HONG KONG: Asian credits widened on growing concerns over global economic prospects as oil names sold off amid tumbling oil prices.
Brent crude futures fell 0.7% to US$32.48 per barrel, extending losses so far this week to more than 6%.
"Falling oil prices intensified worries that fundamentals at the oil companies will get even worse, and that affected the overall sentiment," said a Hong Kong-based credit trader.
"Despite some flow from Chinese investors after an initial sell-off, overall spreads widened around 10bp for Chinese major oil names."
The iTraxx investment-grade Asia ex-Japan was quoted 2bp-3bp wider at 158.33/160.33. CNOOC 3.875% 2022 US dollar bonds widened to 3.398%.
Bonds of Chinese property developers failed to rally on Beijing's latest policy stimulus.
China announced late yesterday that it would lower minimum down-payments on mortgages in cities other than Beijing, Shanghai, Guangzhou and Shenzhen, in a move to support the property market.
"We welcome the new rules, but are concerned that the changes will not be enough to stimulate demand in T3/4 (Tier 3 and 4) cities, given population flows," said Lucror Analytics in a research note.
Country Garden 7.50%2023 US dollar bonds were about 10 bp wider at 7.216%.
Baosteel 3.875%2020 US dollar bonds moved out 20bp to 3.73% after S&P cut its credit ratings on the group to BBB+ from A- on Monday.
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