Morning Commentary: Indonesia sukuks put in strong performance; other Asian bonds tighten a touch

By Christine van Dusen

Atlanta, March 23 – The strong performance of Indonesia’s new two-tranche deal spurred a modest risk-on tone on a Friday morning that saw investors anxiously awaiting the vote on the American Health Care Act.

“Yesterday’s vote on the American Health Care Act, which has been postponed to today, will keep markets in suspense,” a London-based analyst said on Friday morning. “At this point, it remains unclear whether advocates in favor of the bill have garnered sufficient support and any failure to do so might raise doubts on further reform pledges.”

Trading of Asian bonds was mostly light on Friday morning, “although sentiment definitely felt better, with some more conviction-buying following London open,” a trader said. “Despite that, volumes were again low.”

Most of the limited action took place among Chinese assets, he said, with other Asian names finishing unchanged to 2 basis points tighter on thin liquidity.

Activity picked up slightly during the Asian afternoon, another trader said.

The trader noted seeing “an uptick in client demand, with buyers mostly in the five-year bucket, with bonds clearing at yesterday's level. Indian banks were unchanged.”

The Philippines curve was also unchanged, with spreads only a touch tighter, he said.

But Indonesia’s new deal did manage to receive attention and put in a “strong performance,” another trader said.

The sovereign on Thursday priced $3 billion in two tranches of Islamic bonds due in five and 10 years with $1 billion 3.4% notes due 2022 and 4.15% notes due 2027 both pricing at par.

Deutsche Bank, HSBC, Mandiri Securities, National Bank of Abu Dhabi and Standard Chartered were the joint bookrunners for the Rule 144A and Regulation S deal. Bahana Securities, Danareksa Sekuritas and Trimegah Sekuritas Indonesia were the co-managers.

“The new five-year sukuks traded to highs of 100.60 with mix of accounts adding while Middle Eastern accounts took profit,” he said. “The 10-year sukuk bonds were clearing 100.30 most of the day.”

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.