HONG KONG, Jan 11 (IFR) - Asian credit markets had a constructive session on Wednesday with new issues, such as the notes of New World China Land, tighter in the secondary market.
“Flows were not particularly strong today, but the overall tone was constructive,” said an investment-grade trader. He noted that Hong Kong-based bank treasuries and insurers were seen buying notes of 10 years.
“From late last year, the market has been flush with short-dated bonds from Chinese local government financing vehicles, creating demand for long-dated notes as curves deepened,” he said.
Activities related to mainland investors have yet to pick up, observed a Hong Kong-based credit analyst, saying “mainland banks tend to put their money in short-term products, such as CDs, before the Lunar New Year”.
This, he said, would give them more flexibility when demand for cash withdrawals rose at Lunar New Year.
The iTraxx Asia ex-Japan IG was little changed at 115.500/117.500. CITIC’s 2021s were bid at 113.62, according to Thomson Reuters data.
New World China Land’s US$600m new issue tightened to T+235bp. The unrated 10-year issue was reoffered at Treasuries plus 237bp yesterday.
China Aoyuan’s 2020s were bid at 100.67, according to Tradeweb.
Reporting by Ina Zhou; editing by Dharsan Singh