The Asian convertible bond arbitrage Ishin Fund enjoyed a strong October adding an estimated 3.14% for the month, taking the fund’s gains to 10.61% year-to-date.
A record level of Asian convertible bond issuance at $11.5 billion in September gave the market indigestion and caused existing valuations to cheapen, explains Pine River Capital’s Scott Reinhart.
Come October, though, new issuance was a more moderate $2.5 billion and the previous month’s issuance was gradually absorbed by the market. With subdued secondary market valuations and continuing inflows into the region, valuations rebounded strongly off their September lows.
Looking to the end