ASIA CREDIT CLOSE: Morning gains lost on lack of directions
SINGAPORE, Aug 21 (IFR) - Asian credit spreads tightened in the opening sessions, but the weak market undertone eroded the gains as the day progressed. The iTraxx IG index opened at 153bp/156bp this morning, about 2bp firmer than yesterday.
It could not hold on to the gains as worries about what the US Fed minutes will disclose tonight pushed the index out to 158bp/161bp in the afternoon.
The Asian index is one of the worst performing of the past month, according to a Markit note yesterday. At a quote of 160.89bp, the Asia IG has widened some 33bp, beaten only by the EM index, which has pushed out 46bp to 325.57bp.
The upcoming Fed minutes and fears of more rates volatility kept trading activities at a minimum in Asia today. "There has been almost no trading given that the Philippines is closed, and Taipei is on holiday," said one Singapore-based trader. "The mood is still weak, and people are still trying to find some direction."
Despite the negative sentiment, the Republic of Indonesia chose this morning to announce a roadshow for next week to market a US dollar global sukuk.
It did not have an immediate impact on the outstanding 2022s, which were indicated at 78.75/80.25, a slight drop from yesterday's 78.10/79.60.
The Indonesia conventional 2023s were earlier quoted at 94.25/96.00. Indonesian corporate papers were holding up, with the Multipolar 2018s at 95/97 and the Gajah Tunggal 2018s at 97/98.
There was a bit of a reprieve for Indian bonds after the huge hits over the past few days. State Bank of India's due 2018s recovered marginally with quotes at 400bp/365bp over US Treasuries, versus 440bp/420bp yesterday.
The Bank of India 2018s were indicated at bids of 475bp, 5bp higher than yesterday. The IOC 2023s were indicated at 425bp/385bp, a substantial gap from 355bp a week ago.
The general risk-aversion to emerging-markets credits was also extended to Korean paper. Korea Gas 2018s, which had outperformed last week, slipped to 150bp/140bp against 140bp exactly a week ago.
Meanwhile, a consent solicitation and tender offer exercise launched recently for Winsway's 8.50% bonds due 2016 lent some support to the distressed paper. The notes rose to 41.50/45.00 after bottoming at 27.00 a couple of weeks ago.