HONG KONG, June 3 (IFR) - Asian credits strengthened slightly in a relatively thin trading session today, as investors digested the better-than-expected Chinese PMI for May and news that the country’s central bank would make selective cuts to the required reserve ratio.
Investment-grade bonds gained around 2-3 points while high-yield rose by one quarter to half a point, even though US Treasuries were trading slightly weaker.
Chinese IG and HY bonds gained ground on the stronger PMI report as concerns over the economic slowdown and pressures on the real estate sector seem to ease.
Meanwhile, Indian IG names were unchanged, while Indonesian and Philippine bonds were stuck within narrow ranges.
The announcement of new Korea sovereign bonds, a 10-year in euros and a 30-year in US dollars, did not move the market much. But traders said that Korea spreads were already tight and the credit curve was quite flat. So, there was not much room for pickup.
Indonesian sovereign 2044s were a tad softer at 116.745/117.143 this afternoon from 117.835 yesterday. The Philippines’ 2034s moved in a similar direction to 128.998/129.493 today from 129.47 mid-price yesterday.
Bharti Airtel 2024s were quoted at 104.518/105.132 today from 104.803 yesterday. That meant around 224bp today from 270bp at launch.
CNPC 2019s were around 10-cents higher at 99.812/100.003 this afternoon.
Country Garden’s 2021s climbed up to 95.004/95.704 from around 94.8 yesterday. Wanda 2018s firmed at 100.528/100.872 from 100.73 yesterday. Newly issued Kaisa 2019s were at 100.996/101.327, much higher than 100.87 yesterday, on reports that authorities in more Chinese cities would relax restrictions on house purchases, something that could lift the mainland property market.