SINGAPORE, May 7 (IFR) - A 14bp rise in the yield of the
10-year US Treasury since Friday prompted spread investors to
pile into the market as some covered shorts and others picked
up bonds at lower prices on hopes that they would rally again.
Spreads were tighter across the IG universe with some single
names logging 25bp moves from Friday's levels.
ICICI 2020s, for example, were bought today for 207bp over
US Treasuries, and were being quoted at 230bp/225bp on Friday.
"The market has gone technical after the Treasury move," said
one IG trader.
There was also a solid bid for anything Malaysian, as
investors rushed to add weight on names from that country after
the election uncertainty had been settled.
The 2019s of Petronas, for instance, were being bid at
135bp, whereas, on Friday, they were bid at 155bp. Traders also
said there were a lot queries for Maybank's bonds, although
anyone who owned them was unwilling to sell.
The 2022s of Hutchison Whampoa were also bid at 149bp over,
some 9bp tight to Monday's open of 158bp, in spite of the
announcement that the issuer would price a euro-denominated
hybrid bond today.
Recent South Korean issues, which had underperformed until
now, were also much tighter. The 5-year bonds of Korea Resources
and Daegu Bank were quoted at 147bp and 146bp, respectively,
over US Treasuries, both about 7bp tighter.
Meanwhile, high-yield trading was subdued as investors
focused on the investment-grade issues. One analyst said there
was hardly any movement and there was, at most, some screen
In that context, traders were marking their spreadsheets
with bonds about 10ct-25ct higher across the board, based mostly
on their assumptions of where the bonds should be traded.