It was another active session across Asian Credit as we continue to consolidate, digesting the recent supply of new issues. In the IG space, China Oil and SOE names are seeing better demand despite the pullback in oil prices, while Internet names are seeing mixed flows . BBB Property and Asset Management names are seeing some profit takers after the recent spread tightening, while Noble is still seeing good retail demand as the curve continues to bounce off recent lows. India is seeing some investors lightening up, in both corps and banks, but any selling has been easily absorbed to prevent any widening.
It was a strong session in HY, with bonds generically up 0.25 – 0.5 points. Germantown was the big mover in the Chinese property sector as its bonds gapped up 2-5 points on news that SOE CCCG increased its stake to 28.9%. New 3-year China Aoyuan deal priced at 11.25% and closed up about 1 point from reoffer. Mongolia was very active after news of Mongolia and Rio Tinto Group settling a dispute over the expansion of the Oyu Tolgoi copper and gold mine, ending 2 yrs of often bitter negotiations. The Mongolian banks were up any where from 3-5 points! Elsewhere, Indon/Philly/ Indian corps were broadly unchanged on light flows.
INDICES
JACI IG -6.46bps to 184.4 (YTD range 180.3-214.7)
JACI IG Corp -5.2bps to 195.2 (YTD range 191-217.4)
JACI HY -0.01bp to 6.96% (YTD range 6.96%-7.89%)
JACI HY Corp steady at 7.11% (YTD range 7.11%-8.13%)
JACI Sovereign -10.23bps to 179.2 (YTD range 175.7-230.4)
CEMBI -9.2bps to 336.2 (YTD range 336.2-440.6)
EMBI Global -8.14bps to 363.2 (YTD range 358.6-454.8)
Itraxx Asia ex-Japan little changed at 105.125 (YTD range 97.3-123)
U.S. BofAML IG Corporate Master unchanged at 132 (YTD range 129-153)
U.S. High Yield Master II Index -3bps to 446 (YTD range 438-542)
U.S. CDX IG +0.72bp to 63.98 (YTD range 60.1 to 73.3)