SINGAPORE, Feb 2 (IFR) - Bonds in the Kaisa Group complex continued their wild swings, as a bounce attributable to Friday’s report that Sunac would buy a 49% stake from former chairman Kwok Ying Shing turned out to be wide of the mark.
Instead, Sunac has agreed to buy 4 Shanghai projects, either in whole or in part, from Kaisa for CNY2.37bn (USD380m).
While a useful cash injection, this does not remove the overhang resulting from the Chinese authorities putting a freeze on Kaisa’s Shenzhen properties, and investors see it far less positively than the “white knight” rescue they had expected.
The bonds fell 15-20 points first thing this morning, but recovered to trade 7-8 points lower than Friday’s close. The 2018s were seen at 66/69.
Then, Glorious Property Holdings suspended its shares, saying it was about to make an announcement regarding a possible privatisation of the company by its controlling shareholder.
That spurred private banks to buy its bonds. Investors might remember that the chairman said the same thing in 2013. The 2018s were seen at 58/59, though there seemed to be little trading activity.
Overall, the high-yield property sector was down 0.50-0.85 points.
Besides that, secondary trading was generally as quiet as the primary flow, with investment-grade credits range bound. “Everyone is waiting for new issues,” said one trader.
The Asian IG iTraxx was 3bp wider at 113bp/115bp, while the Australian and Japanese indices were 2bp wider each at 98bp/99bp and 65bp/67bp, respectively.