BOND THREAD

[Laguna]

The yield of high yield bonds is trending down, and still trending down.

There are so many bond issues all over the world as all corporates want to lock in cheap money for a longer period.

Go for Russia, Brazil, South Korea etc, where the growth is very bright.

[cbsh38584]

The yield of high yield bonds is trending down, and still trending down.

There are so many bond issues all over the world as all corporates want to lock in cheap money for a longer period.

Go for Russia, Brazil, South Korea etc, where the growth is very bright.

Thank. Will look into these countries.

rdgs,
Vic

[stl67]

Hi Laguna,Vic,
With CM7, what doyou think of the bond prices of those issued by the property developer, like Lippo, Capital land and etc.

[starrynight]

Hi Vic, any views on the Bionsensors bond launches today?

Some info:

Issuer: Biosensors Investment ( Singapore ) Pte. Ltd.
Guarantor: Biosensors International Group, Ltd.
Expected Issue Rating: Unrated
Status: Fixed Rate, Senior, Unsecured
Format: Reg S Bearer
Tenor: 4 Yrs
Size: S$ Benchmark
Coupon: 5.25% area
Guidance: 5.25% area
Product Risk Rating: P4
Selling Restrictions: S274 & S275 of the Singapore SFA
Details: S$250k x S$250k / Singapore Law / CDP / SGX-ST
Joint Bookrunners: Credit Suisse, Standard Chartered Bank (B&D)
Timing: As early as today

Thanks!

If U buy a short dated STRAIGHT bond mature in 2015 giving yield 4-5%, U should be fine even there interest rate goes up to 3% by 2015. But 3% interest rate rise is unlikely.

But be careful on Perpetual bond which offer lower yield 4% like Sing Post. Pls do not leverage if U just want to PARK your money to match inflation.

But now, the new BOND issue coupon is very low. India largest bank ICICB SG bond 3.65% 7 yrs. Just be patience to wait for deep mkt correction if U just want to have a safe & low volatilty place to park your money in bond.

A moderate risk investors should look in Dividend stock & Reit. Again be patience if U want to buy at LOW FLOOR. It will definitely come. If big correction come, make sure U have already do all your homework & are emotionally prepare to buy.



rdgs,
Vic

[phantom_opera]

expectation of low GDP growth will further fuel the corp bond bubble in 2013:

Singapore's GDP growth for 2013 is likely to come in on the "low-side" of the official forecast range of 1 to 3 per cent, DBS Group CEO Piyush Gupta said at a DBS Private Bank event on Monday.

He said that the Singapore government has made clear its willingness to trade-off economic growth in favour of more sustainable growth.

The property cooling measures announced last Friday have "a lot of teeth" and will generate headwinds too, he added.

[cbsh38584]

Hi Vic, any views on the Bionsensors bond launches today?

Some info:

Issuer: Biosensors Investment ( Singapore ) Pte. Ltd.
Guarantor: Biosensors International Group, Ltd.
Expected Issue Rating: Unrated
Status: Fixed Rate, Senior, Unsecured
Format: Reg S Bearer
Tenor: 4 Yrs
Size: S$ Benchmark
Coupon: 5.25% area
Guidance: 5.25% area
Product Risk Rating: P4
Selling Restrictions: S274 & S275 of the Singapore SFA
Details: S$250k x S$250k / Singapore Law / CDP / SGX-ST
Joint Bookrunners: Credit Suisse, Standard Chartered Bank (B&D)
Timing: As early as today

Thanks!

This Biosensors bond is more for higher risk appetite investor. Only your banker is able to access your risk profile.

For new investor, better buy Lippomall , Capland, OUE (mandarin Orchard etc), capitalmall, Lend lease (Parkway parade etc) etc. They hv phyiscal assets to back it. But the yield is too low now (2-3%).

