Asia credit card close: Dealers lighten up for the holidays - IFR

Dec 13 2012, 21:36 IST
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Credit cards. (Agencies) Credit cards. (Agencies)
SummaryCredit markets in Asia are quickly entering holiday mode!

Credit markets in Asia are quickly entering holiday mode and the session was dominated by positioning for the illiquid markets that will prevail in the next two weeks.

While there was some two-way flow across the board, traders reported that dealers were taking every opportunity to get rid of paper.

"Bids were getting smacked just because people are reducing inventory," explained one trader in Singapore.

Given the nature of the activity, Philippines and Indonesia were among the most active – and the most sold as well.

The two are the most liquid credits in the region these days.

Most bonds from the Philippines ended around 65ct weaker while Indonesia's benchmarks lost some 35ct on average.

Part of that move, however, was attributed to the sharp widening in yields suffered by US Treasuries overnight on the back of the announcement that the Federal Reserve was increasing its monetary easing efforts.

The yield on the 10-year US Treasury widened some 5bp since yesterday morning.

On the CDS front, however, the tightening trend continued and the Asia iTraxx ex-Japan IG index closed the session today 2bp tighter at 109bp/111bp.

High-yield saw lacklustre activity with buying intentions balancing out sellers.

The asset-class ended up mostly unchanged, according to a trader in Hong Kong, who said trading was subdued and did not focus on any particular names.

Zoomlion's five-year bonds ended unchanged at 106.50/107.50, even as the Chinese machinery producer marketed a new 10-year bond at 6.25% via sole lead Goldman Sachs.

The deal is expected to be completed tonight.

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