Morning Commentary: Convertibles quiet amid volatile shares; Alcoa mandatories little changed

By Rebecca Melvin

New York, Oct. 9 – Convertibles were quiet early Thursday as market players watched equities begin to sell off again following two days of whipsaw action, including Wednesday’s rally.

“No one is doing much of anything; everyone is feeling pretty whipsawed,” a New York-based trader said of market action.

Alcoa Inc.’s 5.375% mandatory convertible preferreds were mostly quiet after the New York-based aluminum producer reported strong quarterly results after the market close.

The Alcoa preferred was at 49.375 in early going, while the common opened higher but sold off by late morning.

“Alcoa is going to be added to the PFF preferred stock index, and people are waiting until that happens,” a trader said by way of explaining light trade in that name.

Sesa Sterlite Ltd.’s 4% convertibles, which mature at the end of this month, were seen at 99.5. The American Depositary shares of the Indian natural resources company were up 0.9% at $16.87 but still near lows notched during a slide that started last month.

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