SINGAPORE, Jan 2 (IFR) - News in the morning that the fiscal
cliff crisis in the US has been averted for now pushed Asian
financial markets higher, but credits lagged equities which are
sharply higher in Asia. Korean shares are at a nine-month high,
but in Asian credits, liquidity remained very thin.
"It's very quiet out there," said a debt syndicate banker.
"We are only seeing a few bids and offers but nothing has been
done. It looks like players are testing markets and levels on
the first trading day of the new year, and are just waiting for
Europe and New York to open for fresh leads."
The iTraxx IG index was heard at 108/110bp with levels
moving towards the tight end of the range as the afternoon
session wore on. Sentiments are biased to the cautious optimism
with China's December official manufacturing PMI coming in at
50.6, although the HSBC PMI released on December 31 was a
stronger 51.5, indicating that the economy was slowly picking
A resolution the US fiscal cliff talks will add a positive
spin to the markets, although a decision on spending cuts will
be delayed by two months.
"You are going to see a rush to the markets over the next
two months as issuers try to push into this window," said the
Cash bonds inched about 1bp higher although the bulk of the
bonds were unchanged.
"The markets are expecting supplies pretty soon, and street
talk is that China property names are looking around," said one
trader. Names being bandied about included Country Garden and
DCM bankers are likely to wait for how European and US
markets react to the fiscal cliff resolution before taking the
next step. If the markets react positively and stay stable,
deals could be launched as soon as tomorrow, and that could
spark some life into the moribund secondary markets.
As it is, the last deal that was sold in 2012 - the Zoomlion
2022s are at 101.5/101.3, up from its reoffer price of 98.625.
Shui On perps have also rallied to 103.25/104 from its issue
price of 101.25.