Weekly Updates

Executive Summary: EM credit markets endured a volatile week as the Middle East conflict remained unresolved, dampening risk appetite across asset classes. Ex-Asia EM saw a sharp mid-week rally on US-Iran de-escalation hopes before fading as ceasefire credibility eroded. CDX.EM closed modestly firmer on the week, though ETF and real-money outflows from hard-currency funds persisted. In Asia, IG credit slipped 0.2% and HY fell 0.6%, with equity markets also under pressure (HSI -1.3%, KOSPI -5.9%). Vanke dominated headlines as it approached onshore bondholders for a payment delay and signalled potential broader restructuring. Selective bright spots emerged: IHFLIN bonds recovered on a Moody’s upgrade to B1, Zhongsheng rose post less-than-feared FY25 results, and Chinese tech names surged on the regulator’s move to end food-delivery price wars. Pakistan bonds weakened intra-week; over the weekend, the IMF announced a staff-level agreement for a US$1.2bn loan package, subject to Executive Board approval.

Market Visualizer

*Weekly Snapshot: Key Drivers & Regional Flows*

Regional Credit Developments

🌍 EM Ex-Asia Credit

• CEEMEA – GCC IG: Largely retraced to pre-conflict levels, underpinned by local buyer support, as early-week optimism around US-Iran de-escalation sparked material tightening in Bahrain, Egypt, and Jordan before sentiment reversed on fading ceasefire credibility.
• Turkey / South Africa: Both cheapened into week-end against a backdrop of rate volatility and FX concerns, standing out as underperformers within CEEMEA.
• Angola: The US$2.5bn Eurobond dominated SSA flow, initially trading firm on new-issue demand before drifting below re-offer as broader HY risk sentiment softened late in the week.
• Egypt: Tapped its 2033s amid active sovereign issuance, with the name benefiting from the mid-week rally before retracing. SSA economies broadly grappled with oil-shock spillovers from the unresolved Middle East conflict.
• Latin America – Mexico / Colombia: Spreads generally widened, with both names underperforming on ETF selling pressure and oil-linked fiscal concerns. Selective secondary activity was observed in Chile and Peru, which cheapened back toward recent wides.
• EM Hard Currency Funds: ETF and real-money outflows persisted across the week. CDX.EM closed modestly higher week-on-week despite two weak late-week sessions, reflecting the broadly mixed tone.

🇨🇳 Asia Credit: China Property & HY

• Vanke: Bonds fell approximately 4pts to the high 30s as the developer formally reached out to onshore bondholders requesting a payment delay on its April maturity, while simultaneously weighing options for a broader debt restructuring. The situation remains fluid with no resolution announced as of week-end.
• Weschi: Bonds dropped ~4pts following weak quarterly earnings, compounded by a Fitch outlook revision to Negative on its B rating. The agency cited uncertainty over free cash flow improvement, elevated overseas capital expenditure, execution risks in the ramp-up of offshore cash generation, and the potential application of a lower country ceiling.
• Zhongsheng: Despite an S&P downgrade to BBB- from BBB, bonds rose approximately 2pts following FY25 results that came in ahead of market expectations. Management noted liquidity remains adequate.

🌏 Asia Credit: Frontier & Sovereign

• Pakistan: Long-end bonds slipped approximately 1pt during the week. Over the weekend, the IMF announced a staff-level agreement for a US$1.2bn loan package, subject to Executive Board approval.
• IHFLIN (IHS Holding): Bonds rose approximately 0.3pts on net, with the intra-week surge of 3-4pts driven by RBI approval of the IHS equity investment (SEBI approval still pending) and a Moody’s upgrade to B1 from B2 with a Positive Outlook. Bonds gave back a portion of their gains as the broader market weakened into the close.

📊 Equity & Sector Observations

• China Tech – Meituan / JD.com: China’s market regulator moved to end the price war in the food delivery sector, providing a direct boost to both names. Meituan surged 8.5% and JD.com rose 4.7% on the week, standing out against broadly weak equity markets (HSI -1.3%, KOSPI -5.9%).
• EV / Lithium / Green Energy: The sector outperformed against the broadly weak equity backdrop. Market participants noted the ongoing Middle East conflict drew attention to oil supply dependency; EV and lithium-related equities rose on the week alongside commentary around the green energy sector.

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