Wednesday, September 22, 2010

Corporate bonds in SGX

Retain investors can invest in corporate bonds in SGX from 1 October 2010. They have a yield that is better than government bonds and bank deposits. The trading on SGX will give liquidity and transparent pricing to the investors.


Spur said...

Yields for Sing-dollar bonds have dropped drastically in the past 4 months due to great demand for Asian currencies and higher yields compared to US Treasuries. If I were a stable local company, I will redeem all callable bonds and re-issue debt at rock-bottom interest rates.

SIA is taking advantage of the extremely low interest rate environment. 5-yr SIA bonds with 2.15% coupon. Not really a good deal for a medium-term bond. They can get away with it becoz of the pedigree brand name and becoz similar length SGS bonds are now yielding only 0.8%.

Hiei said...

As far as i know, the bonds market trading in SGX have very low liquidity.

Koh said...

SIA bonds @ 2.15% coupon rate are not attractive. You can buy OCBC Bank bonds at SGX which offfer better rates. However, if you buy now you may have to pay a premium. Wait for the market to correct (expected sometime next year)then buy at the cheaper prices!!

Koh said...

A word of clarification on my comment on Sept 24 2010 - 6.36pm. The OCBC Bank bonds are actually Preference Shares which have bond-like features like dividend payments(bond yield) and tenure(5 yrs.,etc.)

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