HONG KONG, March 21 (IFR) - Asia credit markets were firmer on Tuesday, supported by buoyant sentiment with new issues shining in secondary and primary deals remaining active.
“Investor expectations have stabilised after Janet Yellen’s comments last week on the pace of interest rate increases for this year,” said a Hong Kong-based investment-grade credit trader.
“We continued to see investors adding duration - shown by growing interest in ten-year, thirty-year notes,” he said.
He noted that Korea National Oil Corp’s US$1.5bn three-tranche new issue traded tighter on buying interest from Korean investors. Spread on its 2022 tranche tightened the most to 92bp from 100bp over Treasuries.
Chinese IG names were in general 1bp-2bp tighter. China Everbright Bank’s 2020s were slightly tighter at 99.68 in cash price.
The iTraxx Asia ex-Japan investment grade CDS index tightened 1.8bp to 82.0bp/83.5bp.
Indonesian textile company Sri Rejeki Isman’s (Sritex) US$150m seven-year non-call four issue traded up to 99.75 in secondary.
On the other hand, China’s onshore bond market suffered from tightening liquidity before the central bank’s quarterly risk assessment at the end of this month.
The benchmark seven-day repo rate traded in the interbank market soared to 9% in morning trading, its highest since January 2014, before falling back to 2.69% by midday.
Reporting by Ina Zhou; Editing by Vincent Baby