Investors focus on Sinopec, trade CNPC

Asian credit investors had all their energy focused on the primary market today, especially on a 4-tranche transaction from China National Petroleum and Chemical Corp (Sinopec).

It was for this reason, traders said, there was little activity in the secondary market today. Most of the trades that did cross the screens were on CNPC's recently priced 3-tranche deal. According to one trader, some clients were unloading their holdings of CNPC to make room for Sinopec's jumbo transaction.

The activity was more churn, though, with enough buyers to offset the selling pressure. As a result, CNPC's 2016s ended the day unchanged at 114bp/111bp over US Treasuries, with the 2018s and 2023s having the same fate, last quoted at 123bp/120bp and 161bp/159bp, respectively. The Asia iTraxx IG Series 19 index also ended unchanged at 115bp.

Sovereigns remained fairly well supported and the 2043s of Indonesia ended the day only 25 cents weaker in price terms at 102.75/103.00 in line with the move US Treasuries since yesterday. It was the same for the Philippines as its 2037s closed the session at 118.25/119.25. The high-yield market saw a little bit more action, with a couple of late trades helping the general tone of the sector.

Bonds did not actually rise in price, but the bid-ask spread tightened a bit as investors and dealers felt more comfortable coming closer to the offer levels.