The Thomson Reuters Index of Asia emerging credit was quoted at 126.72 on a weighted average basis, a three-week high, and at 179.70 on a simple average. "Equities are off, the market is in a defensive mood. People are cutting risky holdings," a trader from Singapore said. Since it posted a 20-month low on January 12, the iTraxx has widened by about 20 bps, as a string of planned new issues kept investors from taking more risks.
China's series of moves to rein on liquidity, including raising bank reserve requirements and increasing the yields on government debt, further heightened risk aversion. China's 5-year CDS traded at 81/83 bps from 77/80 bps on Thursday, while the Philippines'widened by 22 bps, traders said.
The Philippines' 2020 bonds sold this month slipped for a second day to 105.125/105.5 cents on the dollar from Thursday's 105/.875/106.25, traders said. Indonesia's newly-issued 2020 881145 bonds fell to 99.5/100 cents on the dollar from 100.25/100.50.
In the primary market, Indonesia's PT Cikarang Listrindo planned to price its $300 million 5-year bonds near 9.75 percent, a source close to the deal said. Chinese developer Evergrande Real Estate has also released final guidance on its $750 million 5-year bond issue at 13 percent, another source said.