Midday Commentary: Activity broadens out; volume still light; MGM, Exelixis gap higher

By Rebecca Melvin

New York, Jan. 7 - Trading in the U.S. convertibles market was broadening out early Tuesday in terms of the number of different names changing hands, but volume was still thin, market sources said.

The U.S. convertibles primary market was still quiet as has been the case since before the Christmas holiday.

MGM Resorts International's 4.25% convertibles due 2015 were up by about 4 points on an outright basis with the underlying shares up also 4%. A New York-based trader said the last market on the MGM convertible was 140.974 versus a share price of $24.42.

The stock and bonds of the Las Vegas-based casino operator appeared to be buoyed by a Nomura Securities report that said Macau gaming stocks could see a significant improvement this year and raised its price targets on a few stocks, including MGM.

Nomura said that a growing diversity of attractions in Macau beyond just gaming is generating more business from mainland China.

Elsewhere, trading volumes were still light.

"It's still a bit quiet out there," a trader said.

But Exelixis Inc. shares jumped in early action after an upgrade by Piper Jaffray to "overweight" from "neutral," and the Exelixis 4.25% convertibles due 2019 also jumped with a print at 138.885, which was up nearly 8 points on the day, according to Trace data.

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