ASIA CREDIT CLOSE: Credits firm thanks to improved sentiment

Last Updated: Tue, Jul 22, 2014 16:00 hrs

HONG KONG, July 22 (IFR) - Both Asian credit and equities markets got a lift today as the market responded to a better-than-expected China MNI business sentiment index.

The index rose sharply for a fourth consecutive month to 58.2 in July from 55.0 in June. Hong Kong's Hang Seng Index ended 1.69% higher, near its highest point for the year.

The business sentiment report offers the first glimpse of Chinese data for July, suggesting third-quarter growth has started on a strong footing, according to Nomura. Strong activity data in June and higher-than-expected second-quarter GDP growth suggest that growth momentum has improved.

The Asian credit markets also benefitted to some extent from fund flows moving out of Europe in the wake of the downed Malaysian Airlines jet.

China high-grade bonds were well bid, while bonds from other Asian countries also were supported.

Indonesia's 2044s held on to levels of 5.51%/5.479% from 5.504% yesterday as candidate Prabowo Subianto withdrew from the race after denouncing the election process as undemocratic, according to Reuters. Indonesia's Pertamina's 2044s widened slightly to yield 6.308%/6.263% today from 6.298% yesterday.

India's Bharti Airtel 2024s strengthened to yield 4.805%/4.724% today from 4.819% yesterday. ICICI Bank's 4.8% 2019s were quoted at 3.579%/3.493% today from 3.589% at the close yesterday.

However, IDBI 5% 2019s were quoted at 4.28%/4.153% from 4.247% at yesterday's close. That was around 10bp wider than last week when the bank announced a roadshow for a USD Basel III-compliant bond via Citigroup and HSBC.

Sinopec's 2017s and 2024s were both 3-to-5 cents lower, quoted at 99.959/100.128 and 104.015/104.35 yesterday, respectively.

Country Garden's 2021s firmed slightly to yield 7.695%/7.561% from 7.767% yesterday, while Wanda Properties' 2018s rose 20 cents to 100.728/101.079 from 100.72 yesterday. Most Single B rated PRC property names, however, were weak.

More from Sify: