HONG KONG, August 11 (IFR) - There was a strong rebound in
secondary trading today after panic selling on Friday.
Spreads on investment-grade bonds rallied 5bp-10bp today on
stronger sentiment. Asia ex-Japan IG iTraxx also tightened
5bp-7bp to 107bp/109bp.
"There was buying across the board today as Friday's panic
was overdone," said a Singapore-based trader. The Asian iTraxx
widened 4bp on Friday amid geopolitical concerns.
The geopolitical situation also eased today with news at the
weekend that Russian defence ministry had confirmed the end of
military exercises on the eastern Ukraine border.
Shanghai Electric Group's freshly printed bonds tightened
10bp to 130bp/125bp over US Treasuries. China Merchants Bank
Leasing's bonds also saw tightening of 7bp to 171bp/168bp.
Spreads on both tranches of Kexim's paper printed last week were
In the high-yield segment, buying by private banks and
funds, coupled with short covering, boosted the market with cash
prices indicated 25-50 cents higher across the board.
China property paper saw renewed buying on news today that
Fujian Province has become the latest province to loosen
restrictions on home-buying. The provincial government has also
required banks to provide more credit to property developers,
besides providing tax incentives for property purchases,
effective August 1.
Meanwhile, Berau Coal's 2017s dropped 1 point today to 95.75
mid-market to yield 9.12%. This was partially due to the
higher-than-expected price talk on the new 5-year non-call 3
paper the Indonesian coal miner will issue to refinance its
"The market was expected an IPG of 9.5%," a second
Singapore-based trader said.