Singapore Bonds

bart12 · Jul 12, 2014

Re: Interesting Bond issues

Right now , Genting and Hyflux provide the best return for retail perpetual bond investment in Spore.. However, I won't risk 250K on either issues.. I only put a small amount of investment by buying directly from SGX for balancing my portfolio

Runifyouhaveto said:
This counter is trading at a premium now. Genting can redeem it back at par (100) 3 years later on first-call date. After deducting the premium paid, you still get a respectable yield. In addition, Genting has self-imposed a penalty if they don't redeem back, so it is very favourable for investors.

This bond trades in both retail and secondary market. This is a rare arrangement (please correct me if I am wrong). If you buy $250K within 3hours in retail market, you are going to push up the price. The impact is more subdued if you buy 250K from secondary market. Please check with your remisier and bank RM to see which offers you the cheaper option if you wanna buy a bit more.

lifeafter41 · Jul 12, 2014

Re: Interesting Bond issues

bart12 said:
Right now , Genting and Hyflux provide the best return for retail perpetual bond investment in Spore.. However, I won't risk 250K on either issues.. I only put a small amount of investment by buying directly from SGX for balancing my portfolio

What does it mean by balancing portfolio. Sell those loss making?

lifeafter41 · Jul 12, 2014

Re: Interesting Bond issues

Runifyouhaveto said:
This counter is trading at a premium now. Genting can redeem it back at par (100) 3 years later on first-call date. After deducting the premium paid, you still get a respectable yield. In addition, Genting has self-imposed a penalty if they don't redeem back, so it is very favourable for investors.

This bond trades in both retail and secondary market. This is a rare arrangement (please correct me if I am wrong). If you buy $250K within 3hours in retail market, you are going to push up the price. The impact is more subdued if you buy 250K from secondary market. Please check with your remisier and bank RM to see which offers you the cheaper option if you wanna buy a bit more.

From what I understand, secondary market usually lower as not so liquid. Anyway cannot afford 250k a pop lah.

SNTCK · Jul 12, 2014

Re: Interesting Bond issues

i have 250k but i do not have bank RM leh, what to do?
i asked my remiser, she said she doesn't know how to deal with this also....

and i do not want buy from secondary market.
like this, how ya?

bart12 · Jul 13, 2014

Re: Interesting Bond issues

I mean reallocation from stock to bond and cash to minimize taking excessive risk when the stock market is at all time high for most indices

lifeafter41 said:
What does it mean by balancing portfolio. Sell those loss making?

jw5 · Jul 13, 2014

Re: Interesting Bond issues

SNTCK said:
i have 250k but i do not have bank RM leh, what to do?
i asked my remiser, she said she doesn't know how to deal with this also....

and i do not want buy from secondary market.
like this, how ya?

200k is enough to get you a bank RM at most local and foreign banks in SG. (except UOB I think)

However, once you get one, you may wish you didn't............................... :eek:

Runifyouhaveto · Jul 13, 2014

Re: Interesting Bond issues

lifeafter41 said:
From what I understand, secondary market usually lower as not so liquid.

It is more liquid because to offload 250K, you will not depress the price (vs retail market).

The problem with our local secondary bond market is that we are behind Malaysia and Hong Kong in terms of pricing transparency for small investors.

Runifyouhaveto · Jul 13, 2014

Re: Interesting Bond issues

SNTCK said:
i have 250k but i do not have bank RM leh, what to do?
i asked my remiser, she said she doesn't know how to deal with this also....

Small remisiers avoid such things because if you spend 250K into bonds = you will not be churning 250k worth of shares repeatedly in the next few years = she makes a lot less from you

Muthukali · Jul 14, 2014

Re: Interesting Bond issues

Runifyouhaveto said:
It is more liquid because to offload 250K, you will not depress the price (vs retail market).

The problem with our local secondary bond market is that we are behind Malaysia and Hong Kong in terms of pricing transparency for small investors.

No need to sell the bond, unless really needs the money. Or sell futures to hedge I/r risk

frenchbriefs · Jul 14, 2014

Re: Interesting Bond issues

bart12 said:
I mean reallocation from stock to bond and cash to minimize taking excessive risk when the stock market is at all time high for most indices

yes i agree indices are crazy high right now....dont understand how the s&p can go from down 800 points in 1 and half years to up over 100% or 1100 points in 6 years....its insane theres no way the economy can expand so fast.....i think the valuation of the stock market is way too crazy.....

i want to invest in bonds or safer instruments right now but im not sure what would be the performance of bonds in a crash.......do u have any bond funds or etfs to reccomend?

lifeafter41 · Jul 14, 2014

Re: Interesting Bond issues

Runifyouhaveto said:
It is more liquid because to offload 250K, you will not depress the price (vs retail market).

