January 23, 2018 / 9:00 AM / in 7 months

ASIA CREDIT CLOSE: Valuations tight as investors chase primary issues

SINGAPORE, Jan 23 (IFR) - Asian credit struck a cautious tone, as primary supply continued to mount and valuations remained tight in secondary trading.

“People are still chasing paper in primary because there’s not much available in secondary,” said a DCM banker.

The Asia ex-Japan iTraxx investment-grade CDS index was quoted 2bp tighter, at 62.25bp/62.875bp.

A Singapore-based private banker said many clients were still risk-averse and unwilling to rotate into equities, supporting bond prices.

“Singapore PB clients have only about 20% of their assets in equities and more than that in cash,” said the private banker.

The Philippines’ 2028 bonds were nearly a quarter of a point higher today, bid at 97.9 to yield 3.24%. They have slipped since pricing at par last Thursday.

Indonesia’s 2028s jumped half a point to 99.2, a yield of 3.59%, after the sovereign announced plans for a new US dollar sukuk offering at tenors of five and 10 years, or longer.

Korea Southern Power’s new three-year bonds, priced yesterday, tightened 6bp to Treasuries plus 84bp.

In high yield, Yingde Gases’ 2023 bonds were bid a shade higher at a cash price of 100.6 today, after S&P upgraded its rating to B from CCC+.

Country Garden’s 2025 bonds dropped nearly a quarter of a point after it pulled a Panda bond offering. The 2024s were bid at a cash price of 99.7 to yield 5.2%.

In high yield, HNA Group’s December 2018 bonds dropped a quarter of a point today to a cash price of 90.8, implying a yield of over 20% for an instrument with less than a year to maturity.

Anton Oilfield’s 2020 bonds were an eighth of a point higher at 105.6 after it gave an encouraging operational update for Q4 2017.

Reporting by Daniel Stanton; Editing by Vincent Baby

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