Morning Commentary: Convertibles improve ‘across the board;’ China names better on swap; Nvidia up

Rebecca Melvin

New York, Aug. 27 – U.S. convertibles saw pricing pick up in a variety of issues that had been beaten down in the market downturn earlier this week and last week. A number of China names were better, and semiconductors continue to move better, a New York-based trader said.

“It’s stronger across the board,” the trader said.

But “we’re still struggling to find a theme other than risk on, risk off,” the trader said.

Among the China-related convertibles that were better were Ctrip.com International Ltd.’s convertibles, including the newer C and D bonds, and the convertibles of Qihoo 360 Technology Co. Ltd.

These names were better on a swap basis by 0.375 point to 0.625 point, the trader said.

Among semiconductors, Nvidia Corp. appeared to be better, with the Nvidia 1% convertibles due 2018 trading early Thursday at about 123, according to Trace data. That was up about 3 points or so against a share price increase of 1.8%.

Equities were also higher. In economic news, the U.S. economy grew faster than estimated in the second quarter, with the U.S. GDP seen expanding at a 3.7% seasonally adjusted annual rate, according to the Commerce Department. Economists had forecast a 3.3% rate.

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