HONG KONG, March 29 (IFR) - Asian credit markets continued on a constructive path on Wednesday, though there was volatility in Fosun International’s notes following surprising news of a management reshuffle at the Chinese conglomerate.
“Market sentiment remained positive today with spreads slightly tighter. However, we also saw a bit of profit taking,” said a Hong Kong-based investment-grade credit trader.
The iTraxx Asia investment-grade index, which has rolled into Series 27, was 1.7bp tighter at 93.8/95.3bp. China Cinda’s 3.0% 2020 notes were 3bp tighter at 129.3bp over US Treasuries.
In the high-yield sector, another credit trader observed that there was some initial selling in Fosun International’s recent 2022s in the morning, but that the notes later recovered to cash price of around 101.5.
Fosun International announced last night the resignation of two top managers after reporting 2016 net profit growth of 28% year on year.
Liang Xinjun resigned as vice chairman and chief executive of the company for health reasons, while senior vice-president Ding Guoqi also stepped down.
Property developer China Evergrande’s 2018s were bid at a cash price of around 104, according to Tradeweb. The developer reported that its 2016 core profit jumped 89% year on year to Rmb20.81bn, thanks to strong increases in property prices and volumes.
Reporting by Ina Zhou; editing by Dharsan Singh