Asian bond spreads narrowed on Thursday helped by a continued flow of investment funds looking to lock in higher yields, traders said. "As we have seen in the last couple of days, there is still a lot of money on the sidelines. It's a chain reaction, people want to put their money to work rather than be left out again," a regional analyst said.
The Asia Itraxx investment-grade index excluding Japan narrowed to 195/200 basis points from 200/210, a Hong Kong-based trader said. However, the index may widen in coming sessions under pressure from rising supply as more companies sell debt overseas, the analyst said.
Korea Hydro and Nuclear Power, a unit of South Korea electricity provider KEPCO, is considering a dollar bond sale in the first half of 2009, a company source said. State-run Korea Gas is planning to issue a dollar bond worth about $500 million in June, a source said.
The following were the major movers in cash bonds and credit default swaps (CDS): Philippines' cash bonds gained for a third day, with strong interest seen on Psalm's newly-issued debt, a Manila-based trader said. Psalm's bond due in May 2019 was trading at 101.50/101.75 from 101.125/101.375 on Wednesday. The debt was sold on Tuesday at 99.127. The country's 8.375 percent bond due in 2019 was range-bound at 115.750/116.375, while the nation's five-year CDS narrowed to 215/240 basis points from 230/250.
SOUTH KOREA's five-year CDS tightened by 15 bps to 130/160, as sentiment rose after central bank data showed the country's net foreign debt fell in the first quarter. Latest major ratings activity in Asia (excluding Japan) on Moody's may cut Asia banks on ltd govt support S&P upgrades Neo-China to CC; outlook negative Fitch places Taishin Group and KGI Sec on RWE.