HONG KONG, Oct 12 (IFR) - Asia credits were weaker on
Wednesday amid a selloff in Dim Sum bonds on a further
depreciation of renminbi.
"We felt that market sentiment was turning sour with overall
spread slightly wider today," said a Hong Kong-based
investment-grade trader. "There were concerns over US Fed rate
hike and bond supply looks still pretty heavy."
He also noted that funds were more cautious moving towards
the end of the year and were taking profit on early gains.
In the high-yield sector, Chinese property developers lost
ground after the announcement of a string of policy-tightening
measures on the mainland during the National Day holiday in a
bid to cool down property prices.
China South City's 6.750% 2021s were bid at 7.09%, while
Country Garden's 4.75% 2020s were bid at 5.21%, according to
Dim Sum bonds also took a hit after the renminbi touched a
fresh six-year low on Wednesday. Tianjin Eco-City 2018s were
spotted at 4.05% after being quoted at 4.0% on Tuesday.
"We believe that the CNH market is being used as a policy
tool, so CNH bonds may continue to suffer during the process of
RMB internationalisation," said HSBC in a recent report on
offshore renminbi bonds.
The iTraxx Asia ex-Japan IG Index was 1.34bp wider.
(Reporting by Ina Zhou; editing by Dharsan Singh)