Bottom-up default shifts significantly lower for telecoms, pharma; higher for tech

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{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2463076307?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1058471606/image_1058471606.jpg","is_english":true,"pubTime":"2024-08-30 23:58","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2463076307","market":"sg","top_or_hot":-1,"title":"Bottom-up default shifts significantly lower for telecoms, pharma; higher for tech","media":"seekingalpha","content":"<div>\n<p>Telecommunications (NYSEARCA:XTL), (IYZ) and pharmaceuticals (PJP), (XPH), (PPH) have seen the most downward shifts in their default probability, according to Goldman Sachs’ bottom-up default model. ...</p>\n\n<a href=\"https://seekingalpha.com/news/4145562-bottom-up-default-shifts-significantly-lower-for-telecoms-pharma-higher-for-tech\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; 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Lotfi Karoui, chief credit strategist at Goldman Sachs, said that this decline “reflects a combination of a positive survivorship bias in the case of pharma (XPH) as well as some improvement in fundamentals in the case of wirelines.” In addition, retail (XRT), (RTH) has also seen a great drop in default risk due to strong performance this year, Karoui said. On the other hand, technology (VGT), (IYW), (XLK) and transportation services (XTN), (IYT), (FTXR) have seen rises in default risk. “There has been a marked increase in stress in the CCC bucket (vulnerable issuers), while BB and B issuers (higher risk and ‘significantly higher’ risk of default issuers) have seen decent declines in the aggregate probabilities of default,” Karoui said. CCC issuers face a higher probability of default relative to one year prior, while higher-quality high-yield (HYG), (HYLB) bonds have improved. “Capturing the upside from the historically elevated dispersion in the HY bond market will be best achieved via sector and single name selection, as opposed to a heavy allocation on the CCC bucket.” Here is a summary of the default risk per sector:  Telecoms: about 2.8% in 2Q2024 vs. 5.1% in 2Q2023 Technology: about 2.8% in 2Q2024 vs. 1% in 2Q2023 Transportation services: about 3% in 2Q2024 vs. 0.4% in 2Q2023 Media and entertainment: about 3% in 2Q2024 vs. 2% in 2Q2023 Leisure: about 2.4% in 2Q2024 vs. 2.9% in 2Q2023 REITs: about 2% in 2Q2024 vs. 0.5% in 2Q2023 Health care: about 1.8% in 2Q2024 vs. 2% in 2Q2023 Paper: about 1.8% in 2Q2024 vs. 1.7% in 2Q2023 Airlines: about 1% in 2Q2024 vs. 0.1% in 2Q2023 Cable and satellite: about % in 2Q2024 vs. % in 2Q2023 Consumer cyclical services: about 1% in 2Q2024 vs. 0.9% in 2Q2023 Chemicals: about 0.8% in 2Q2024 vs. 0.2% in 2Q2023 Metals and mining: about 0.8% in 2Q2024 vs. 0.7% in 2Q2023 Retail: about 0.8% in 2Q2024 vs. 2% in 2Q2023 Other finance: about 0.6% in 2Q2024 vs. 1% in 2Q2023 Pharmaceuticals: about 0.5% in 2Q2024 vs. 3.2% in 2Q2023","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2463076307"}