SINGAPORE, March 12 (IFR) - Asian credits were firm, showing a clear decoupling from the region's equity markets, which were in the red today.
Stocks were under pressure as risk-averse investors stayed away on concerns over economic slowdowns in China and the US. The Nikkei tumbled 2.6%, the sharpest fall since February 4, said Reuters, while China stocks eased 0.17%.
While risk sentiment was weak in equities, the mood was more supportive in credit on the back of limited supply versus strong demand.
The Asia IG index was at 126bp/128bp, unchanged from yesterday, with China's CDS remaining at around 91bp/94bp. Traders noted that the index would take on a new look on March 20 and the players were positioning ahead of the move.
In the cash markets, other than the high-yield real-estate names, credits were well supported.
"The truth is that you are not seeing many new deals," said one credit analyst. "Investors are gearing up to buy fixed-income assets in Asia, building more liquidity than there are fresh supplies in which to invest.
So, they turn to the secondary to buy stuff. You are seeing that classic example in the market right now."
He estimated that year-to-date new issues amounted to USD28.8bn, down nearly 30% year on year. Sovereigns and banks have dominated this year's issuance, while corporate issuance has been sorely missed.
Much of the issues came from China, where the USD9trn economy is churning out more fund-raising exercises than elsewhere in Asia.
However, China property bonds are going through a rough patch. Country Garden, a liquid benchmark in the sector, saw its recent bonds due 2021s dropped a quarter point to 96/97.
On the other hand, Wanda 2024s were unchanged at 445bp/435bp, thanks to Franshion's new deal. Franshion is offering a 5-year bond at an initial price talk of 5.875%, which looks relatively tight to Wanda's paper.
Cifi's 2019s were quoted to yield 9.572%/9.41% while Yuzhou 2019s were at 9.84%.