Morning Commentary: Pinduoduo convertible notes on the rise in early trading

By Abigail W. Adams

Portland, Me., Nov. 29 – While the convertibles primary market remained dormant early Tuesday, there was an uptick of activity in the secondary space with topical news and end-of-month cleanup sparking activity in certain names.

Equity indexes were wobbling between positive and negative territory following Monday’s sell-off with the Dow Jones industrial average down 4 points, or 0.01%, the S&P 500 index up 0.10%, the Nasdaq Composite index up 0.07% and the Russell 2000 index up 0.68% shortly before 11 a.m. ET.

There was $97 million in reported volume about one hour into the session with a wide range of names on the tape, a source said.

While domestic unrest in China contributed to the sell-off in equities on Monday, Pinduoduo Inc. bucked the trend with its American Depositary Shares making strong gains after a large earnings beat.

The Shanghai-based e-commerce company’s 0% convertible notes due 2025 were not active on Monday but were moving early in Tuesday’s session with the notes up on an outright and dollar-neutral basis.

The 0% convertible notes rose 2 points outright to trade at 93 with the yield 7.39%.

There was $5 million in reported volume.

Pinduoduo’s ADSs were changing hands at $79.20, an increase of 6.95%, shortly before 11 a.m. ET.

The company’s equity is up more than 20% since reporting earnings prior to the market open on Monday.

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