Asian dollar bond spreads weakened slightly on Monday in caution ahead of Tuesday's policy meeting of the US Federal Reserve, with some expectations the central bank might drop the word "measured" from its statement. Trade was quiet in a shortened trading week, with Tokyo closed for a holiday on Monday and several markets due to close to mark Good FFriday at the end of the week "The market's been quiet, just slightly to the left side of the quote," said a Manila-based trader. "Most guys are squaring off going into the Fed meeting this week as well as the Easter holidays."
Market benchmark ports-to-telecoms conglomerate Hutchison Whampoa Ltd's widened by two basis points (bps) to 117/111 (bps) over comparable US Treasuries.
Rising oil prices and higher USTreasury yields have rattled sentiment in emerging market debt in Asia, affecting the issue plans of at least two dollar-bond offerings.
Last week, South Korea's National Agricultural Co-operative Federation (NACF) put off a $400 million, 10-year bond sale and Thai Military Bank delayed a 10-year bond issue of up to $250 million.
Dacom Corp, South Korea's second-biggest fixed-line operator, said it would decide on the sales date of $300 million in bonds "depending on the market situation".
The company is marketing the deal in the United States on Monday.
Indonesia is also promoting a $1 billion global bond, its second sovereign issue since the Asian financial crisis.
Indonesian Finance Minister Jusuf Anwar said late on Friday his country would delay the deal if the yield that investors demanded was pushed too high.
However, many analysts see the present sell-off as a buying opportunity.
"We think the recent sell-off has created an opportunity to get back into Asian bond market at more reasonable levels - something we have been waiting for the past few months," said J.P. Morgan in a research note.
The March 18 report recommends buying on declines into higher quality credits and with the return of stability in the market to buy into high-yielding credits with strong or improving fundamentals.
Analysts say a gradual pick-up in US Treasury yields is favourable for credit spreads, compared with a more volatile rise, but what could trip the market is any change in the language used by the US Federal Reserve.
A quarter percentage point rise in US interest rates to 2.75 percent is widely expected, the seventh in this cycle.
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