Philippine bonds weaken, broader market steady
May 23, 2009
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Philippine dollar bonds snapped a three-day rally on Friday as investors locked in profits following a fall in US shares overnight in an otherwise steady Asian market.
The Asia Itraxx investment-grade index excluding Japan was steady at 196/201 basis points, a Hong Kong-based trader said.
"There is still a certain appeal for the high-grade sector," a Singapore-based regional analyst said.
"Investors are encouraged by views that the worst of the global recession is behind us and we are seeing an easing of the risk aversion that was prominent a few months ago.""While the first quarter is pretty grim, there is a growing consensus that the global economy and the economies in the region will recover in the second half." But the market is expected to trade cautiously in the coming sessions amid in anticipation of more sales from South Korean firms such as Korea Hydro and Nuclear Power, traders said.The MSCI index of Asia-Pacific stocks outside Japan was up 0.6 percent as of 0326 GMT.The following were the major movers in cash bonds and credit default swaps (CDS): Philippines dollar bonds as investors used a fall on Wall Street on Thursday as an excuse to lock in profits from the three-day rally.
The country's 8.375 percent bond due in 2019 was trading at 115.375/115.75 versus 115.750/116.375 on Thursday, while the nation's five-year CDS widened to 225/240 bps from 215/240, the trader said.PSALM's newly-issued debt due in May 2019, which attracted a lot of interest in the last two sessions, fell 101.00/101.25 from 101.50/101.75, the trader said.
The 10-year bond was sold on Tuesday at 99.127.
South Korea's five-year CDS widened by 15 bps to 147/157 ahead of new issues from local companies, traders said.
Korea Gas Corp and Korea Railroad are also planning to issue global bonds.
Copyright Reuters, 2009
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