Emerging debt-Asian bond spreads flat ahead of econ data
HONG KONG, July 28 (Reuters) - Asian bond spreads were flat on Monday as better-than-expected U.S. consumer sentiment and housing data were offset by caution ahead of a slew of global earnings results and other economic data due out this week.
The iTRAXX Asia ex-Japan high-yield index ITAHY5UA=ICAP, a key measure of risk aversion, tightened by a few basis points (bps) to 530/535, while the equivalent investment-grade index ITAIG5UA=GFI was steady at 136/138.
"A lot of people are just waiting for the economic data this week, especially the U.S. jobs data on Friday," said a Hong Kong-based trader.
Doubts about the health of the U.S. economy have been a dominant factor in global markets this year.
The outlook for Asia's biggest export market improved somewhat following reports on Friday showing an unexpected rebound in U.S. consumer sentiment this month and in business investment last month. [ID:nN25388430]
Investors were also comforted by data showing new U.S. home sales in June were not as weak as expected.
Oil prices have also continued to drop, easing concerns over inflationary pressures in the region. Crude futures CLc1 rose 15 cents to $123.41 a barrel on Monday, after falling to as low as a seven-week low of $122.50 during U.S. trade on Friday, still well below peaks above $147 hit earlier this month.
But a number of U.S. and Asian economic data and corporate earnings reports are likely to dominate this week's trading.
Among the highlights in the United States are consumer confidence data on Tuesday and employment numbers on Friday.
In the region, India's central bank is expected to raise its key repo rate INREPO=ECI by 25 or 50 basis points from the current 8.50 percent at its meeting on Tuesday to cool inflation. [ID:nBOM260256]
Rising inflation at a time of slower growth has been a concern for Asian investors, though on Monday the cost of protection against defaults in the region's sovereign debt fell as a recent widening in their spreads was seen as excessive.
Malaysia's five-year credit default swaps MALAYS5UA=GFI, narrowed by about 8 basis points to 99 after the country's central bank kept interest rates on hold on Friday. [ID:nKLR236087]
Bank Negara signalled it was ready to act against further price pressures as it raised its average 2008 inflation forecast to 5.5-6.0 percent.
An improved tone in secondary markets could spur Asian issuers to sell bonds, although August is traditionally a slow month for new debt sales.
Hong Kong & China Gas (0003.HK) will meet bond investors in London and the United States this week, with an eye for a potential deal. The gas supplier already met with investors in Singapore and Hong Kong on Friday. (For list of upcoming debt issuance from Asia see [EUB/ASIA]
FIVE-YEAR CREDIT DEFAULT SWAPS
Bid/Ask spread
Current Week ago Korea Dev Bank ~/140 140/170 Hutchison 108/120 125/137 PCCW-HKT 140/170 150/~ China 50/~ ~/65 Indonesia 230/245 270/~ Korea 85/93 ~/110 Malaysia 98/106 117/128 Philippines 218/230 245/245
~no bid or ask spread For CDS prices double click on GFICDS
ASIAN BENCHMARK DOLLAR BONDS
Coupon Maturity Bid price Bid spread
5-YEAR
------
DBS Bank 7.13 15-May-11 105.52 154
Malaysia 7.50 15-Jul-11 107.59 129
ICICI Bank 5.75 12-Jan-12 93.90 435
Petronas 7.00 22-May-12 107.39 141
Hutchison 6.50 13-Feb-13 100.66 288
Chartered Semi 6.25 4-Apr-13 96.23 376
Korea 4.25 1-Jun-13 97.31 143
United Overseas 4.50 2-Jul-13 94.99 223
PCCW-HKT 6.00 15-Jul-13 101.18 228
China 4.75 29-Oct-13 100.23 125
10-YEAR
-------
Hutchison 6.25 24-Jan-14 98.46 348
Korea 4.88 22-Sep-14 98.76 100
PCCW-HKT 5.25 20-Jul-15 88.00 338
Woori Bank 6.13 3-May-16 96.56 259
Penerbangan 5.63 15-Mar-16 105.51 68
Philippines 8.75 7-Oct-16 112.75 259
Indonesia 6.88 9-Mar-17 99.50 284
ICICI Bank 6.38 30-Apr-22 84.31 385
Petronas 7.88 22-May-22 120.10 164 (Reporting by Rafael Nam; Editing by Tomasz Janowski)
