Credits trade in narrow ranges amid weak sentiments

SINGAPORE: Asian credits were broadly flat to Wednesday´s levels after a weak morning session drew out investors to pick up better yielding paper.

New issues were mixed and Asian equities slipped following overnight losses in US equities.

Asian shares fell for the seventh consecutive day as investors fretted over mixed economic data.

China´s latest data today showed the services sector expanded at a slower pace last month, while its April PMI was at 51.8, down from 52.2 in March.

The long Golden Week holidays in Japan also dampened sentiment, said traders.

"It´s kind of quiet and there is not much going on, which is kind of odd, but, perhaps, it´s due to Japan being on holiday," said one high-yield trader.

Nevertheless, there were still some balanced two-way trades.

High-yield credits were generally unchanged, though some good buying was seen in Vedanta notes, which had lost 2-3 points yesterday.

The 2019s were quoted at 79.5/80.5, while the 2018s were hovering at around 89.75/90.75.Bonds were also changing hands in the Chinese property segment, with prices sliding about an eighth to a quarter of a point.

However, Yanzhou Coal´s announcement that it was buying back up to US$300m of its outstanding 2017s and 2022s offset some of the slide.

Some PBs were seen buying Evergrande´s bonds, with the 2018s indicated at 97.6/98.6In the high-grade sector, Tianjin Rail Transit´s dual-trancher put in a mixed performance.

Its 2019s, priced yesterday at 162.5bp over 3-year US Treasuries, widened to 166bp, but its 2021s were indicated at reoffer spreads of 182.5bp.

ICBC Singapore saw its 2019s rally to 105bp, despite views that the bonds had priced tight at 110bp over 3-year UST on Tuesday.

Sinopec´s 2021s were seen at 137bp/134bp and the 2026s at 177bp/173bp, while the 2046s were quoted at a wide range of 158bp/148bp.