Credit dealers in Asia are discussing assembling a high-yield credit derivatives sub-index, which could potentially be launched next year. "There's been a lot of new issuance in the cash market since last year which has been filtering into CDS," said a senior credit trader. Traders said a sub-index of the iTraxx Asia could be comprised of 15 tradable high-yield names such as Noble Group and Sino-Forest Corp.
A sub-index has been mooted before, but plans were put on the backburner as dealers focused on debating the names of the expanded iTraxx Asia launched last month. Looking forward, dealers believe the sub-index should be launched next year, though the timing is still to be decided. The senior trader believes the index could be launched within six months and would add some diversity to products on Asian underlying available, which is still limited compared to other markets. "I expect this to happen later next year," noted another dealer at a bulge bracket house.
