HONG KONG, Feb 17 (IFR) - Low beta investment grade credits
rallied today amid a short squeeze, according to traders. The
move, however, happened in a day of very low liquidity.
"I think I did two trades today," said a trader with a major
The lack of activity only helped exacerbate the moves,
especially for Korean issues. The new 10-year bonds of Korea
National Oil Corp tightened about 2bp to trade at 103bp/100bp,
while the new 2019s tightened about 4bp and ended the Asian
session quoted at 100bp mid-market.
Even the new 10-year bonds of Korea Gas managed to tighten
about 1bp in the day to close at 109bp/106bp. Yet, the company
underperformed its peers after it reported a net loss for 2013.
"With this credit, though, no one cares about its results,
this is basically sovereign risk," said the trader.
A rally in the equity markets of the region also helped
boost higher-beta credits. The new 2024s of the Republic of the
Philippines ended the session up by 50 cents, quoted at 103.85
That sentiment ultimately helped the Asia ex-Japan iTraxx IG
index grind a bit tighter and it closed quoted at 133bp/134bp,
about 2bp tighter in the day and some 6bp-8bp tighter than where
it was a week ago.