Singapore Bonds

Re: Interesting Bond issues

lifeafter41 said:

From now till 2020, still 5.5 years to maturity.
Wouldn't it be better to hold on to it till 2020 rather then redeem at par?.

Unless there is an early clause where it's stated they are allowed to redeem it earlier.

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Yup, bondholders may choose not to surrender their bonds aka exercise the put option (due to change in ownership). You would agree that the new ownership under temasek will have a smaller default risk.

Re: Interesting Bond issues

bro, can explain flow of bond prices daily to me? is there some kind of weird logic behind??
besides the inverse corelation between yield and bond prices...

Re: Interesting Bond issues

krafty said:

bro, can explain flow of bond prices daily to me? is there some kind of weird logic behind??
besides the inverse corelation between yield and bond prices...

Click to expand...

Dear Leader, you mean, factors affecting bond prices? Yes, there are many factors affect the demand = price movement of bonds.

1. Macro-environment interest rates/inflation
Textbook: market rates higher = your bond price drops
Current: Market is worrying about something; bond demand/prices went up so much that they supercede the downward pressure on bond prices despite projecting 2015 US rate hike.

2. Issuer risk
Commonly know as credit rating or credit worthiness. If OCBC and a penny stock gives you 5%, i think you will prefer OCBC.

3. Currency
Depending on market perception, the price of a USD 5% bond is likely to be different from a SGD 5% bond from the same company, ceteris paribus

4. Listing market
A retail market bond usually commands higher premium/price than a secondary market bond from the same company, ceteris paribus

5. Denominations
Very often, bonds (from the same company) listed in smaller denominations are more expensive = lower yields than similar bonds from the same company, ceteris paribus. Retail market $100 or $1000, secondary market $250000.

6. Stock Market
Textbook: Shares up = Bond down (More applicable for govt bonds)
Current: RUN notices that it is not always true. If market meltdown, corporate bonds will also drop (by a smaller magnitude. Eg. UOB, OCBC preference shares were trading at 5-10% discount to par when their ordinary shares collapsed by 30-40% after the subprime crisis.

7. Bond Duration
Textbook: Longer duration = more risky = lower bond price for same yield
Current: If market perceives low-interest rates environment to persist, please don't be surprise that the reverse is true = higher bond premium for bonds from SAFE ISSUERS because buyers wanna lock-in or enjoy the good bond-yields for longer time frame.

..............still got other factors that i might overlook =)

Re: Interesting Bond issues

kum sia many many...:o

Runifyouhaveto said:

Dear Leader, you mean, factors affecting bond prices? Yes, there are many factors affect the demand = price movement of bonds.

1. Macro-environment interest rates/inflation
Textbook: market rates higher = your bond price drops
Current: Market is worrying about something; bond demand/prices went up so much that they supercede the downward pressure on bond prices despite projecting 2015 US rate hike.

2. Issuer risk
Commonly know as credit rating or credit worthiness. If OCBC and a penny stock gives you 5%, i think you will prefer OCBC.

3. Currency
Depending on market perception, the price of a USD 5% bond is likely to be different from a SGD 5% bond from the same company, ceteris paribus

4. Listing market
A retail market bond usually commands higher premium/price than a secondary market bond from the same company, ceteris paribus

5. Denominations
Very often, bonds (from the same company) listed in smaller denominations are more expensive = lower yields than similar bonds from the same company, ceteris paribus. Retail market $100 or $1000, secondary market $250000.

6. Stock Market
Textbook: Shares up = Bond down (More applicable for govt bonds)
Current: RUN notices that it is not always true. If market meltdown, corporate bonds will also drop (by a smaller magnitude. Eg. UOB, OCBC preference shares were trading at 5-10% discount to par when their ordinary shares collapsed by 30-40% after the subprime crisis.

7. Bond Duration
Textbook: Longer duration = more risky = lower bond price for same yield
Current: If market perceives low-interest rates environment to persist, please don't be surprise that the reverse is true = higher bond premium for bonds from SAFE ISSUERS because buyers wanna lock-in or enjoy the good bond-yields for longer time frame.

..............still got other factors that i might overlook =)

Click to expand...

Re: Interesting Bond issues

Give a few minutes for this trailer: Master of the Universe

[video=youtube;OIUPWWwEclc]http://www.youtube.com/watch?v=OIUPWWwEclc[/video]

We are now sitting on a mountain of debts. So, do you want to be the drug-addict or drug peddler?
Be a lender, not borrower, going forward.

