Morning Commentary: Ctrip drops again outright and on swap; Sina lower; primary market quiet

By Rebecca Melvin

New York, July 8 – U.S. convertibles were weaker again on Wednesday as a slide in China-related names continued for the third day this week amid ongoing worries about the Greek debt crisis and China’s tumbling stock markets.

China’s Shanghai Composite index tumbled nearly 6% to 3,507.19 on Wednesday, notching a three-month low despite another round of government measures to support the markets.

Among those measures, the China Financial Futures Exchange raised margin requirements for shorting contracts on small-cap CSI 500 index and state-owned firms were ordered not to cut holdings in their listed companies.

In the United States, Ctrip.com International Ltd.’s 1% convertibles, or the C tranche, which priced last month, traded small around 93.75, a New York-based sellsider said, calling that issue down 0.75 point on a dollar-neutral basis.

The Ctrip 1.99% convertibles traded at 92.5.

Shares of the China-based travel services site were down $2.00, or 3%, at nearly $69.00.

Sina Corp.’s 1% convertibles due 2018 traded at 92.125, which was down from 93.5 on Tuesday, according to Trace data; and YY Inc.’s 2.25% convertibles due 2019 traded at about 87, which was down from about 88 on Tuesday and 89 on Monday.

The U.S. primary market was quiet again, having failed to restart after the July 4 holiday weekend. It was unlikely an issuer would attempt to bring a deal in this environment, a New York-based trader said.

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