Last week's rollover in the Asian iTraxx index saw the addition of a handful of high-yield names in a drive to increase end user appeal. "We hope it will be more interesting to investors," said a senior credit trader at a bulge bracket firm. Credit traders have noted that while the iTraxx Asia ex-Japan index provides a diversified exposure to the region, the relative lack of volatility in the credits in comparison to other markets has prompted dealers to take action by introducing more emerging market default-swaps to attract trading interest. In the new rollover, Export-Import Bank of India, Sino-Forest Corp., the Republic of Vietnam, and WANHAI have replaced China Mobile, Wharf (Holdings), Hong Kong and United Microelectronics Corp.
Credit officials noted the new index is trading at a mid-market around 62 basis points, whereas the previous version was trading around 47bps, and is anticipated to remain significantly wider. "This gives a better flavor of what's actively trading at the moment," noted a dealer at a European house, adding, "and it doesn't hurt to refresh the index."
