ASIA CREDIT CLOSE: Stability returns after volatile session
HONG KONG, March 21 (IFR) - Asian credits stabilized a day after the new US Federal Reserve chief shocked the market with the possibility of earlier-the-expected rate increases.
Investors took the opportunity today to buy bonds that had sold-off in the past few days. Stability in Asian equity markets also gave investors some added comfort in returning to risk.
"The market is 2bp-3bp tighter with property names grinding tighter with fast money accounts buying," said a Singapore bond trader.
The Asia ex-Japan IG iTraxx index was quoted at about 137bp/139bp, 2bp tighter on the day as the credits underlying the index were rolled over.
Traders reported heavy buying in Chinese property bonds, which had been beaten down by worries over China's economy as well as news of a loan default by a small Chinese property developer.
Among investment grade credits, China Overseas Finance's bonds were 10bp-15bp tighter. In high yield, Franshion Properties' 2019s rose 25 cents to 97.63/98.38 and Country Garden's 2021s and 2023s rose 50 cents each at 91.50/92.50 and 90.50/92.00, respectively.
Credit default swaps on Chinese credits were unchanged at 101-104. CDS was 3bp tighter for Indonesia at 182/192 and 2bp tighter for Korea and Philippines at 62-65 and 105-115, respectively.
Among new deals, IDBI 2019s traded about 330bp tighter over US Treasuries after pricing at 350bp over on Wednesday.
High yield bonds from Indonesia were 0.25-0.375 points higher on the day but traders said expectations of supply weighed on this sector.
Traders said they expected the market to remain choppy in the near term with buying on positive news and exaggerated selling on negative headlines.