If U are a moderate risk profile. Can look at Reit or dividend stock. Just need to be patience for mkt to have big correction.


rdgs,
Vic

[starrynight]

Thanks Vic! I am mid level risk. Have the following currently:
a. 2.5% Olam maturity Sept 2013
b. 6% Nam Cheong maturity Nov 2015

All bought at IPO.

My banker advised that the Guthrie corp bonds will likely be launched next week. No word on indicative yield yet.

This Biosensors bond is more for higher risk appetite investor. Only your banker is able to access your risk profile.

For new investor, better buy Lippomall , Capland, OUE (mandarin Orchard etc), capitalmall, Lend lease (Parkway parade etc) etc. They hv phyiscal assets to back it. But the yield is too low now (2-3%).

If U are a moderate risk profile. Can look at Reit or dividend stock. Just need to be patience for mkt to have big correction.


rdgs,
Vic

[starrynight]

BTW Vic, are you comfortable sharing what platform you use to buy and sell bonds?

I'm using DBS Treasures, and it costs me 0.25% each way. How about yours? I heard that stockbrokers were able to go as low as 0.18% for selected bonds. My banker insists that 0.20% is only for bank staff and private banking customers.

If you are using a bank, from your experience, does the bank's buy or sell price vary significantly from the prices quoted on Bloomberg? Some people told me the gap can be quite significant (when you consider it is SGD250k per lot)?

This Biosensors bond is more for higher risk appetite investor. Only your banker is able to access your risk profile.

For new investor, better buy Lippomall , Capland, OUE (mandarin Orchard etc), capitalmall, Lend lease (Parkway parade etc) etc. They hv phyiscal assets to back it. But the yield is too low now (2-3%).

If U are a moderate risk profile. Can look at Reit or dividend stock. Just need to be patience for mkt to have big correction.


rdgs,
Vic

[buttercarp]

BTW Vic, are you comfortable sharing what platform you use to buy and sell bonds?

I'm using DBS Treasures, and it costs me 0.25% each way. How about yours? I heard that stockbrokers were able to go as low as 0.18% for selected bonds. My banker insists that 0.20% is only for bank staff and private banking customers.

If you are using a bank, from your experience, does the bank's buy or sell price vary significantly from the prices quoted on Bloomberg? Some people told me the gap can be quite significant (when you consider it is SGD250k per lot)?

Hi I found this website but I don't know whether there are any changes to it as it was dated 11/09/2011.

http://www.investinpassiveincome.com...best-platform/

Note :
The article says :

As you can see, only Standard Chartered Online Trading really stands out from the other online brokerages with no minimum fees. It’s a huge cost saver especially if you buy in small lots or practice dollar cost averaging. The only real drawback is the fact that your stock holdings are held in custodian accounts by SCB.

[Laguna]

Hi Laguna,Vic,
With CM7, what doyou think of the bond prices of those issued by the property developer, like Lippo, Capital land and etc.

security : Investable grade
yield : u need to check

Lippo is huge, and Indo property market is up and up

[Laguna]

Hi I found this website but I don't know whether there are any changes to it as it was dated 11/09/2011.

http://www.investinpassiveincome.com...best-platform/

Note :
The article says :

As you can see, only Standard Chartered Online Trading really stands out from the other online brokerages with no minimum fees. It’s a huge cost saver especially if you buy in small lots or practice dollar cost averaging. The only real drawback is the fact that your stock holdings are held in custodian accounts by SCB.

Yes, i paid 0.18% without minimum.
If u are not using any leverage, it is ok to be in SCB custodian.
I take leverage from them...so ok with me...

[Laguna]

Thanks Vic! I am mid level risk. Have the following currently:
a. 2.5% Olam maturity Sept 2013
b. 6% Nam Cheong maturity Nov 2015

All bought at IPO.

My banker advised that the Guthrie corp bonds will likely be launched next week. No word on indicative yield yet.

There are many bond issues these two months, you can check with your RM for more details.

[Laguna]

BTW Vic, are you comfortable sharing what platform you use to buy and sell bonds?

