HONG KONG, April 19 (IFR) - Asian credit markets continued
on a cautious note on Wednesday as geopolitical concerns weighed
on sentiment with Chinese names trading generally wider.
"Investment-grade China credits widened today with AMCs
(asset-management companies), such as Huarong, losing the most
ground," said a Hong Kong-based credit trader, citing potential
heavy supply from mainland issuers, as well as growing concerns
over financial risks in the country, as factors.
China's stock indices fell today for the fourth straight
session with the Shanghai Composite down 0.8% amid worries that
tighter regulations against speculation and shadow banking would
hurt the country's credit-fuelled recovery.
The Asia ex-Japan iTraxx IG index was 0.12bp tighter at
China Huarong's existing 2026s were quoted 7bp wider than
yesterday's closing price, while State Grid's 2026s were bid 2bp
wider. Both are meeting investors this week to discuss new
Korean names were also under pressure with Korea Resources'
new 2022s seen bid 4bp wider than its reoffer price.
In the high-yield segment, China Hongqiao's 2017s were bid
at 97.345 in cash price, little changed from yesterday's
closing, but off last Thursday's 98.
China Hongqiao's notes "have recovered a few points after
the company 'appealed' to the authorities for help, but may be
under pressure again after the resignation of Weiqiao Textile's
auditor", Lucror Analytics said in a note.
Yesterday, Weiqiao Textile, sister company of China
Hongqiao, announced the resignation of its auditor, E&Y, as the
company refused to engage an independent third party to
investigate the audit findings that were raised in March.
(Reporting by Ina Zhou; editing by Dharsan Singh)