Re: Interesting Bond issues

Runifyouhaveto said:

Based on this information
http://hyflux.listedcompany.com/newsroom/20110413_112303_600_4A38112CA5F055CD48257871000FD2A5.3.pdf

First Call Date: 25 April 2018 (will usually redeem back, self-imposed penalty to hint redemption: coupon increase to 8% after that FCD)
Months Till FCD: 47 months
Remaining Coupon Payouts: 8 x 3% (semi annual) = 24%
Premium Based on today's price = 6.5% (including accrued interests, excluding commission)

Yield Estimate till FCD = (24 - 6.5) * 12/47months = 4.468%pa (note: not fully accurate due to appx 1-mth of underlying accrued interests adjustment)


This is an online bond yield calculator, (commissions excluded)
http://www.quantwolf.com/calculators/bondyieldcalc.html

Click to expand...

Thanks Run, this has been very useful.

Re: Interesting Bond issues

Runifyouhaveto said:

good brother, the personal attacks are just the catalyst, an excuse for RUN to walk away. In fact, the SBF is a tougher drome. RUN started to feel uneasy when people there defended fiercely about the notion of owning/buying/selling physical gold and silvers + investments in specific stock counters, eg REITs.

Ok, it is perfectly ok to have differing opinions on shares but RUN came to realized that it is likely that some of team/moderators might be making a living out of web-traffic and peddling physical-gold. Absolutely nothing wrong but they didn't read carefully that RUN is also vested in similiar areas; just that i was advocating the investment in miners instead of physical gold/silver because RUN shared his field experience that our local precious metal market was inefficient and cornered by a few middlemen. Then they not happy wor =). So unfortunate, RUN also have about 30K worth of pure silver investment. I was just being less biased.

As days passes by, RUN suspects that the team/moderators behind the site contains either non-singaporean or new-immigrants with other agendas. There might be foreign-govt elements inside, systematically bashing and flaming true locals (in my opinion), and spreading neo-nazi anti-west beliefs . The nice guys (in my opinion) got silenced. These people never got banned or warned yet rewarded with repute points.

Too complicated city life over there, RUN is just a country mouse, that's why he walked away.

Click to expand...

I am a church mouse. And as poor as one too.

Re: Interesting Bond issues

Runifyouhaveto said:

good brother, the personal attacks are just the catalyst, an excuse for RUN to walk away. In fact, the SBF is a tougher drome. RUN started to feel uneasy when people there defended fiercely about the notion of owning/buying/selling physical gold and silvers + investments in specific stock counters, eg REITs.

Ok, it is perfectly ok to have differing opinions on shares but RUN came to realized that it is likely that some of team/moderators might be making a living out of web-traffic and peddling physical-gold. Absolutely nothing wrong but they didn't read carefully that RUN is also vested in similiar areas; just that i was advocating the investment in miners instead of physical gold/silver because RUN shared his field experience that our local precious metal market was inefficient and cornered by a few middlemen. Then they not happy wor =). So unfortunate, RUN also have about 30K worth of pure silver investment. I was just being less biased.

As days passes by, RUN suspects that the team/moderators behind the site contains either non-singaporean or new-immigrants with other agendas. There might be foreign-govt elements inside, systematically bashing and flaming true locals (in my opinion), and spreading neo-nazi anti-west beliefs . The nice guys (in my opinion) got silenced. These people never got banned or warned yet rewarded with repute points.

Too complicated city life over there, RUN is just a country mouse, that's why he walked away.

Click to expand...

Absolutely nothing wrong but they didn't read carefully that RUN is also vested in similiar areas; just that i was advocating the investment in miners instead of physical gold/silver because RUN shared his field experience that our local precious metal market was inefficient and cornered by a few middlemen.

Who are these middle men?.
What's your thoughts on gold, by the way, as in physical type.
Always have thought of having something shiny to hold on to

Re: Interesting Bond issues

Did they grew intimate at the end ?

Re: Interesting Bond issues

eh Run


you have been a really good helpful brother so far to the members of this forum....


can you tell us which bonds are good to buy into if I am looking to invest $50K?


can give us a shortlist of the top 10 bro???


safe and good




steady!!!

Re: Interesting Bond issues

krafty said:

bro, can explain flow of bond prices daily to me? is there some kind of weird logic behind??
besides the inverse corelation between yield and bond prices...

Click to expand...

No need to headache, go and trade interest rate futures in CME, save trouble, either profit or losses after you square your positions

Re: Interesting Bond issues

lifeafter41 said:

Who are these middle men?.
What's your thoughts on gold, by the way, as in physical type.
Always have thought of having something shiny to hold on to

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I think they run physical gold trading business.
Ok here's some gold discussions bro
http://sammyboy.com/showthread.php?182291-All-that-glitters-is-not-Gold

Re: Interesting Bond issues

Lordshiva said:

eh Run

you have been a really good helpful brother so far to the members of this forum....

can you tell us which bonds are good to buy into if I am looking to invest $50K?

can give us a shortlist of the top 10 bro???

safe and good

steady!!!

Click to expand...

