Singapore-based Crédit Agricole Asset Management, with over USD2.5 billion in assets in Asia, is looking to trade credit default-swaps (CDS) for the first time within 12 months. "This [process] takes time," said an insider. The fund has shied away from the CDS market until now because its investor base is fairly conservative but these investors are coming around because of improving liquidity.
The fund will consider both buying and selling default-swap protection on Asian names for its fixed income portfolio, according to a market official. Credit derivatives could make up over 20% of the fixed income portfolio, which he declined to quantify. It will consider any potential counterparties although price will be the most important determinant, he added.
A credit marketer at Nomura International said Asian funds are increasingly looking at credit products as the market matures. "The market's developing," he said. "Now there's more liquidity and more people quoting prices."
