HONG KONG, Jan 29 (IFR) - Asian credit markets treaded water on Tuesday with investment grade paper largely unchanged. The outperformer was the new Chinese property paper from Greentown China, which held up about a point above reoffer.
The new 2018s were up a point this morning but eased slightly to 100.625/101.
Traders said there was a 2-way flow seen in the China property space and while there were takers for the bonds there was also profit booking seen. Hence, Greentown was not only outperforming the market, but also its own overcrowded sector.
Apart from that trading was not very eventful. Korea Southern Power's new 18s were still trading close to re-offer spread, last seen at T+114bp. And the Itraxx IG index was at 108bp, about a basis point wider from 106/107bp yesterday.
"The market is waiting for the non-farm numbers. Treasury yields are higher there should have been some tightening but its not happening so there is a lot of rotation going on," said a Singapore-based credit trader.
Traders also mentioned concerns about the upcoming statement by Ben Bernanke once the FOMC meeting is over. The Fed ends a two-day policy meeting on Wednesday and Non-farm payroll numbers are due on Friday.
The underperformer was China Merchants, as it saw its bonds hit after Moody's revised the outlook on the company to negative from stable, as the agency expects the company's credit metrics to be hit by its 49% acquisition of Terminal Link for EUR400m and other major investments it made in late 2012. The China Merchants 2022s were seen at around T+ 254/243 at the close, some 20bp wider.
Sovereign cash bonds were down due to the rise in US Treasury yields. Philippines was down around a point and Indonesia was down 0.375 points.