Quiet last day of trading for quarter ahead of HK holiday

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SINGAPORE (June 30): Trading in Asia was quiet on the last day of the quarter with a lack of major headlines to move the market.

Many market participants also already had left ahead of a holiday in Hong Kong tomorrow.

Prices of high-yield bonds largely remained unchanged despite news of potential primary deals. Future Land Development Holdings was rumored to be preparing a US dollar offering and newly listed Redco Properties Group announced a roadshow beginning on Thursday.

"The deals were leaked to the market last week so the impact has been built in," a Hong Kong-based high-yield trader said.

The capital city of Inner Mongolia's announcement that it would abolish the local resident purchase requirement, or LRPR, for property also failed to move property bonds. Hohhot is the first city to officially scrap the LRPR.

"Hohhot is too small of a city to raise eyebrows," the trader said. "If it was Shenzhen or Guangzhou announcing the same thing, then the market will definitely react."

Among the exceptions were Evergrande Real Estate 2018s, which were bid up about half a point thanks to buying from private bankers. The large-cap developer has opened a residential property project near Hangzhou for registration.

"Many buyers were registering interest for the project. Yet the company said it was willing to sell at below cost to generate enough churn," said a Singapore-based trader who went on to see the site last week.

Prices were largely unchanged among investment-grade credits, although bid-offer spreads widened due to a lack of liquidity, another Singapore-based trader said.

Spreads of Greenland Holding Group's two-tranche bond issued last week widened further today. Spreads on the 5-year tranche were quoted around 300bp, while spreads on the 10-year were at 355bp.

Korea Gas Corp was indicated to yield 90bp/80bp over the current 10-year Treasury. The latest-issued bonds from AmBank Group and China Construction Bank Asia were indicated at spreads of 147bp/142bp and 137bp/135bp, respectively.