The problem with our local secondary bond market is that we are behind Malaysia and Hong Kong in terms of pricing transparency for small investors.

Not so sure on the more liquid.
Have a friend that was "chio" by a bank for the 250k tranche of Genting perpetual bond. After listing, the price drop below par and he panicked. He quickly called the RM to sell it. Was told by the RM that he would need to wait a few days as there wasn't any buyer.

No sure how true it is or kena bluff by the RM. Problem like what you have indicated, there is little transparency in the local secondary market as there is no pricing data.

SNTCK · Jul 14, 2014

Re: Interesting Bond issues

Runifyouhaveto said:
Small remisiers avoid such things because if you spend 250K into bonds = you will not be churning 250k worth of shares repeatedly in the next few years = she makes a lot less from you

I do not trade often. Just buy blue chips for dividend.
My investment style is buy and hold.
Do not think my broker makes a lot from me.

Thinking to shift to something stable and can sleep peacefully at night.

Currently still holding 300k share. Some earns, some lose.

winnipegjets · Jul 14, 2014

Re: Interesting Bond issues

frenchbriefs said:
yes i agree indices are crazy high right now....dont understand how the s&p can go from down 800 points in 1 and half years to up over 100% or 1100 points in 6 years....its insane theres no way the economy can expand so fast.....i think the valuation of the stock market is way too crazy.....

Money has no where to go except to the equity market.

i want to invest in bonds or safer instruments right now but im not sure what would be the performance of bonds in a crash.......do u have any bond funds or etfs to reccomend?

If you have a 10-year investment horizon, just build an etf portfolio covering equities of all regions and bonds. And rebalance very year. You will be laughing your way to the bank when you are ready to cash out.

Runifyouhaveto · Jul 14, 2014

Re: Interesting Bond issues

lifeafter41 said:
Have a friend that was "chio" by a bank for the 250k tranche of Genting perpetual bond. After listing, the price drop below par and he panicked. He quickly called the RM to sell it. Was told by the RM that he would need to wait a few days as there wasn't any buyer. Was told by the RM that he would need to wait a few days as there wasn't any buyer.

No sure how true it is or kena bluff by the RM.

It is true that many bonds are lowly-traded in the secondary market because real bond investors don't flip in & out. However, since it was listed, Genting Perpetuals is always Top 20% most actively traded bonds in local secondary market.

please fuck the chio RM really hard. The price did drop after listing when MSM ran an article warning about perpetual bonds. So i can guess, it is more like the chio RM didn't dare to tell your friend about the capital-losses during that period. There was definitely liquidity for this counter. (I reiterate that we should always and only consider local banks or deep deep deep blue-chips perpetuals).

please maintain a 2-3 chio RM or Remisiers to compare price quotes if you are touching secondary market bonds.

Runifyouhaveto · Jul 14, 2014

Re: Interesting Bond issues

SNTCK said:
I do not trade often. Just buy blue chips for dividend.
My investment style is buy and hold.
Do not think my broker makes a lot from me.

Thinking to shift to something stable and can sleep peacefully at night.

Currently still holding 300k share. Some earns, some lose.

Bond is not 100% safe. There are safe bonds, there are alibaba bonds. RUN's biggest embarrassment in bonds was NTUC Bond fund made up of Malaysian blue-chip bonds giving 5-8% yield in ringgit.. In the end, the bond fund made less than his Hong Leong Finance Fixed Deposits after adjusting for capital loss due to ringgit's devaluation against SGD.

Runifyouhaveto · Jul 14, 2014

Re: Interesting Bond issues

Runifyouhaveto said:
Bond fever grips Singapore's rich
http://in.reuters.com/article/2014/07/11/singaporebonds-idINL4N0PM1MZ20140711
Private banks are driving Singapore's bond market to new heights as wealthy individuals clamour for higher returns.

Singapore's wealthy individuals are also enticed by private banks that will lend up to 80% of the cost of their bond purchases, although a banker from one local bank said they would only provide leverage up to 60%.

Robust market liquidity has brought more issuers to market, and pushed issuance volumes up in the first half of this year, mostly since May. A total of S$11.4bn of bonds were sold up to July 3, up from S$9bn issued over the same period last year.

Please beware of the portion in red.

same article published on TODAY Newspaper
http://www.todayonline.com/business/bond-fever-grips-singapores-rich

lifeafter41 · Jul 14, 2014

Re: Interesting Bond issues

Runifyouhaveto said:
same article published on TODAY Newspaper
http://www.todayonline.com/business/bond-fever-grips-singapores-rich

Ah Run, thanks for the article.
When saw this below, was wondering what was the investor thinking to buy into it

Pacific International, a highly leveraged, unlisted shipping company, this week became the latest new issuer to benefit from this apparently insatiable appetite, when it sold a S$300 million 5.90 per cent unrated three-year bond that attracted S$3.5 billion of orders from 93 different buyers.

