Dealers are readying for the imminent launch of integrated credit index products for the Asian region in the coming weeks. "We expect greater liquidity and more dealers to become involved," said Richard Cohen, Asia-Pacific credit derivatives trader at Morgan Stanley in Hong Kong. Dubbed the Dow Jones iTraxx, the index will merge rival credit index products TRAC-X and i-Boxx, as seen in the U.S. and Europe. As opposed to the TRAC-X Asia index, which incorporated 25 names, the new Asian product will list 30 credits, for which the list is now being finalized, while Australia will likely remain unchanged. Dealers expect a launch date around July 20 for the product and will allow investors holding existing positions the ability to switch into iTraxx.
Credit officials in Tokyo, however, noted that the integration of the CJ 50 in Japan, launched last year by BNP Paribas, Bank of Tokyo-Mitsubishi and Goldman Sachs (DW, 8/25), with TRAC-X Japan will take longer, given the larger credit universe. "We're still in the process of choosing names," said a senior credit trader at a bulge bracket house. A conference call addressing the planned merger was set for July 9, after DW went to press. The new index for Japan is expected to take flight next month.
