Daily Brief Credit: Lucror Analytics – Morning Views Asia and more

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Sands China, UPL Limited
• US treasury yields ended slightly lower in a holiday-shortened session on Friday. The decline in yields was supported by Treasury Secretary Scott Bessent’s remarks that regulators may be “very close” to easing the supplementary leverage ratio, which could support banks’ trading of treasuries.
• That said, larger yield declines earlier in the day were pared after President Donald Trump issued new tariff threats against the EU and Apple Inc. The yield on the 2Y UST was unchanged at 3.99% (after dropping as much as 9 bps in the day), while the yield on the 10Y UST ended 2 bps lower at 4.51% (after declining up to 8 bps).

• Lenovo’s Q4/24-25 performance was weak in our view, while the full-year results were acceptable.
• The company recorded solid revenue growth and higher profitability across segments.
• The PC segment has benefited from: [1] the upcoming cessation of Windows 10 support and interest in on-device AI; [2] a rush to ship PCs early in Q1/25 to avoid potential new US tariffs.

• JSW Steel’s Q4/24-25 results were poor, with lower revenues and earnings due to a weak pricing environment and despite a record production year from capacity expansion.
• The balance sheet deteriorated significantly, although liquidity improved materially.
• We expect FY 2025-26 to be better, with a significant increase in earnings due to an improved pricing environment as well as the new safeguard duty in India.

Founded in 1973, Reliance Industries (RIL) is one of the largest conglomerates in Asia and India’s largest private-sector corporation. It has diverse businesses including energy, petrochemicals, natural gas, retail, telecommunications, mass media and textiles. RIL is India’s largest exporter, accounting for 8% of total merchandise exports and 5% of the government’s revenue from customs and excise duty. It is listed on the Indian Stock Exchange, with a market cap of c. USD 200 bn. The company is owned (49.5%) and controlled by Mukesh Ambani.