Ctrip.com jumps after earnings; Citrix, Microchip improve; energy at ‘indecision point’

By Rebecca Melvin

New York, March 20 – Ctrip.com International Ltd.’s convertibles jumped in active trade on Friday after the Shanghai-based internet travel site reported strong revenue for its fourth quarter and said it expects revenue to continue to rise in the first quarter.

The Ctrip bonds expanded about 2 points on a dollar-neutral, or hedged, basis even as the company’s shares surged more than 20%, a New York-based trader said.

Elsewhere, the technology sector was attracting interest and many names improved, especially the investment-grade or quasi-IG technology names, a New York-based trader said.

Red Hat Inc., Citrix Systems Inc., Twitter Inc. and Microchip Technology Inc. were mentioned as among those that improved on swap.

“We get the sense that the U.S. suddenly looks a lot cheaper to people than other markets like Europe after Telecom Italia SpA,” a New York trader said.

Telecom Italia priced a €2 billion sale of 1.125% seven-year convertibles at a 70% initial conversion premium on Friday.

“Italia was a €2 billion deal, and in converts that’s pretty relevant in the grand scheme of things,” he said.

Convertibles in the energy and health care sectors were notably quiet on Friday, a trader said.

“We’re at an indecision point in energy, whether crude breaks lower to $35 or bounces back to $50,” the trader said.

The broader markets were higher including oil prices Friday.

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