SINGAPORE, Oct 23 (IFR) - Asian credit investors took a step back and started to take some profits and pare bullish positions after adding risk for 10 days almost without pause.
“I think the Street has gone too long, too fast,” said one trader in Singapore. The result was a day of better-selling across the board that saw some of the recent more successful new issues give up gains and the Asia ex-Japan iTraxx IG index end 3bp wider at 132bp/134bp.
While selling was widespread, investors were being picky. South Korean bonds, for instance, saw some pressure, but held better than the rest of the investment-grade sector, ending the day only 1bp to 2bp wider.
Other paper, such as the new ICBC Asia Tier 2 bonds, widened as much as 12bp in the session. Sinopec’s recently issued 10-year bond was also 3bp wider, quoted at 174bp, albeit still tight to the reoffer spread of 180bp.
The worst hit was the China Orient 2018s, which saw strong private-bank selling and ended the session some 8bp wider.
Amid all the selling, high-yield paper was holding its own with the most liquid bonds unchanged to 25 cents higher in price terms. Naturally, here were some underperformers, with Glorious Property’s 2018s standing out among them.
The bonds were last quoted at 83.00/84.00, when they were being quoted as high as 93.00 on Monday, after the company halted trading on its stock amid expectations that the chairman Zhang Zhi Rong will take it private.