BOND THREAD

[starrynight]

FYI - perps not my kinda thing, but...

SGD Bond Alert : Swiber Glaring At Me

by tradehaven It wasn't me because I am usually not the most attentive person around which makes it good to have old friends who are complementary partners to my life.
Swiber came up over lunch yesterday and hold on to your horses here, the senior Swiber perpetual is up 3.8% this year. Its cash price has fallen from 98.00 to somewhere between 92 to 94 just on Friday. We are looking at yield to 09/2015 call levels of 12.56% - 13.55% here.
This is one of the few senior perpetuals around abeit its small issue size of SGD 80 mio.
Scanning at news headlines, we do not seem to have anything major and its equity price is holding up. Kim Eng Securities issued an overweight call on offshore marine companies early last month.
I run through the rest of the Swibers and they do not appear too poorly off. In fact, the Swiber senior 06/2015 yield has fallen 0.12% since 31 Dec 12.
Comparables like Ezra and Ezion are holding up too which makes this Swiber perpetual glare out at me like a sore thumb.

Granted, they have SGD 230 mio of debt to refinance this year and another SGD 164 mio next year and their market capitalisation is holding at SGD 418 mio, their earnings are expected to be announced on 27 Feb.
I am too chicken to make an outright Buy call on the Swiber senior perp. But if you happen to be holding on to some China Central Real Estate CENCHI10.75 04/2016, you may want to know that its price has risen 2.5 cents since end 12 and it is quoted at the 110 handle now ie. 6.9-ish%. Property rhetoric out of China has been discouraging. Therefore, a switch into our local Swiber may not be a bad idea for a bond that could be called 9 months earlier at 09/2015 ?

[Iamderek]

I should really start buying the lottery.

Not anymore... news from this morning

WASHINGTON: Rating agency Moody's cut Britain's debt rating Friday by one notch from the top-grade AAA to Aa1, citing slow growth and a rising debt burden.

Moody's also cut its AAA rating for the country's central bank, the Bank of England, by one step, also to Aa1.

The main driver for the sovereign downgrade, Moody's said, "is the increasing clarity that, despite considerable structural economic strengths, the UK's economic growth will remain sluggish over the next few years."

The British economy is constrained both by the turgid global economy, Moody's said, and the drag from businesses and the British government slashing their debt burdens.

Moody's said the country's recovery has proven to be significantly slower than previous rebounds from recession, and Moody's said it did not expect the situation to change.

"Moreover, while the government's recent Funding for Lending Scheme has the potential to support a surge in growth, Moody's believes the risks to the growth outlook remain skewed to the downside."

Moody's said that slow growth would retard a projected rise in tax revenues and make progress difficult for the government's fiscal consolidation program, "which will now extend well into the next parliament."

Meanwhile, the government's growing debt load would reduce the shock-absorption capacity of government finances at least into 2016.

Moody's projected that government debt would continue to rise and peak at 96 per cent of gross domestic product in 2016, much later than previous projections.

"After it was elected in 2010, the government outlined a fiscal consolidation program that would run through this parliament's five-year term and place the net public-sector debt-to-GDP ratio on a declining trajectory by the 2015-16 financial year," ratings agency said.

"Now, however, the government has announced that fiscal consolidation will extend into the next parliament, which necessarily makes their implementation less certain."

Moody's however put Britain on a stable outlook, guardedly confident that political will combined with some medium-term fundamental economic strengths "will, in time, allow the government to implement its fiscal consolidation plan and reverse the UK's debt trajectory."

- AFP/jc

[cbsh38584]

I attended a investment seminar talk by Dr Tan at the ART house yesterday. I was very surprised that this GURU predicted that STI index will drop >20% .Long dated & perp Bond will also drop.