I'm using DBS Treasures, and it costs me 0.25% each way. How about yours? I heard that stockbrokers were able to go as low as 0.18% for selected bonds. My banker insists that 0.20% is only for bank staff and private banking customers.

If you are using a bank, from your experience, does the bank's buy or sell price vary significantly from the prices quoted on Bloomberg? Some people told me the gap can be quite significant (when you consider it is SGD250k per lot)?

I checked with all 3 locals, and decided not to use them as in totality, for sales charge, products, and financing cost and expertise, there are still some gaps.

The spread in OTC depends on many factors : liquidity and crisis or not.

[buttercarp]

Yes, i paid 0.18% without minimum.
If u are not using any leverage, it is ok to be in SCB custodian.
I take leverage from them...so ok with me...

If SCB is the custodian, are they considered the owners of what you have bought? Or is there an agreement that it belongs to you no matter what happens to them?

You leverage from them, meaning you borrow the capital from them?

So if something happens to them, they don't return the things you bought, you don't need to return the money?
Is that how it works ?

[starrynight]

Buttercup, thanks for the post and advice. The info you posted applies for stocks, i.e. unfortunately not for bonds, I believe.

For stocks, do note that if you pay cash up front, instead of on T+3, DBS Vickers charges only 0.18% comission

Hi I found this website but I don't know whether there are any changes to it as it was dated 11/09/2011.

http://www.investinpassiveincome.com...best-platform/

Note :
The article says :

As you can see, only Standard Chartered Online Trading really stands out from the other online brokerages with no minimum fees. It’s a huge cost saver especially if you buy in small lots or practice dollar cost averaging. The only real drawback is the fact that your stock holdings are held in custodian accounts by SCB.

[starrynight]

There are many bond issues these two months, you can check with your RM for more details.

Thanks Laguna - both Biosensors and Guthrie are names I like. I applied for 1 lot of Biosensors, and will consider Guthrie after the terms are know.

[cbsh38584]

Thanks Laguna - both Biosensors and Guthrie are names I like. I applied for 1 lot of Biosensors, and will consider Guthrie after the terms are know.

I am also applying for Biosensors 2lots( 500k). Latest Coupon is 4.875%
Hopefully, can get 1 lot (250k).

LTV is 65% for Biosensors. So I only come out 87.5k. My nett yield is actually ($12.18/87.5) - 1.3% (interest rate+custodian fee) = 12.7%.

I dont use local bank because they are too conservative. They want to protect the clients from taking risk by leverging.

Foreign banks let you take all the risk you want. I am taking 2010-2014 window period opportunities to earn as much as possible through leveraging as the interest rate is low. Will slowly reduce my bond holdings in 2014 esp the PERP BOND.


rdgs,
Vic

[starrynight]

Thanks Vic for the enlightenment!

Quick question if you don't mind: does your bank offer you buy / sell price quotes for bonds which are close to the prices quoted on the Bloomberg terminal? The "gap" for DBS is sometimes quite significant.

I am also applying for Biosensors 2lots( 500k). Latest Coupon is 4.875%
Hopefully, can get 1 lot (250k).

LTV is 65% for Biosensors. So I only come out 87.5k. My nett yield is actually ($12.18/87.5) - 1.3% (interest rate+custodian fee) = 12.7%.

I dont use local bank because they are too conservative. They want to protect the clients from taking risk by leverging.

Foreign banks let you take all the risk you want. I am taking 2010-2014 window period opportunities to earn as much as possible through leveraging as the interest rate is low. Will slowly reduce my bond holdings in 2014 esp the PERP BOND.


rdgs,
Vic

[Laguna]

I am also applying for Biosensors 2lots( 500k). Latest Coupon is 4.875%
Hopefully, can get 1 lot (250k).

LTV is 65% for Biosensors. So I only come out 87.5k. My nett yield is actually ($12.18/87.5) - 1.3% (interest rate+custodian fee) = 12.7%.

