ASIA CREDIT CLOSE: New issuance hits indigestion
SINGAPORE, Oct 28 (IFR) - The Asian credit session was quiet, as expected, for the most part, with a dampener put on proceedings in the form of hurricane Jude in the UK, which will keep many London traders out of the office today.
US equity markets were upbeat last week, but this failed to put any momentum on credit and, with a hefty USD5.75bn printing in primary Asia last week, the signs are there that indigestion is beginning to hit.
On the day, the iTraxx IG Asia Index is closing unchanged in a reflection of the lacklustre tone of the session.
With the FOMC scheduled to meet on Wednesday, activity is likely to be thin in the primary market ahead of that, although a deal announcement from Citic Bank, which is on the road with a Basel III-compliant Tier 2 offering, is likely on Thursday.
China PMI, due out on Friday, may well have the potential to move markets if it comes in on the weak side.
One slight puzzle against the backdrop of weaker US data - the delayed employment report for September came in below consensus, while durable goods and University of Michigan sentiment were also weak - is that in the week to last Wednesday, according to research firm EPFR, US$1.125bn was withdrawn from emerging-market US dollar fixed-income funds.
That was a hefty increase against the USD110mn withdrawn the previous week and flies in the face of an extremely benign backdrop for fixed income.
Recent new issues have failed to impress, with last week's perp from Chalco bid at reoffer, the new 2018 from Evergrande bid at 100.20 and the Haitong 2018s bid at Treasuries plus 277bp versus a plus 275bp reoffer.
Meanwhile, leads on the proposed Citic Basel III deal will be mindful of the soft performance of the ICBC Basel III deal, which was last at plus 345bp bid, having priced at plus 315bp.
- Cortege departs to take Mandela's body to lie in state |
- U.S. Mega Millions lottery up to $344 million, fourth biggest in its history
- Uruguay becomes first country to legalize marijuana trade
- UPDATE 1-U.S. Mega Millions lottery up to $344 million, fourth biggest in its history
- Ukrainian riot police clash with protesters in Kiev square