February 5, 2015 / 8:19 AM / 3 years ago

ASIA CREDIT CLOSE: Greece weighs on trader sentiment

HONG KONG, Feb 5 (IFR) - A surprise People’s Bank of China move last night failed to spark much life into equity markets today as many Asian indices finished lower.

The PBoC’s 50bp cut in the reserve requirements of the country’s largest banks will release Rmb600bn (USD96bn) of liquidity into the market in an effort to support slowing Chinese GDP.

However, the Shanghai and Taipei exchanges were mostly flat, while the Nikkei fell nearly 1%. The Hang Seng Index was up, albeit only a quarter of a point.

Yields on Chinese 10-year bonds were also flat, and the iTraxx IG Asia index was quoted 2bp wider at 110bp/112bp. Sovereign CDS was 2bp wider, as Greece-related sentiment continued to spook traders.

It was a busy day for corporate bond issuance with a number of names hitting the market, but performances in the secondary were mixed. Tencent Holdings priced its first USD900m 10-year bond at 205bp over US Treasuries with a 3.8% coupon.

It also offered a USD11.5bn 5-year that yielded 162.5bp over Treasuries with a 2.875% coupon. The 10-year traded 10bp tighter, but the 5-year was 3bp wider.

Traders described the session as relatively quiet with much attention on developments in Europe, particularly Greece.

“It was a bit weaker today,” said a Singapore-based credit trader. “We’re still waiting for news out of Greece, as usual, and Europe is still driving sentiment. The new deals didn’t perform that well today partially because of that.”


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