How much yield is good for u?

Actually good bonds are trading at a premium now. if you can, wait for new issues which you can buy at par. Here are some good SGD bonds trading at a premium = you need to reimburse others above par when you buy it.
Sembcorp 5% - Secondary Market
Hyflux 5.75% - Secondary Market
Hyflux 6% - SGX Mainboard
UOB 4.95% - Secondary Market
DBS 4.7% - SGX Mainboard
OCBC Capital 5.1% SGX Mainboard
OCBC 4% - Secondary Market


So i don't encourage buying bonds from resale market unless you are very rich because u might lose $$$ for paying extra premiums. If you can wait, here are some potential good issuers:
- Maybe Singtel needs to raise $$$ if they buy Shin Corp from Temasek (Maybe maybe maybe)
- Temasek said they will issue bonds to retail investors soon
- OCBC should be raising more money soon because they bought Winghang Bank
- MAS approved local banks to issue covered bonds in future (relatively safe)
.............if you can wait, wait a while, resale is expensive now but rich people are still buying because they use bond-financing = borrow money to invest in bonds, so their cash cannot sit idle.

Warning: Buy only ultra-good bonds from deep-blue issuers. Offloading before maturity can give u a little unexpected capital gains (like now) or capital loss, even if they are top-notch issuers (see Apple example)

Re: Interesting Bond issues

Runifyouhaveto said:

How much yield is good for u?

Actually good bonds are trading at a premium now. if you can, wait for new issues which you can buy at par. Here are some good SGD bonds trading at a premium = you need to reimburse others above par when you buy it.
Sembcorp 5% - Secondary Market
Hyflux 5.75% - Secondary Market
Hyflux 6% - SGX Mainboard
UOB 4.95% - Secondary Market
DBS 4.7% - SGX Mainboard
OCBC Capital 5.1% SGX Mainboard
OCBC 4% - Secondary Market


So i don't encourage buying bonds from resale market unless you are very rich because u might lose $$$ for paying extra premiums. If you can wait, here are some potential good issuers:
- Maybe Singtel needs to raise $$$ if they buy Shin Corp from Temasek (Maybe maybe maybe)
- Temasek said they will issue bonds to retail investors soon
- OCBC should be raising more money soon because they bought Winghang Bank
- MAS approved local banks to issue covered bonds in future (relatively safe)
.............if you can wait, wait a while, resale is expensive now but rich people are still buying because they use bond-financing = borrow money to invest in bonds, so their cash cannot sit idle.

Warning: Buy only ultra-good bonds from deep-blue issuers. Offloading before maturity can give u a little unexpected capital gains (like now) or capital loss, even if they are top-notch issuers (see Apple example)

Click to expand...

I think its better than buying those that are recently issued, for example, CapMallA at 3.8%. The issuer probably knows that the market is hungry for yields and is pricing it very competitively.

By the way, how do you buy those in the secondary market?.
Or is it going to be 250k a pop

Re: Interesting Bond issues

lifeafter41 said:

I think its better than buying those that are recently issued, for example, CapMallA at 3.8%. The issuer probably knows that the market is hungry for yields and is pricing it very competitively.

By the way, how do you buy those in the secondary market?.
Or is it going to be 250k a pop

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Hi, the most recent retail issue should be CapMall 3.08% not CapMall Asia 3.8%

For secondary market, you need to deal through your bank RM or stockbroker/remisier. I understand that due to the low commissions involved, many remisiers don't want to serve u for such products.

Re: Interesting Bond issues

I would like to share another interesting bond today
http://www.financeasia.com/News/313...te-benchmark-with-s300-million-long-bond.aspx

Keppel Corp 4%
Issued in 2012.
Duration: 30 years, callable in 20 years.

Today, bond market prices are enjoying a good rally but Keppel Corp 4% is still trading about 10% below par because of its long duration. This is a safe bond but trading at a steep discount below par for two reasons:
- Lower yields for such long duration (vs. Sembcorp 5% perpetual appx 4% above par)
- Long 20-30 years duration, similiar as govt/temasek debts

If you read about another long-duration 3.8% bond from Apple, it is also trading about 10% below par now and even as low as 20% below par just six months ago.

So it is actually possible to face capital loss for even the safest bonds if you don't hold till maturity. Imagine if you use bond-financing and you would risk triggering margin calls = lose more than what you invest.

