ASIA CREDIT CLOSE: Thin liquidity leave Asian bonds, spreads broadly flat

Mon Feb 18, 2013 3:48am EST

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HONG KONG, Feb 18 (IFR) - Asian credits were flat amid a firm tone in secondary trade today as market players, drifting back to work after a week-long holiday in Hong Kong and China, held off active trading. A holiday in the US today also provided another reason for the thin liquidity.

The iTraxx IG remained broadly unchanged at 110/112bp, a range that has not moved since the Singapore markets opened last Wednesday.

Secondary bonds mirrored the sluggish credit spreads. The small rally in perpetual continued to help shore up the perpetual paper from Petron and Reliance, with the Philippines oil refiner Petron saw bids of 103.25-103.75 for its paper, up from 103 last Friday and from 100 par reoffer over two weeks ago.

Bids for the Reliance perps remained healthy at 98.125-98.875, compared with 98.5 last Thursday. But Cheung Kong's perps stayed under water at 93-93.625, although they were slightly improved from 92 last Thursday.

A credit analyst said although new issues had rallied strongly, the outperformers and underperformers remained unchanged. High-grade paper like Yuexiu 2023s, Champion 2023s, Cosco Pacific 2023s and the Korean papers are still in the red, while Southeast Asian credits are still standout performers on their rarity value.

In the high-yield Chinese property space, Greentown 2017s were flourishing at bids of 102.5 versus issue price at par, while Guangzhou R&F's newest 2020s were down at 99.5.

China Railway 2023s were quoted at 172bp over US Treasuries, with the analyst saying the bonds were fully valued. Hainan Airlines 2020s, which were the last Asian bonds to price before the Lunar New Year break, were still holding steady at around 235bp over UST, just inside the 238bp issue price.

In the Indian corporate space, solid 3rd quarter earnings provided a fillip to the sector. Indian Oil Corp's 5.625% 2021s were 5bp tighter at 205/195bp, PowerGrid 3.875% 2023s were at 210/200bp and Bharat Petroleum 4.625% 2022s at 230/220bp.

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