ASIA CREDIT CLOSE: High-yield credits bounce on better sentiment
SINGAPORE, Feb 5 (IFR) - Asian financial markets recovered marginally today amid better risk sentiment due to the overnight rallies in the US markets and retail investors' dip buying.
Equities in Asia rebounded in the morning after yesterday's selloffs, but, as London markets opened, stocks were dipping into negative territory.
The Hang Seng Index was down 0.6%, while Chinese stocks were 0.8% lower. Japanese and Korean shares, though, ended higher.
Asian credit spreads got a lift from the positive mood in the morning and were stable, despite the turn in equities in the evening.
The iTraxx Asia IG index tightened 2bp to 149bp/151bp, with the China and Thailand 5-year CDS notably narrowing 3bp and 2bp, respectively.
High-yield credits benefited from the bounce in sentiment, rising a quarter to three-quarters of a point in the morning, but easing slightly in the afternoon.
"We are starting to see retail starting to buy rated and Chinese property bonds," said one trader. "People are beginning to look at high-yielding assets again, and retail interest is visible on dip buying.
This is surprising, given the risk-averse sentiment of the past few days and selloffs in equities."
Fantasia and R&F bonds were in demand, with the latter recovering a quarter of a point to 99.25/99.75. Alam Sutera also saw its 2019s recoup some of the losses and were now indicated at above par at 100.50, up from yesterday's 99.50.
In the IG sector, Wanda's 2024s took a hit from the recent selloff and were quoted at 478bp/473bp today. KDB new 2024s were at 112bp/107bp.