ASIA CREDIT CLOSE: Market unchanged as investors catch breath

Mon May 19, 2014 5:37am EDT

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SINGAPORE, May 19 (IFR) - Investors caught a breath today as the dollar-primary market was quiet for the first time in several weeks.

Still, instead of turning the focus to secondary markets, accounts seemed to take it easy as traders saw little volume throughout the session.

The little trading seen was a two-way thing, with no clear trend emerging.

As a result, spreads of the more liquid investment-grade credits ended mostly unchanged and the Asia ex-Japan IG iTraxx Index also ended the Asian session as it started. quoted at 118bp/120bp.

One trader said there was a lot of buying interest in the new bonds of Bharti Airtel, but there were enough sellers for the bonds to end the day unchanged at 254bp/250bp.

The same dynamic was seen across the board for Indian credits, with most of the activity focused on bank bonds.

The exception in the IG segment was Indonesia, which saw its sovereign bonds slip an average of 35 cents in price terms.

The move was more prominent for Pertamina's bonds, which finished the day quoted 50 cents weaker amid rumours that the state-owned energy giant may emerge with a jumbo dollar offering as early as this week.

On the high-yield side, prices were mostly unchanged, but one trader in Singapore said that retail and private banking accounts were buying.

There was special interest from European retail accounts in Double B property bonds from China, which helped the latest issue from Country Garden to rally to 99.50, 50 cents higher than the reoffer level of 98.989 at which they were stuck for Friday's close.

Regional retail accounts continued to show interest on the perpetual bonds of Yanzhou Coal, printed last week at par and which closed today quoted at 101.25/101.50.

However, profit-taking on the paper pushed the price down from the 101.75 it had reached on Friday, though buyers of the paper continue to enjoy a healthy return since it was printed.

Christopher.Langner@thomsonreuters.com

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