Convertibles improve; China, tech names better on swap; energy quiet despite oil’s gains

By Rebecca Melvin

New York, Aug. 27 – U.S. convertibles saw pricing pick up on Thursday in virtually all names, including those that had been especially beaten down in the last week and a half. A number of China-based credits were better, and semiconductors continued to improve. Energy was also higher, but the sector remained relatively quiet despite a 10% surge in oil prices, market players said.

“It’s stronger across the board,” A New York-based trader said of the convertibles market.

A second sellsider said, “Everything was up out of the gate, and that didn’t change throughout the session.”

Most convertible paper was up 0.375 point to 0.625 point on a dollar-neutral, or hedged, basis, the sources said.

Among China-related convertibles Ctrip.com International Ltd. and Qihoo 360 Technology Co. Ltd. were better, as was SunEdison Inc., a sellsider said.

The technology sector, which has been somewhat resilient this week following last week’s slide, remained better on Thursday. Semiconductor company Nvidia Corp. was better, with the Nvidia 1% convertibles due 2018 trading up about 3 points to 123.5 bid, 124 offered against a stock price that rose 3.8% to $22.63.

But energy was quiet even though crude oil prices surged. West Texas Intermediate crude oil for October delivery jumped $3.87, or 10%, to $42.47 per barrel on Thursday after the contract had slumped into the high $30-per-barrel range on Wednesday.

Brent crude also jumped. It settled up $4.42 a barrel to $47.56, up 10%.

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