October 13, 2016 / 8:11 AM / 10 months ago

ASIA CREDIT CLOSE: High-grade bonds stay resilient amid weak sentiment

SINGAPORE, Oct 13 (IFR) - Asian credits were a touch weaker as sentiment turned negative amid declining equities across the region after China printed disappointing trade data.

China's exports fell a sharper-than-expected 10% year on year in September, fuelling concerns of a slowing economy in Asia's biggest market.

MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.2%.

Thai stocks sank 2.4% amid growing concerns about the health of the 88-year-old King Bhumibol Adulyadej. The kingdom's 5-year CDS widened between 5bp and 15bp earlier in the day with the level at 98bp/104bp in mid-afternoon.

Outstanding US dollar bonds of Thai issuers were around 5bp-10bp wider, although Kasikornbank's recently priced 2022s were holding up at 100.159.

"The Thai bonds look optically wider, but you can see buying opportunities, too," said one trader.

"Its economy is still strong and it has got solid US dollar onshore funds, while foreign holding of Thai government bonds is low at 15%. Fundamentals remain strong there."

The broader high-grade bonds stayed resilient, while the high-yield notes were a quarter of a point lower.

Tenaga's new due 2026s were indicated at around 147bp over Treasuries, slightly wide of reoffer spread of 145bp.

Credit spreads were about 1bp wider with the iTraxx Asia investment-grade index at 101bp/103bp.

Reporting by Kit Yin Boey; editing by Dharsan Singh

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