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ASIA CREDIT CLOSE: Illiquid secondary market in Asia ahead of US election

SINGAPORE, Nov 5 (IFR) - Asia's secondary credit market wascharacterized by thin trading and illiquidity, with few playerswilling to put on new bets ahead of tomorrow's US presidentialelection.

There was a slightly weaker tone despite solid non-farmpayroll data released on Friday, with the Series 18 iTraxx indexout by 1bp to a 116bp mid.

Betting websites are calling for an Obama victory tomorrow,something which might prompt a short-term selloff given thegeneral thinking that he might be challenged in dealing with thelooking US fiscal cliff.

The focus remains on the primary market, with Hutch'splanned 5 and 10-year Global attracting solid demand north ofUSD4bn and the pricing outcome likely to set the tone over theshort term.

Signs remain of resistance at the tight levels which havebeen put on recent new deals, with last week's 5 NC 3 and 10 NC5 print for Soho China bid down at 99.1 and 99.55 respectively.Still, with USD25bn printing in the US market over last Thursdayand Friday and funds continuing to flow into to debt funds, themarket appears to remain in a solid underlying state.

With that creating something of a headwind for the Chinaproperty sector it will be interesting to see how Deutsche andHSBC go about pricing a planned trade for developer China SCE. Alikely comp is the Yuzhou 2017, which was last at the 11.2%mark, having priced last month at 11.75%.

In the meantime there has been some two-way flow in the Bumidue 2017s, which added a point today to 77 bid on speculation ofa counter offer for the company from Nat Rothschild.

The price gain follows a two point loss on the paper lastweek, partly as a result of ongoing rumours of financialmismanagement at the company and partly as the result of poorthird quarter performance in the Indonesian coal sector. Thishurt the Adaro 2019s which lost a half to 110.5, while the Berau2017s are unchanged.

jonathan.rogers@thomsonreuters.com

Keywords: MARKETS ASIA DEBT/