Philippine sovereign bond prices rose on Tuesday, spurred by investor appetite for riskier assets and the government's plan to tap loans from multilateral lenders, which could reduce its borrowing next year. The Philippines' 6.5 percent bond due in 2020 was trading half a point higher at 103.375/103.875 cents on the dollar, a Manila-based trader said. The bond has gained sharply from its issue price of 99.065 in July this year.
Manila plans to borrow more than $1 billion in program loans from the World Bank, Asian Develoment Bank and Japan International Co-operation Agency in 2010, Philippine newspapers reported on Tuesday. "It's a reflection of improved risk appetite and better sentiment in the region. Global equities are up, driving local players to buy bonds," a trader from Manila said. "The government's bond sales may also be lower next year than this year because of the program loans."
The Philippines, one of Asia's most active debt issuers abroad, sold $2.25 billion of dollar bonds this year. It is in talks with the Japan Bank for International Co-operation to guarantee it's planned $1 billion Samurai bond sale. In the overall market, the Asia ex-Japan iTraxx investment-grade index was steady at 131/135 basis points (bps) as investors await new Asia corporate issues, traders said. The index is hovering near its lowest level since August 11 posted on Monday.
Investors were keeping an eye on Hutchison Whampoa's new issue, which will be priced later in the day, traders said. Hong Kong ports-to-telecom conglomerate Hutchison Whampoa is selling global bonds due in six years and 10 years and would be priced during New York trading hours, a source close to the deal said. Hutchison Whampoa's five-year CDS was flat at 90/95 bps, traders said. The MSCI index of Asia-Pacific shares outside Japan was up 0.8 percent as of 0353 GMT. South Korea's five-year credit default swap (CDS) was steady at 132/137 bps, traders said.