SINGAPORE, Aug 14 (IFR) - Asian credits saw range-bound
trading today in slightly weaker markets as investors sought
clear directions after gloomy data releases out of China, Japan,
the UK and the US.
Germany added to the gloom this morning, announcing that its
economy contracted 0.2% in the second quarter, while France said
its economy had stagnated.
"Markets will remain volatile and face some headwinds,
especially related to geopolitical issues," said a high-yield
Trade volumes were back to normal following three days of
rebounds from a sell-off late last week. The iTraxx Asia IG
Index was broadly unchanged at 104bp/106bp, though 5bp tighter
from a week ago.
Market tone was slightly softer as some profit-taking crept
in to replace the bout of buying. Investment-grade cash bonds
were about 1bp wider, but CCB Asia's newly minted Tier 2 bonds
tightened 1bp-2bp from a reoffer spread of 275bp over US
"The bonds have performed against my expectations," said one
Singapore-based trader. "There is going to be lots of supply in
Chinese bank subordinated paper, so I thought the bonds would
China industrial credits were holding up well. Shanghi
Electric tightened sharply to quotes of 121bp today, against the
reoffer spread of 140bp, while Sinopec's 2024s were seen at
Kexim's newly priced bonds were still wide to reoffer
spreads, with the 2019s seen at 78bp/76bp, above reoffer of
72.5bp, and the 2026s were at 96bp/94bp versus reoffer of 85bp.
In the high-yield sector, Cogard 2021s were quoted at
99.125/99.625, while Greenko 2019s were under water at