Pacific already has US$2.95 billion of debt and an annual interest bill of around US$81 million. Despite a weak outlook for the competitive shipping industry, private banks acting on behalf of their clients bought 93 per cent of the deal.

Olam6.75%b180129 US$ (R9JZ)

As at 14-07-2014 1:23 PM

Chg: 0.000 Prev Close: 1.078
Open: 0.000 Previous Close Date: 11 Jul 2014
High: 0.000 Vol: 0
Buy Vol: 2 Low: 0.000
Last Done: 0.000 Sell Vol: 50

Buy this even better, at least you know who is backing it.

Runifyouhaveto · Jul 14, 2014

Re: Interesting Bond issues

lifeafter41 said:
Ah Run, thanks for the article.
When saw this below, was wondering what was the investor thinking to buy into it

Pacific International, a highly leveraged, unlisted shipping company, this week became the latest new issuer to benefit from this apparently insatiable appetite, when it sold a S$300 million 5.90 per cent unrated three-year bond that attracted S$3.5 billion of orders from 93 different buyers.

Pacific already has US$2.95 billion of debt and an annual interest bill of around US$81 million. Despite a weak outlook for the competitive shipping industry, private banks acting on behalf of their clients bought 93 per cent of the deal.

The above mentioned is risky example. You get 5.9% for PIL - Option 1

I give you an safe example bro
Earlier we talked about OCBC 4%, very very ultra safe. - Option 2

At the beginning of the year when RUN joins SBF, it was 98.8. Today it is 101.3
So if you sell OCBC 4% today, you have enjoyed 4%pa + 2.5% capital gain (excluding commission) = 6.5%

Option 1 & Option 2 gives you similiar returns.
My point is, if you judgement is good and guai guai stick to elite local bank or deepdeep blue chips' perpetuals, you can still enjoy good returns + reduce default risks.

bart12 · Jul 16, 2014

Re: Interesting Bond issues

If the company of the bond you have bought have gone bankrupt as a result of a crash, you will still suffer heavy loss.. However, bond holder will have priority over shareholder in claiming the remaining assets. I treat my bond like a FD.. hold till maturity to get back the interest and principal. I would not recommend any bond fund or etf as you have no control and management fee will easily eat up the yield of bond which is already at all time low. Right now, there is not much choice in buying Spore issued bond on SGX.. Genting and hyflux (higher risk of default) provide higher yield.. CapAsiaMall has lower yield around 3% or lower. Olam is USD denominated and could incur Forex risk. If you dont mind forex risk, I will rather buy USD bonds directly from US markets.. You can buy bonds issued by DJ blue chip companies which have higher chance of surviving a major economic crash.

frenchbriefs said:
yes i agree indices are crazy high right now....dont understand how the s&p can go from down 800 points in 1 and half years to up over 100% or 1100 points in 6 years....its insane theres no way the economy can expand so fast.....i think the valuation of the stock market is way too crazy.....

i want to invest in bonds or safer instruments right now but im not sure what would be the performance of bonds in a crash.......do u have any bond funds or etfs to reccomend?

aurvandil · Jul 16, 2014

Re: Interesting Bond issues

Two reasons:

1) The US unexpetedly struck oil. US WTI crude is trading at a considerable discount to Brent crude. This is leading to fundamental structural change in the US economy that is still not fully understood.

2) The US stock market has evolved to become the equivalent of the Singapore housing market with regard to retirement. Politically, it is not viable for a market collapse. There is an undocuemented fiscal/monetary policy to ensure that there is a sustained rise over the long run in the same way the Singapore government ensure the Singapore housing market rises over the long run.

frenchbriefs said:
yes i agree indices are crazy high right now....dont understand how the s&p can go from down 800 points in 1 and half years to up over 100% or 1100 points in 6 years....its insane theres no way the economy can expand so fast.....i think the valuation of the stock market is way too crazy.....

i want to invest in bonds or safer instruments right now but im not sure what would be the performance of bonds in a crash.......do u have any bond funds or etfs to reccomend?

Singapore Bonds

Alfrescian

Alfrescian (Inf)

Alfrescian (Inf)

Alfrescian

Alfrescian

Moderator

Alfrescian

Alfrescian

Alfrescian (Inf)

Alfrescian (Inf)

Alfrescian (Inf)

Alfrescian

Alfrescian (Inf)

Alfrescian

Alfrescian

Alfrescian

Alfrescian (Inf)

Alfrescian

Alfrescian

Alfrescian

Similar threads