Credit markets could be first to rebound

Asian companies are buying back their debt with gusto and this could be a sign that credit markets are on the mend, according to Morgan Stanley.

Asian companies are betting that credit will offer the best returns in 2009 and, like the smart traders they are, executives in the region are busy buying back their debt with gusto. Earlier this week, Nine Dragons Paper bought back the remainder of a $300 million bond due in 2013, offering to pay 53 cents to the dollar, and other Asian borrowers retired a total of close to $2 billion in 2008.

Such trades look like good bets. Right now,...

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