I really do not know him & not sure his past prediction is accurate. Anyway, I am going to take profit on some of my bond holdings to reduce my leverage


S$250k - Central China real estate 10.75% [email protected] price@110
US$300k - ABN USD bond 6.25% (bought@100) Price@108
CNY$1.5m - Evergrande CNY 7.5% (Bought@98) Price@101


S&P is at record high (high floor) . VIX index is at record low (low floor) . So I will switch to Amundi Funds Absolute Volatility World Equities (VIX).

rdgs,
Vic

[starrynight]

When you buy again, please let those of us in the forum who are less savvy know please

I attended a investment seminar talk by Dr Tan at the ART house yesterday. I was very surprised that this GURU predicted that STI index will drop >20% .Long dated & perp Bond will also drop.

I really do not know him & not sure his past prediction is accurate. Anyway, I am going to take profit on some of my bond holdings to reduce my leverage


S$250k - Central China real estate 10.75% [email protected] price@110
US$300k - ABN USD bond 6.25% (bought@100) Price@108
CNY$1.5m - Evergrande CNY 7.5% (Bought@98) Price@101


S&P is at record high (high floor) . VIX index is at record low (low floor) . So I will switch to Amundi Funds Absolute Volatility World Equities (VIX).

rdgs,
Vic

[cbsh38584]

When you buy again, please let those of us in the forum who are less savvy know please

I take a higher risk in my investment. You are more of a low risk profile. Evergrande (4th largest property developer in China) dropped to 65 (Capland drop to 88) during the Greece crisis in 2011. Recovered to 92. Then drop to 78 in 2012 when Muddy water said that Evergrande has accounting issues. Now price is 101. So I dont think U can stomach this kind of risk. I bought evergrande because CNY appreciation (6.54 to 6.24) & I am betting they will not default, not because they are like capitaland that of quality company.

As Central china real esate SGD bond, capland is one of the majority share holder. This is the reason I buy this bond. Nobody dares to touch Chinese developer bond due to the S-chip accounting fraud issues listed in SGX.

rdgs,
Vic

[Werther]

I attended a investment seminar talk by Dr Tan at the ART house yesterday. I was very surprised that this GURU predicted that STI index will drop >20% .Long dated & perp Bond will also drop.

I really do not know him & not sure his past prediction is accurate. Anyway, I am going to take profit on some of my bond holdings to reduce my leverage


S$250k - Central China real estate 10.75% [email protected] price@110
US$300k - ABN USD bond 6.25% (bought@100) Price@108
CNY$1.5m - Evergrande CNY 7.5% (Bought@98) Price@101


S&P is at record high (high floor) . VIX index is at record low (low floor) . So I will switch to Amundi Funds Absolute Volatility World Equities (VIX).

rdgs,
Vic

Is the speaker dr tan kee wee?

[cbsh38584]

Is the speaker dr tan kee wee?

The speaker is Tan Kee Wee. Do U attend his past investment seminar b4 ?
He sound very confident that STI will drop >20% . This is the 1st time my brother-in-law has asked me to attend his seminar. I do not know him at all.

Because of his talk, I decided to take some profit on my bond holdings & buy VIX fund which is at very low level (price @132.5. Min USD$50k). Where S&P index is at all time high.



rdgs,
Vic

[starrynight]

Thanks, and I understand. My risk appetite is certainly lower than yours. But still helpful to know what / when the experts are buying.

Look forward to learning from you

I take a higher risk in my investment. You are more of a low risk profile. Evergrande (4th largest property developer in China) dropped to 65 (Capland drop to 88) during the Greece crisis in 2011. Recovered to 92. Then drop to 78 in 2012 when Muddy water said that Evergrande has accounting issues. Now price is 101. So I dont think U can stomach this kind of risk. I bought evergrande because CNY appreciation (6.54 to 6.24) & I am betting they will not default, not because they are like capitaland that of quality company.

As Central china real esate SGD bond, capland is one of the majority share holder. This is the reason I buy this bond. Nobody dares to touch Chinese developer bond due to the S-chip accounting fraud issues listed in SGX.

rdgs,
Vic

[Werther]

The speaker is Tan Kee Wee. Do U attend his past investment seminar b4 ?
He sound very confident that STI will drop >20% . This is the 1st time my brother-in-law has asked me to attend his seminar. I do not know him at all.

