SINGAPORE, Jan 14 (IFR) - Investors sold recently issued Chinese bank bonds to make room for an expected increase in offerings of dollar bonds from the sector.
The newly minted 3-year and 5-year bonds of Bank of China widened 3bp on the break and remained there until the end of the day, dragging with them the recently printed 3-year bonds of Bank of Communications, which also finished a couple of basis points wider.
“The indigestion of China bank risk is triggering selling on similar existing issues,” wrote a strategist in his afternoon update.
A weaker tone in the Asian equity markets also took its toll on the CDS front and the Asia ex-Japan iTraxx IG index ended 1bp wider at its last quote of 138bp/141bp.
High-beta bonds, such as Philippines’ recently issued 2024s and Indonesia’s 2044s, weakened, as well, with the latter quoted at 101.65 and the former at 100.75.
“Investors were generally better sellers today, as accounts have been making room for more supply,” said a trader in Hong Kong.