ASIA CREDIT CLOSE: Spreads widen on weak sentiment

Fri Jan 24, 2014 4:32am EST

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HONG KONG, Jan 24 (IFR) - Asian credit spreads widened Friday as risk sentiment remained weak across asset classes, although some bottom fishing emerged later in the day to lend support to prices.

The iTraxx Asia IG Index widened to 145bp from 141bp over.

The weaker tone in the credit market continued from overnight trading sessions in the US and Europe.

Additionally, the lingering effect of the Wanda Properties bonds, which re-priced the property sector, continued to impact the market.

Traders said the Chinese and Hong Kong property bonds traded 10bp-20bp wider on the day.

Although Wanda Properties' new 10-year bonds traded 465bp over US Treasuries from 455bp over at reoffer, some retail buying bought the paper back to around reoffer level.

Chinese property bonds with longer tenors were down sharply today. Franshion Properties 2021s, Shimao Property 2020s and Central China Real Estate 2020s were down a point in price terms, while Country Garden's 2021s and Kaisa's 2020s were down 1.50 points.

Bonds of Chinese state-owned enterprises traded 4bp-6bp wider today.

India's ICICI Bank 2019 bonds traded 7bp wider at 304bp/299bp. Export-import Bank of India's 2023s were 3bp wider at 280bp/270bp. Bank of India 2018s were 5bp wider at 285bp/270bp.

Republic of Indonesia's long-end bonds traded weaker today. The 2023s traded 11bp wider at 273bp/250bp, while the 2043s were 16bp wider at 284bp/274bp.

Traders said the weakness in credit market set a negative tone for new issues next week because of the widening seen in credit spreads.

Neha.dsilva@thomsonreuters.com

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