July 21, 2014 / 9:37 AM / 3 years ago

ASIA CREDIT CLOSE: Muted secondary trading due to Tokyo close

SINGAPORE, July 21 (IFR) - Secondary trading in Asia was muted today with Tokyo closed for a public holiday.

With the Treasury market also closed until London opened this afternoon, there was little liquidity in the investment-grade segment, traders said.

The iTraxx Asia ex-Japan Index, which widened to 110bp on Friday before closing at 105bp, stayed flat at 105bp.

“There was quite a bit of geopolitical concern on Friday, so people are still cautious this week, but Asia is again is relatively isolated,” a trader said.

Indonesian sovereign paper is expected to get a small knee-jerk rally, when the official winner of the election is announced tomorrow. The local media has already named Joko “Jokowi” Widodo as winner as the finished vote count shows 63% in his favour,

“There is a rally in Indonesian equity space and the rupiah, but the reaction in the bond space is muted,” said a second trader. “Much of the optimism may have been priced in.”

In the high-yield segment, there was buying from private banks today. Evergrande Real Estate 2015s and 2018s changed hands today at higher prices than on Friday, a third trader said.

Lai Sun Garment, which printed CNH650m 4-year bonds at par last Thursday, saw the notes trading up to 102 today.

“Investors seem to like the secured nature and the attractive yields on the notes,” said a third trader.

Chinese property bond issuers are managing inventories for a glut of supply in the near future. Sunshine 100 China Holdings and Sino Ocean Land have already announced mandates, while developers like Redco Properties Group, Jingrui Holdings, and Modern Land (China), Roadking and CIFI are said to be also preparing to tap the market.


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