Because of his talk, I decided to take some profit on my bond holdings & buy VIX fund which is at very low level (price @132.5. Min USD$50k). Where S&P index is at all time high.



rdgs,
Vic

Hi Vic

I have been following his article and he has a web - www.keeweetan. Interesting and light to read.

Maybe i read too much and I missed my boat on property...I only blame myself now.

[cbsh38584]

Thanks, and I understand. My risk appetite is certainly lower than yours. But still helpful to know what / when the experts are buying.

Look forward to learning from you

Just need one of my bond holdings default. It will spoil all my goal of 200k/yr tgt. I hv never gone through the BOND CRISIS b4 as I start investing in bond only in 2010. So I am not a expert. I am more hard working & very focus in learning about bond investment as a alternative.

I was told in Dec12 that UOB clients hv a margin call on OLAM bond. They need to top up if not there will be a FORCE selling. The amt is 250k. So must be very careful.

You may ask your banker on the VIX fund view. Maybe a good time to buy as there is so much problems ahead.

rdgs,
Vic

[roly8]

Hi Vic

I have been following his article and he has a web - www.keeweetan. Interesting and light to read.

Maybe i read too much and I missed my boat on property...I only blame myself now.

money isn't everything la..

just don't miss the boat to keep your health in good shape...can liao..

[Werther]

money isn't everything la..

just don't miss the boat to keep your health in good shape...can liao..

Hi Roly

Sure, thanks for the reminder!

[buttercarp]

Hi Vic

I have been following his article and he has a web - www.keeweetan. Interesting and light to read.

Maybe i read too much and I missed my boat on property...I only blame myself now.

I haven't read his web page yet as I can't seem to get into it.
You missed the property boat due to his articles?
That means bo zhun?
Or is it open ended n you made your own decision?

[Werther]

Hello buttercarp

I also don't know leh.

Maybe I am too pessimistic...that's why MTB. I don know what to say....

[buttercarp]

Hello buttercarp

I also don't know leh.

Maybe I am too pessimistic...that's why MTB. I don know what to say....

I can't access the web page you provided.
Any other alternative?
I listen to Dr Tan Kee Wee on and off and I find him sensible, so I am keen to read for myself what you have read.

Since our bond expert Vic is taking his advice, I'd better be careful about the stock market.

[Werther]

I can't access the web page you provided.
Any other alternative?
I listen to Dr Tan Kee Wee on and off and I find him sensible, so I am keen to read for myself what you have read.

Since our bond expert Vic is taking his advice, I'd better be careful about the stock market.

My bad. Try tankeewee.com.

[Laguna]

I have cleared quite about 50% of bonds last two weeks.

[starrynight]

Laguna,

Just to understand, could you share your rationale? For example, do you think the prices are due for a >3% correction in the foreseeable future?

I have cleared quite about 50% of bonds last two weeks.

[buttercarp]

I have cleared quite about 50% of bonds last two weeks.

The sign is quite clear.

Govt make it difficult for us to over stretch financially.
Famous economist predict STI drop >20% (as posted by cbsh).
Laguna dumping bonds.

Bro BJ.... I remember you said in your celestial prediction about something will rock the stock market?
Can share more, please?

[starrynight]

Going off tangent, but anyone applied via placement for Mapletree Greater China Commercial Trust?

I'm waiting to see the placement allocation before deciding whether to whack at the ATM for a quick stag

[buttercarp]

Going off tangent, but anyone applied via placement for Mapletree Greater China Commercial Trust?

I'm waiting to see the placement allocation before deciding whether to whack at the ATM for a quick stag

Aiyo this one I was very enthusiatic, but no guts to go in.
You go read their prospectus Page 53 and 54.
I am worried about that.

Tomorrow can start applying at ATM.


http://forums.hardwarezone.com.sg/st...104161-18.html
Prospectus Link: H E R E

Price: $0.93

Total Offering: 776,636,000 Units (511,279,000 Placement; 265,357,000 Public inc 50,304,000 Reserved units)

Capitalisation: S$4,410,010,328

Expected yield: 5.6% (1 Apr 13 - 31 Mar 14); 6.1% (1 Apr 14 - 31 Mar 15)

Expected DPU: 5.24c (1st yr) 5.69c (2nd yr)

[starrynight]

I'll wait till I know the sentiment / over-subscription before I apply

Aiyo this one I was very enthusiatic, but no guts to go in.
You go read their prospectus Page 53 and 54.
I am worried about that.

