ASIA CREDIT CLOSE: Asian credit markets stay pat in quiet markets
SINGAPORE, Oct 9 (IFR) - Asian credit markets were holding up on Wednesday, despite the lack of progress in the US budget battle.
"Cash is doing well, in both high-grade and high-yield paper, and even CDS is performing alright, especially when seen against equities," said one trader. "There is small buying interest and we see a handful of investors adding risk across the sectors."
Shares in Asian stock markets sank in the morning, as investors have grown more nervous over the US deadlock. But stocks picked up in the afternoon as bargain-hunting got underway and the Nikkei ended up 1%.
The iTraxx IG was steady at 149bp/151bp, hardly changed from last night's close. In the high-grade sector, bonds were quoted wider in the opening hours but steady buying has kept cash prices stable.
Swire Pacific 2023s traded to yield 198bp, flat to yesterday's levels, although the paper was marginally wider than its reoffer spread of 195bp.
Korean paper continued to be in demand. GS Caltex 2018s traded to yield 188bp/186bp, 4bp tighter from 190bp, where they had priced. Woori 2018s traded to yield 160bp/158bp. More recent new issues also found good bids. Kowepo 2018s traded 10bp tighter from the 165bp reoffer spread where the bonds priced on October 2.
China bonds traded about 1bp wider.
The markets are expected to be range-bound over the next few days. "No one wants to do anything today," said the trader. "The last few days saw some guys adding risks but got burned when the market blew out again. So most of them have just stopped speculating and taking on exposures for the time being."
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