SINGAPORE, Nov 7 (IFR) - Asian financial markets held steady
at news that the closely-watched US presidential elections ended
with Barack Obama winning a second four-year term.
"There has been talk that Obama is bad and Romney is good
for the markets," said one credit strategist, "but in the
long-term Obama's win will be credit-positive. Romney's term
would have had been one of military confrontations on Iran and
pulling the quantitative easing moves that are being put in
place under Obama's watch."
For today, the mood seems to be more risk-on in Asia as
share prices were up in the region, atlhough the Nikkei was a
touch lower in the late afternoon hours.
In the credit markets, at least two deals from UTAC and
China Overseas are live while a couple have been announced.
China Oriental's proposed 10-year is indicated at 265bp and the
30-year at 290bp, which appear juicy compared with its
outstanding bonds. Its 2017s were quoted at 205bp/195bp and the
2020s at 210bp/200bp.
Credit spreads were unchanged with the Asia IG index still
at 113bp-115bp with no major movements in the more liquid
Bonds were also stable, with the best indicator seen in
Hutchison Whampoa's newly minted bonds. The 2017s were quoted at
137bp/133bp, flat to the issue price of 135bp over US Treasuries
and little changed from the 134bp seen yesterday afternoon.
The 2022s, which have performed better than the USD1bn
five-year bonds thanks to its smaller issue size of USD500m,
were quoted at 162/158bp, tighter than the 162.5bp they priced
China SCE rallied half a point up to 100.50 in the afternoon
session, although it had pushed higher on the break in the
morning to 101.75/101 after pricing at par yesterday. The small
size of just USD200m helped support the bid tone for the single
B rated credit in the secondary markets.
In the short-term, though, the markets will stay volatile on
eurozone debt issues and China's political developments but the
outlook for Asian credits look more optimistic next year.
"Ultimately, the Fed and ECB will keep the markets
underpinned," said the strategist.