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ASIA CREDIT CLOSE: Trading listless, despite strong Treasuries
August 5, 2013 / 9:19 AM / 4 years ago

ASIA CREDIT CLOSE: Trading listless, despite strong Treasuries

SINGAPORE, August 5 (IFR) - The typical listless summer trading mood prevailed today in the secondary Asia credit markets, despite the positive tailwind from a rallying Treasury market, following the release of the weaker-than-expected non-farm payroll data last Friday.

The IG complex moved in lockstep with Treasury yields, with prices marked up, but spreads largely unchanged from Friday. The iTraxx IG Index came in 4bp to 140bp/142bp on the day.

The India credit curve was around 10bp wider on Friday, as the continuing weakness of the rupee weighed on sentiment, but there was no evidence of value hunting in today’s session.

Bellwether Reliance 2018s was unchanged at Treasuries plus 255bp/245bp, with the wide bid offer a clear indication of the generally illiquid market conditions.

In step with the India complex, the new Indian Oil Corp bonds were unchanged on the day at plus 355bp/345bp.

Safe Korean FIG and corporate names, which were well liked on Friday, are closing out unchanged. The recent Korea Gas 2018s are closing out at plus 145bp/140bp and, like the sector, unchanged on the day.

Among recent new issues, the Poly Real Estate has had a standout day, pulling in 5bp to plus 217bp/207bp, having been issued last week at plus 235bp. The largely US-placed Baidu 2018s were in at plus 190bp, back at the reoffer spread.

China property credits had a listless day, but some showed price gains. The Country Garden 2023s are up a point at 94/95, with the rest of the sector unchanged to up a point.

Hopes that a continuation of the solid new issuance registered in July - a decent USD3.7bn versus just USD400m in June - are likely to be met with disappointment as the holiday season kicks in.

China Longyuan Power is in the market with a 3-year Reg S, which might be as much as we see in primary this week. Data releases are thin this week, with just China trade data set to come out on Thursday a potential Asian credit market mover, though holidays in Singapore and other parts of South-East Asia are likely to sap liquidity that day.

jonathan.rogers@thomsonreuters.com

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