SINGAPORE, March 1 (IFR) - Asian credit markets ended flat
to tighter today as the Hang Seng index closed down 0.61% after
a negative session in Wall Street. The trading performance was
similar to earlier in the week when markets in Europe tumbled
but credit in Asia remained steady, as investors continue to put
money to work in the secondary amid a dearth of primary
The Asia ex-Japan iTraxx IG 18 index ended today quoted at
108.00 mid-market, virtually unchanged for the week. While the
European CDS indices moved as much as 40bp at times, the Asian
index remained stuck in the 107bp-110bp range (for a graphic of
the Asia itraxx index please click here reut.rs/YDyWCe ).
"We were really range-bound the whole week," said one
trader in Singapore.
Philippine CDS ended the week quoted at 98bp/100bp, in line
with where it started, having widened only marginally on Tuesday
on the back of the results of the Italian election. Indonesia
ended a little bit wider at 135bp/140bp, and its spread to the
Philippines opened 5bp. But that was simply a result of the
announcement that the sovereign had mandated banks and will do a
two-tranche transaction soon.
"Actually, it did not even get whacked as much as you would
have thought given that Indonesia and Pertamina both mandated,"
said another trader in Singapore, referring to news today that
the state-owned oil company had picked Barclays, Citigroup and
Royal Bank of Scotland to lead a dollar deal.
Pertamina's 2042 bonds fell some 35ct in price terms, but
that was marginal considering the prospects for significant new
volume. In fact, supply - or lack of supply - was the overriding
theme last week. As investors realised there would be few new
deals, they put money to work in secondary.
According to traders, both real money and private banking
accounts bought throughout the week. This also buoyed the few
new issues that did price. Glorious Property ended the day
around 101.00, after pricing at par earlier in the week. Bank of
Communications' 10-year bond end the week at 184bp/183bp, after
pricing at 190bp.
HDFC closed at 225bp, 2bp wider than yesterday but still
tighter than the reoffer spread of 230bp. The Indian lender saw
intense trading activity as investors were understood to be
shorting the bond to reflect negative views on the Indian
economy after yesterday's budget announcement. However, there
was enough buying interest to hold the bond inside the reoffer
spread. Other Indian names widened some 3bp-4bp as investors
reacted to the headlines out of New Delhi.