Billionaire Sy’s SM Investments Markets Bonds as Asia Risk FallsTanya Angerer
SM Investments Corp. and Shui On Land Ltd. are marketing U.S. dollar-denominated notes as Asia’s bond risk holds at the lowest in 12 months.
SM Investments, Philippine billionaire Henry Sy’s holding company, is selling 10-year debt to yield about 5.125 percent, according to a person familiar with the matter, who asked not to be identified because the matter is private. Shanghai-based developer Shui On is offering five-year notes at about 9.875 percent. Bond risk in Asia fell 1.5 basis points to 105.5 today, headed for its lowest close since last May, according to trader prices and data provider CMA.
Investors are demanding the least premium in 17 months to hold U.S. currency securities in Asia outside Japan over Treasuries as concerns ease that China’s economic growth could slow more sharply. An official gauge of manufacturing in Asia’s biggest economy expanded at the fastest pace in five months, adding to evidence government stimulus measures may gain traction. South Korea is expected to start marketing a global bond sale as early as today, another person said.
“We see China as stable, a few decimal point changes on the country’s growth figure won’t substantially alter fundamentals,” said Anthony Leung, a Hong Kong-based analyst at Nomura Holdings Inc. “June is the month for issuance. July and August will slow substantially due to summer holidays.”
Yield premiums on dollar bonds from the region fell to 249.8 basis points more than Treasuries yesterday, according to JPMorgan Chase & Co. indexes. South Korea, Asia’s fourth-biggest economy, is considering selling 30-year dollar bonds and 10-year euro-denominated notes.
The Purchasing Managers’ Index rose to 50.8 in May, the National Bureau of Statistics and China Federation of Logistics & Purchasing said June 1 in Beijing, compared with the 50.7 median estimate of analysts surveyed by Bloomberg News.
A similar index from HSBC Holdings Plc and Markit Economics, released today, was at 49.4 in May, a four-month high and up from 48.1 in April.
The Communist Party has stepped up the pace of stimulus measures, including faster spending from government budgets and increased railway investment, to help meet an official growth target of about 7.5 percent this year. The cabinet said last week it would cut reserve requirements for some lenders, as authorities contend with a property-market slump.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan is headed for a fifth straight day of declines, the longest streak since April 10, according to CMA.
The Markit iTraxx Australia index declined 0.25 of a basis points to 85.25 basis points as of 10:42 a.m. in Sydney, Citigroup Inc. prices show. The benchmark is poised to drop for a second day to its lowest since April 2010, CMA data show.
The Markit iTraxx Japan index decreased 0.75 of a basis point to 74.25 as of 9:55 a.m. in Tokyo, Citigroup prices show. The measure, which has ranged from 67.2 to 90.3 this year, is set to close at its lowest level since Jan. 13.