SINGAPORE, Jan 28 (IFR) - Bond markets in Asia rebounded
today after the selloffs in the past three sessions. Still, bond
buyers were mostly looking for short-term high-quality names,
indicating that they remain in defensive mode, even if a bit
more upbeat today than as recently as yesterday.
The Asia ex-Japan iTraxx IG Index tightened to 150bp from
the 157bp close yesterday. The 5-year CDs of China, for
instance, also rallied to 93bp/92bp from a wide of 97bp
yesterday. Recent investment-grade issues, such as China
Overseas Grand Oceans' 5-year paper, were also 3bp-4bp tighter.
However, investors were asking more about the 5-year bonds
from Hong Kong and China IG names last year and the year
earlier, which, therefore, mature in 2017 and 2018.
Those bonds, which are already hard to find at other times,
were nowhere to be seen and, as such, their spreads tightened as
much as 6bp in some cases.
Indian bank paper also rebounded in response to a rate hike
in the country. The new Bank of Baroda 2019s were last quoted at
30bp/325bp, 3bp tighter on the day. Again, though, the 5-year
bonds issued last year and in 2012 were in higher demand and
tightened some 5bp-6bp.
Part of the reason for the sharp move in IG bonds was a 2bp
rise in the yield of the 10-year US Treasury as investors pared
their bearish bets.
Even IG property names, which had been among the worst
beaten, benefited from the better tone and Wanda's new 2024
bonds, which had traded as wide as 480bp, retreated to 457bp
today, still wide to the 455bp reoffer spread, though.
Liquidity, however, has thin and, as investors seek bonds
already hard to find on busy days, actual market activity had
become scarce. This is also a factor of the nearing Lunar New
Year holiday, which will see a good part of the Asian investor
base close shop from tomorrow afternoon.