Primary hosts China Aoyuan Property, ICBC, Hsin Chong; Treasuries weaken; oil rallies

By Christine Van Dusen

Atlanta, May 18 – China Aoyuan Property Group Ltd., Industrial and Commercial Bank of China Ltd. and China’s Hsin Chong Construction Group Ltd. sold notes on Monday as Treasuries weakened and oil continued to rally.

“We still wait for the supply in emerging Europe, the Middle East and Africa to pick up,” a London-based trader said.

From Latin America, Brazil-based Petroleo Brasileiro SA was in the news on Monday after beating analysts’ estimates for first-quarter earnings, which sent the company’s bond curve tighter by about 15 basis points, another trader said.

Chile-based Cencosud SA saw the bid continue to strengthen on its curve, with buyers appearing sporadically throughout Monday’s session, he said. The 2021s, he said, were the toughest bonds to source.

Low-beta spreads from Latin America fared well, another trader said, and tightened slightly on Monday.

Cash prices held up well in the face of weakening Treasuries, and Brazil was an outperformer, he said.

Venezuela and PDVSA, however, drifted lower as buyers outnumbered sellers on the day.

In other trading on Monday, bonds from Indonesia were firmer, with decent buying that was eventually curbed by a slight back-up in Treasuries, a London-based trader said.

“The downtrend still looks to be in play, so a little cautious adding risk up here,” he said. “Philippines was quiet, with subdued interest for a change, but the tone was still firm.”

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