Friday October 10, 03:30 AM
Asian credit default swaps soar to record - traders
HONG KONG, Oct 10 (Reuters) - The cost of protection against defaults in Asian's sovereign and corporate debt soared to record highs amid fears the financial crisis could soon spread to the region, traders said.
The sharp widening in the credit default swap spreads in the region comes as stock markets worldwide continued to tumble as investors fear a deep global recession, despite a series of government efforts to revive frozen credit markets.
The iTRAXX Asia ex-Japan high-yield index, a key measure of risk aversion for the region's 'junk'-rated credit, soared by about 90 basis points to a record 890/940 bps, a Singapore-based fund manager said.
But traders also warned of little activity in the credit markets, which tends to magnify price differences.
The equivalent investment-grade index widened by 40-50 basis points to 318/338, the fund manager said.
(Reporting by Rafael Nam and Umesh Desai; Editing by Keiron Henderson)
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