Re: Interesting Bond issues

Actually good bonds are trading at a premium now. if you can, wait for new issues which you can buy at par. Here are some good SGD bonds trading at a premium = you need to reimburse others above par when you buy it.
Sembcorp 5% - Secondary Market
Hyflux 5.75% - Secondary Market
Hyflux 6% - SGX Mainboard
UOB 4.95% - Secondary Market
DBS 4.7% - SGX Mainboard
OCBC Capital 5.1% SGX Mainboard
OCBC 4% - Secondary Market


So i don't encourage buying bonds from resale market unless you are very rich because u might lose $$$ for paying extra premiums. If you can wait, here are some potential good issuers:
- Maybe Singtel needs to raise $$$ if they buy Shin Corp from Temasek (Maybe maybe maybe)
- Temasek said they will issue bonds to retail investors soon
- OCBC should be raising more money soon because they bought Winghang Bank
- MAS approved local banks to issue covered bonds in future (relatively safe)
.............if you can wait, wait a while, resale is expensive now but rich people are still buying because they use bond-financing = borrow money to invest in bonds, so their cash cannot sit idle.

Warning: Buy only ultra-good bonds from deep-blue issuers. Offloading before maturity can give u a little unexpected capital gains (like now) or capital loss, even if they are top-notch issuers (see Apple example)

Click to expand...

We thank readers for their interest in Temasek, and look forward to the day when it is practical for us to issue Temasek Bonds to retail investors to give them another option to save for their retirement.

Stephen Forshaw
Managing Director Strategic & Public Affairs
Temasek
http://www.temasek.com.sg/mediacentre/medialetters?detailid=20737

Re: Interesting Bond issues

It is not feasible to buy SG bonds on secondary market without deep market. For most folks like us, we can only buy SG bonds listed on the SGX mainboard. Even if you are paying a premium, you wont lose money if you hold to maturity.

As for people who are interested in putting bond in your investment portfolio, the best option is to buy bonds listed in US markets. One can easily buy them on etrade or interactive broker account which can be opened in Spore. However, any USD denominated bonds are subject to currency risk.

Runifyouhaveto said:

How much yield is good for u?

Actually good bonds are trading at a premium now. if you can, wait for new issues which you can buy at par. Here are some good SGD bonds trading at a premium = you need to reimburse others above par when you buy it.
Sembcorp 5% - Secondary Market
Hyflux 5.75% - Secondary Market
Hyflux 6% - SGX Mainboard
UOB 4.95% - Secondary Market
DBS 4.7% - SGX Mainboard
OCBC Capital 5.1% SGX Mainboard
OCBC 4% - Secondary Market


So i don't encourage buying bonds from resale market unless you are very rich because u might lose $$$ for paying extra premiums. If you can wait, here are some potential good issuers:
- Maybe Singtel needs to raise $$$ if they buy Shin Corp from Temasek (Maybe maybe maybe)
- Temasek said they will issue bonds to retail investors soon
- OCBC should be raising more money soon because they bought Winghang Bank
- MAS approved local banks to issue covered bonds in future (relatively safe)
.............if you can wait, wait a while, resale is expensive now but rich people are still buying because they use bond-financing = borrow money to invest in bonds, so their cash cannot sit idle.

Warning: Buy only ultra-good bonds from deep-blue issuers. Offloading before maturity can give u a little unexpected capital gains (like now) or capital loss, even if they are top-notch issuers (see Apple example)

Click to expand...

Re: Interesting Bond issues

bart12 said:

It is not feasible to buy SG bonds on secondary market without deep market. For most folks like us, we can only buy SG bonds listed on the SGX mainboard. Even if you are paying a premium, you wont lose money if you hold to maturity.

As for people who are interested in putting bond in your investment portfolio, the best option is to buy bonds listed in US markets. One can easily buy them on etrade or interactive broker account which can be opened in Spore. However, any USD denominated bonds are subject to currency risk.

Click to expand...

I agree sir, here's my take:

Advantages of Retail Bonds (listed in SGX mainboard) include better liquidity + smaller denominations. Retail bonds have greater price transparency too. You need to depend on your RM to find out the latest price for secondary market bonds. (Malaysia and HK have their own Central Bank secondary bond price portal, but not Singapore).

In recent history, RUN noticed a few rare issuers (eg. DBS 4.7% and Genting 5.125%) offering similar yields for both secondary and primary market issues. In singapore context, the price of such retail bonds are valued higher if you need to offload before maturity. Eg. Genting 5.125% is trading at 1% below par in secondary market, while their retail 5.125% are trading above par.

OK, secondary market bonds have a few simple advantages:
- Cheaper bond price, if you are buying resale (not IPO)
- Relatively better/higher yields because the cost of listing in retail market is higher than secondary market
- 1000x more choices to choose from

We are likely to have some new covered bonds from local banks or Temasek retail bonds soon.

Re: Interesting Bond issues

OCBC Plan Dollar Bonds as Weekly Issuance in Asia Trebles
.......... the Singaporean lender is looking to sell subordinated Tier 2 debt
http://www.businessweek.com/news/20...llar-bonds-as-weekly-issuance-in-asia-trebles

Sounds like USD 250K type