SINGAPORE, July 1 (IFR) - Asian credits gave up their search for new impetus and went with the flow, or the lack of it, by sitting tight in a very muted market.
Trade was negligible on the first day of the second half of 2014. Major players in Hong Kong are out on vacation for a national holiday.
Those who remain are sitting on their hands and not opening fresh positions ahead of a batch of economic data, including PMI figures and ADP numbers, due from Europe and the US for the rest of the week. The long Independence Day weekend starting from Friday is also keeping investors sidelined.
“There are no trades out there, the market is shut for today,” said a credit analyst.
Even an improved PMI figure for China disclosed earlier today could not move the credit markets.
The PMI, an indication of manufacturing activity, rose for the fourth consecutive month to 51.0 in June for China, an improvement from 50.8 in May and 50.4 in April. It points to a continued recovery but a credit report cautions that recovery remains fragile.
China’s 5-year CDS held steady at 75bp/78bp, unchanged from yesterday. The iTraxx Asia IG index had tightened by over 1bp earlier in the day but lost gains to return to yesterday’s close at 102bp/104bp.
Cash bonds were flat for the second day running. Hongqiao 2017s were indicated at 103.75/104.25 while Sri Lankan Airlines’ guaranteed 2019s were at 100.50/101.00.
Greenland Holding’s new bonds were still weak and unchanged. The 2019s were 300bp/295bp over US Treasuries and the 2024s were at 355bp/350bp, wider than the respective reoffer spreads of 285bp and 341.2bp.
Kogas 2026s, which had performed well after it priced at a reoffer spread of 92.5bp on June 23, have moved back to par with quotes at around 92bp/87bp.