Asian bond spreads widened on Wednesday, tracking weakness in stock markets on heightened risk aversion, while the newly-issued bonds from Export-Import Bank of Korea (KEXIM) were little changed. The Asia iTraxx investment-grade index excluding Japan widened to 200/205 basis points (bps) from 188/192 on Tuesday, a Hong Kong-based trader said. The spread has widened by 10 to 12 bps since Friday.
Unlike US or Japanese government debt, most Asian bonds are riskier assets that benefit from improved risk appetite. The MSCI index of Asia-Pacific stocks outside Japan was down 1.9 percent as of 0343 GMT. Following are the major movers in cash bonds and credit default swaps (CDS):
South Korea's five-year CDS widened to 190/200 bps from 185/189, traders said. KEXIM Bank's bonds sold on Tuesday were steady, traders said. The lender issued $1.5 billion worth of 5-1/2 senior notes with a coupon rate of 5.875 percent to yield 5.999 percent or 362.5 bps over comparable US Treasuries.
State Bank of India's five-year (CDS), considered a proxy for India's sovereign CDS, widened for a second day to 185/200 bps from 175/190, reflecting the market's apprehension over the wider than expected budget deficit, traders said.
Philippines' cash bonds fell for a fourth day, with the country's 8.375 percent debt due in 2019 trading at 113.25/113.50 from 113.50/113.75, a Manila-based trader said. The nation's five-year CDS widened to 230/250 bps from 225/230. Indonesia's five-year CDS was flat at 310/335 bps as the country holds a presidential election on Wednesday.
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