HONG KONG, Feb 20 (IFR) - A weaker-than-expected
manufacturing number from China this morning prompted a round of
profit-taking in Asia credit markets, and most of the bonds in
the region ended wider.
"The market was consolidating a bit today," said a trader in
The move was especially pronounced on the CDS front as
investors bought protection, especially against a default in
China. The 5-year credit default swap for China ended the
session at 91bp/92bp, after closing yesterday at 88bp.
That helped push the Asia ex-Japan iTraxx IG index some 4bp
wider on the day to end at 139bp/140bp.
As usual, the high-grade market was immune to the selling
momentum, and bonds from Malaysia, Singapore and Korea ended the
day unchanged in spread terms.
The new issues mostly performed well, too. The new Beijing
Energy bonds, backed by a standby letter of credit from the
Agricultural Bank of China, gained more than 10bp to close
quoted at 244bp/243bp over the 2-year US Treasury.
The new IRFC bonds were also performing well closing 5bp
tighter in the session quoted at 235bp/234bp.
High-yield bonds, however, also saw some profit-taking, with
one account hitting bids on Shimao's 2021s at 101.00 and pushing
the bond quotes some 25 cents lower.