SINGAPORE, Feb 14 (IFR) - Despite ongoing thin liquidity
Asian credit markets had a more positive trading session today,
with bargain hunters picking up scraps of high-yield and long
Meanwhile high-grade has performed decently, albeit in the
context of rising Treasury yields, with the Asia IG space
roughly 5bp tighter since last Friday.
CDS is back to relatively normal liquidity with the IG
iTraxx index last at 110bp/112bp, for an unchanged level coming
up to the close.
Buying was reported in the perp sector by Singapore traders,
with the Reliance perp up a point at 98.5 bid and the Petron
perp bid up at 103 from its par reoffer just over a fortnight
ago. The Cheung Kong perp remains mired at the 92 level.
Regional DCM players continue to confront the "great
rotation" out of fixed income and into equity and are mindful of
the fund flow dynamic which saw USD25bn of inflows into equity
funds in January versus USD8bn into emerging market fixed income
Equally they are keeping a close eye on Treasury yields,
with high convexity paper looking an increasingly risky
proposition down at tight Treasury spreads and in a rising yield
As an example of this risk, the Triple A rated Temasek
30-year is down at an 89.5 bid despite having performed decently
in spread terms down to Treasuries plus 75bp, thanks to the soft
US Treasury price action.