Derivatives houses, led by ABN AMRO and Deutsche Bank, running the iBoxx credit derivatives indices are preparing to launch a handful of instruments in the Asia-Pacific region in the coming weeks. "The launch is imminent," said Charlie Longden, global head of structured credit trading at ABN AMRO in London. The plans include an Asian index as well as regional sub-indices on Japan and Australia. Sub-indices for Hong Kong/China, Southeast Asia and Korea are also in the pipeline. "We're taking a sectoral approach and using the sub-indices as building blocks for a larger index," explained Longden. The index will remain regionally balanced because it selects names from each major country or region rather than the most liquid names in one area.
Traders said initial proposals outlined an index of 30 tradable credits for the non-Japan Asian index, versus the current 25 names listed in TRAC-X, a rival index run by Dow Jones Indexes (DW, 10/13). The trader added that for the iBoxx product all 25 names listed in the rival index have been proposed along with five other credits including Swire Group and LG-Caltex Oil Corp. TRAC-X already has indices for Asia non-Japan, Japan and Australia.
