SINGAPORE, March 12 (IFR) - Asian credits were firm, showing
a clear decoupling from the region's equity markets, which were
in the red today.
Stocks were under pressure as risk-averse investors stayed
away on concerns over economic slowdowns in China and the US.
The Nikkei tumbled 2.6%, the sharpest fall since February 4,
said Reuters, while China stocks eased 0.17%.
While risk sentiment was weak in equities, the mood was more
supportive in credit on the back of limited supply versus strong
The Asia IG index was at 126bp/128bp, unchanged from
yesterday, with China's CDS remaining at around 91bp/94bp.
Traders noted that the index would take on a new look on March
20 and the players were positioning ahead of the move.
In the cash markets, other than the high-yield real-estate
names, credits were well supported.
"The truth is that you are not seeing many new deals," said
one credit analyst. "Investors are gearing up to buy
fixed-income assets in Asia, building more liquidity than there
are fresh supplies in which to invest.
So, they turn to the secondary to buy stuff. You are seeing
that classic example in the market right now."
He estimated that year-to-date new issues amounted to
USD28.8bn, down nearly 30% year on year. Sovereigns and banks
have dominated this year's issuance, while corporate issuance
has been sorely missed.
Much of the issues came from China, where the USD9trn
economy is churning out more fund-raising exercises than
elsewhere in Asia.
However, China property bonds are going through a rough
patch. Country Garden, a liquid benchmark in the sector, saw its
recent bonds due 2021s dropped a quarter point to 96/97.
On the other hand, Wanda 2024s were unchanged at
445bp/435bp, thanks to Franshion's new deal. Franshion is
offering a 5-year bond at an initial price talk of 5.875%, which
looks relatively tight to Wanda's paper.
Cifi's 2019s were quoted to yield 9.572%/9.41% while Yuzhou
2019s were at 9.84%.