SINGAPORE, Jan 9 (IFR) - New issues held up in the secondary
market today, giving investors renewed comfort that there is
room for the expected spike in supply this month.
Most of the bonds priced earlier in the week were trading
tighter and even those not rallying were not losing ground.
The best performer was the new 10-year fixed-rate bond Kexim
sold on Wednesday. This bond was quoted at 103bp/101bp, having
priced at 112.5bp over US Treasuries.
"This is kind of expected as European and US credit markets
have been going gangbusters and Korean credits tend to follow
those markets," said a credit analyst in Singapore.
The new 10-year bonds of Hongkong Land were also performing
well, last quoted at 167bp/169bp, having priced at 175bp. The
new 3-year bonds of the Bank of Communications were 2bp-3bp
tighter, quoted at 182bp over the 2-year US Treasury.
Indonesia was the underperformer of the lot, as it ended the
Asian session unchanged from where it started. The new 2024s and
2044s had lost some of their earlier gains during US hours and
closed the Asian session quoted at 100.75/101.00 and
Both had left Asia yesterday flirting with 101.00. They are
still much higher than the reoffer prices of 99.441 and 98.734.
The new issues from high-yield Chinese property developers
R&F Properties, KWG and Kaisa were all quoted around reoffer,
mostly unchanged from yesterday.
While the more active new issues were doing fairly well,
there was some pressure building up on the CDS side. Hedge funds
have been buying protection for most of the week due to weaker
equity markets and downbeat economic data from China.
As a result, the Asia ex-Japan iTraxx IG index closed today
at 138bp/140bp, about 2bp wider than yesterday and some 6bp
wider than where it started the week.