ASIA CREDIT CLOSE: Markets watch Indo sukuk, India supply in subdued session

Tue Nov 6, 2012 4:43am EST

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HONG KONG, Nov. 6 (IFR) - The Asian credit markets were focused on new issues, with the overall mood subdued ahead of the US presidential elections.

The new longer-dated bonds from Hutchison Whampoa outperformed the 5-year bonds, which were quoted around T+134bp, only a touch tighter than reoffer price of T+135bp. The 10-year rallied to T+156bp from T+162.5 at reoffer.

With the Republic of Indonesia having mandated banks for a potential Global sukuk, attention switched to Indonesian bonds which continue to be bid up.

The ROI 2022s were at 107.50 and 2042s at 170.5, while PLN 2024s were at around 103. Investor meetings are starting later this week for a sukuk issuance.

"We are waiting to see which tenors the government is planning the sukuk issuance as the sukuk is expected to be cheaper than the conventional bonds," said a credit trader.

There was also anticipation of more supply from India. Power Finance Corp met investors last week and the market is speculating a bond to come soon. Bharat Petroleum 2022s had backed off from the tights of T+279-275bp to T+285bp bid.

Chinese high-yield paper was trading firm but Soho China lagged as some players felt it was priced too tight.

"Given that everything is trading tight, we don't see Chinese high yield papers rallying at the moment, although they did trade with a positive tone around a quarter point higher today," a high-yield trader said.

Soho China traded a quarter point down. The 2017s were 98.75/99.125 and the 2022s were 99/99.75.

The iTraxx Series 18 index was quoted at around 113.15bp compared with yesterday's 116bp mid.

Neha.dsilva@thomsonreuters.com

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