Morning Commentary: Red Hat, NXP improve; convertibles action dampened by broader market flux

By Rebecca Melvin

New York, Jan. 6 – Red Hat Inc. and NXP Semiconductors NV were both slightly better early Tuesday as certain issues remained the beneficiary of the lower stock prices of recent sessions, but turbulence in the broader markets generally kept a lid on convertibles market action, according to a market source.

Nevertheless, a second source said that the convertibles trading volume by 11 a.m. ET felt “kinda normal.” He reported $137 million of bonds having changed hands as tallied by Trace market data.

Red Hat’s 0.25% convertibles, which priced Oct. 1, were seen at 118.875 versus an underlying share price of $68.33 early Tuesday, the source said.

NXP Semiconductors’ convertibles were quoted at 101.25 versus an underlying share price of $73.89, a trader said.

In the broader markets, oil prices continued to plunge, equities fluctuated following a sell-off on Monday and the U.S. 10-year Treasury bond was up.

Chesapeake Energy Corp.’s 2.5% convertibles due 2037 (cusip:165167BZ9) traded little changed at lower levels of about 96.375 with shares lower after BofA Merrill Lynch downgraded shares to “underperform” from “neutral.” The bank’s analysts cited the Oklahoma City-based energy company’s dependence on a recovery in natural gas and oil pricing for the downgrade and stock price target cut.

Chesapeake shares were down 49 cents, or 2.7%, at $18.00 at late morning.

© 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.