I dont use local bank because they are too conservative. They want to protect the clients from taking risk by leverging.

Foreign banks let you take all the risk you want. I am taking 2010-2014 window period opportunities to earn as much as possible through leveraging as the interest rate is low. Will slowly reduce my bond holdings in 2014 esp the PERP BOND.


rdgs,
Vic

I will be add on Credit Sus as for LTV upfront, however, find their pricing not attractive for the 1.5% advisory fee yearly.

Same opinion as local banks, pricing and products are not attractive.

Same time frame reading.....

[jeaprp]

I am also applying for Biosensors 2lots( 500k). Latest Coupon is 4.875%
Hopefully, can get 1 lot (250k).

LTV is 65% for Biosensors. So I only come out 87.5k. My nett yield is actually ($12.18/87.5) - 1.3% (interest rate+custodian fee) = 12.7%.

I dont use local bank because they are too conservative. They want to protect the clients from taking risk by leverging.

Foreign banks let you take all the risk you want. I am taking 2010-2014 window period opportunities to earn as much as possible through leveraging as the interest rate is low. Will slowly reduce my bond holdings in 2014 esp the PERP BOND.




rdgs,
Vic

May i know if the (interest + custodian) 1.3% is locked in with the same tenor as the bond?
Or is it floating rate like the mortgage loan

[Rosy]

May i know if the (interest + custodian) 1.3% is locked in with the same tenor as the bond?
Or is it floating rate like the mortgage loan

No need 2nd guess. It is floating rate.

1.3% is a very good rate.

[Rosy]

It is quite risky to leverage on corp bonds now. Even interest rate do not rise much, there maybe a sell off on bonds for investors to enter the stock markets anytime soon.

[jeaprp]

No need 2nd guess. It is floating rate.

Then u got hit 2x when interest rate goes up.
Lower bond price, and higher interest expense.
hmmm.....

[starrynight]

Yup, but that's why it's for the skilled people like Vic and Laguna and not the average dude on the street. Need to watch actively and be resolute in selling / unwinding the leverage quickly, which is not something most people are willing to do by human nature.

Then u got hit 2x when interest rate goes up.
Lower bond price, and higher interest expense.
hmmm.....

[Rosy]

Yup, but that's why it's for the skilled people like Vic and Laguna and not the average dude on the street. Need to watch actively and be resolute in selling / unwinding the leverage quickly, which is not something most people are willing to do by human nature.

It applies to any other forms of trading. It is always difficult to cut loss.

[jeaprp]

Yup, but that's why it's for the skilled people like Vic and Laguna and not the average dude on the street. Need to watch actively and be resolute in selling / unwinding the leverage quickly, which is not something most people are willing to do by human nature.

Unless u are a preferred client of the banker, u will prolly be last to react when crisis comes.

[stl67]

No need 2nd guess. It is floating rate.

1.3% is a very good rate.

with CM7 and expected lower transacted and bank loans, do you think the mortgage rate charged by the bank will be lower, maybe 0.75% + sibor?

[chiaberry]

It is quite risky to leverage on corp bonds now. Even interest rate do not rise much, there maybe a sell off on bonds for investors to enter the stock markets anytime soon.

Agree. It's a bit too late to enter the bond market now. They have run up recently and with interest rates creeping up, the yields are becoming unattractive. Heard that people are selling off to enter equities this year.

[jeaprp]

Agree. It's a bit too late to enter the bond market now. They have run up recently and with interest rates creeping up, the yields are becoming unattractive. Heard that people are selling off to enter equities this year.

Equity more liquid and lower quantum, Bond is like luxury PC, equity is mass mkt.

[Laguna]

To my knowledge, there are 5 issues this week.
The quality of bonds is mix.
If u are buying now, yield shall not be the only factor you should look at. The quality like security, cash flow, term, profitability is now far more important.

A lot of companies are now issuing bonds in the debt market to cash in with the low interest cost.