Re: Interesting Bond issues
bro run, normally, people buy bond is because equity market not doing well and they are seeking safety in bond?
1. Yes, you are right.
2. No, even the safest bonds can be manipulated by evil RMs into speculative financial instruments, eg. asking you to make $20 downpayment to own $100 of HDB bonds (safe) through financing.
3. Maybe, something is going to happen. I read a few articles that advocates a new thinking in bond investment (because something is going to happen) that encourages us to chase this mad bond rally. They are encouraging investors and speculators to dump long-term bonds for short-term ones because the chances of default is much lower for
good blue chip short-term bonds:
- Investors will be assured of (higher odds of) redemption within 2-3 years. In the event market crashes, Investors can happily get par value back and switch to equities or properties.
- Speculators can lock-in the cost of financing these short-term bonds with fixed short-term (cheaper) loans to make easy $$$ too.
Therefore the answer: all of the above.