November 7, 2016 / 8:57 AM / in a year

ASIA CREDIT CLOSE: Sentiment improves after FBI clears Clinton

HONG KONG, Nov 7 (IFR) - Sentiment in Asia credit markets improved on Monday, but trading remained thin, after a statement from the FBI that no criminal charges were warranted against Democratic US presidential candidate Hillary Clinton.

Stocks rallied in the region with Japan’s benchmark Nikkei average closing up 1.61% and Hong Kong’s Hang Seng Index 0.8% higher at the time of writing.

“Asian credit started this morning stronger than last Friday as FBI’s conclusion settled part of the uncertainty surrounding the election race, but, overall, trading remained quiet,” said a Singapore-based credit analyst.

Traders said most investors stayed on the sidelines ahead of US election. Bank of China’s new 2019s and Huishang Bank’s AT1 were spotted hovering around reoffer prices.

In the high-yield segment, Chinese developers’ US dollar bonds were little changed on Monday after heavy sell-offs last week.

“Recent issuers particularly took a hit last week due to policy tightening on PRC developers, but they started to stabilise today, ” said a Hong Kong-based HY trader.

The iTraxx Asia IG index was about 2bp tighter. China South City’s 2021s were quoted at 97.05, according to Tradeweb.

The notes were traded down 0.6pts last week after S&P put the issuer on creditwatch negative due to a potential change in its major shareholder.

Reporting by Ina Zhou; editing by Dharsan Singh

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