Market rallies on Greece progress but Asian bonds stay ‘defensive’; EM roadshows ahead

By Christine Van Dusen

Atlanta, June 22 – Many emerging markets bonds were quiet on Monday morning, with unchanged spreads, before Europe’s markets opened on strong footing amid hopes that the situation in Greece would be solved soon.

Investors are “complacent about the risk of contagion spreading from Greece to global markets” because “Greece is small and buffers are now in place to limit contagion,” according to a survey from Barclays Research.

“Most investors view the sell-off in core bond markets as a positive development with limited follow-through,” the report said. “For most credit investors, the move higher in government yields has made both investment-grade and high-yield credit more attractive.”

Still, the tone for investment-grade bonds from Asia was “very defensive, with sellers into the rally,” a London-based trader said.

“Most of the buying interest we saw was out of Europe while Asia was skewed to slightly better selling,” he said.

Cnooc Ltd.’s 2025 traded up at 155 basis points before settling closer to 153 bps he said.

“Banks were mixed,” he said. “Korea closed unchanged, India unchanged as well. But the tone is improving, with buyers and a bit of short-covering.”

In deal-related news, several issuers were on or planning roadshows, including China Life Insurance Co. Ltd., Mongolia, China’s Tianjin Binhai New Area Construction & Investment Group Co. Ltd. and Kazakhstan.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.