weakness.

🇦🇺 Australia & ASEAN

• Regulatory (Australia): APRA finalized the AT1 capital phase-out. Banks will replace 1.5% AT1 buffers with 1.25% Tier 2 capital and 0.25% CET1.
• Indonesia: The new Sovereign Fund (Danantara) has been cited in media discussing potential overseas investments.
• Frontier Markets: Severe flooding reported in Pakistan and Sri Lanka; Pakistan finance minister projects a 0.5% impact on GDP growth.

🌍 EM Ex-Asia (CEEMEA & LatAm)

• Ukraine (UKRAIN): The sovereign launched a consent solicitation to exchange GDP Warrants into new 2030 and 2034 notes. Warrants rallied +5.5pts following the launch.
• Argentina (ARGENT): Minister Caputo announced plans to issue a new local law USD bond (6.5% coupon, maturing Nov 2029). President Milei’s approval rating polled at 42.6% in November.
• Senegal (SENEGL): Bonds rebounded +0.25pts on Friday after an IMF spokesperson confirmed ongoing work on a Debt Sustainability Analysis (DSA).
• Chile (Corp): Telefonica Chile bonds dropped ~2pts following reports of binding offers valuing the company at $1.2-1.3bn.

DISCLAIMER

This document is strictly confidential and is being provided to you for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any securities or financial instruments. The information contained herein has been obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.

AI Generation Notice: Portions of this content may have been generated or assisted by Artificial Intelligence (AI) technologies. Users should independently verify critical data points. Past performance is not indicative of future results.