Tomorrow can start applying at ATM.


http://forums.hardwarezone.com.sg/st...104161-18.html
Prospectus Link: H E R E

Price: $0.93

Total Offering: 776,636,000 Units (511,279,000 Placement; 265,357,000 Public inc 50,304,000 Reserved units)

Capitalisation: S$4,410,010,328

Expected yield: 5.6% (1 Apr 13 - 31 Mar 14); 6.1% (1 Apr 14 - 31 Mar 15)

Expected DPU: 5.24c (1st yr) 5.69c (2nd yr)

[Laguna]

Laguna,

Just to understand, could you share your rationale? For example, do you think the prices are due for a >3% correction in the foreseeable future?

Technically, the price is toppish. The price will not be very much higher from now on, other than those graded as high yield.

I liquidated those with 4.5% yield and keeping those with >5.5% yield.

Switching over to equity as market is now having a correction, good timing to move in. I expect, high yield quality equity is a better play this time.

[starrynight]

Thanks!

I'll look to buy the Biosensors and/or Cambridge Industrial Trust ones if the prices correct.

Technically, the price is toppish. The price will not be very much higher from now on, other than those graded as high yield.

I liquidated those with 4.5% yield and keeping those with >5.5% yield.

Switching over to equity as market is now having a correction, good timing to move in. I expect, high yield quality equity is a better play this time.

[roly8]

haiz..
actually me don't advise trading stocks or bond..very risky..

just be careful and exit on time....

[starrynight]

Vic,

I guess you probably know this already, but you can buy / short VIX index on the CFD platforms. I use IG Markets, and see it listed.

The speaker is Tan Kee Wee. Do U attend his past investment seminar b4 ?
He sound very confident that STI will drop >20% . This is the 1st time my brother-in-law has asked me to attend his seminar. I do not know him at all.

Because of his talk, I decided to take some profit on my bond holdings & buy VIX fund which is at very low level (price @132.5. Min USD$50k). Where S&P index is at all time high.

rdgs,
Vic

[starrynight]

Mapletree Greater China Trust to fix IPO price at the top

By Anette Jönsson | 27 February 2013 The trust raises $1.3 billion from the deal, which is heavily subscribed by institutional investors and ranks as the largest Reit IPO in Singapore ever.


Mapletree Greater China Commercial Trust (MGCCT) is expected to price its initial public offering at the top of the range today after attracting huge interest from institutional investors, sources say. This will allow it to raise S$1.61 billion ($1.3 billion) from what will be the largest IPO by a real estate investment trust (Reit) in Singapore ever.


The Reit, which has two commercial assets in its initial portfolio, including the popular Festival Walk shopping centre in Hong Kong, is selling 65% to public investors, while 35% will be bought by entities owned by the Mapletree Group. However, the deal comes with a greenshoe option of all secondary shares that could change that ratio to 68% versus 32%.


The deal was well oversubscribed already on the first day and continued to build from there, attracting a wide range of investors — global long-only funds, real estate specialists, institutions based in Malaysia and Singapore, hedge funds, private banking clients and corporate investors all wanted a piece of the pie.


The deal wasn’t open to onshore US investors, but many of them still came into the deal through overseas entities.


When the subscription closed early yesterday morning Hong Kong time, the portion of the deal available to institutional investors other than the cornerstones was more than 30 times covered and had attracted between 300 and 400 investors, according to sources.


That portion accounts for just 29.6% of the base deal, or about S$550 million ($444 million) including the greenshoe, which means there aren’t that many units to go around. Investors obviously knew this and there was quite a bit of inflation in the order book towards the end. The sources estimated that many investors will end up with no units at all.


The rest of the base offering will go to the 11 cornerstones (55.1%), which get a guaranteed allocation, and to retail investors and parties associated with the Mapletree group (15.3%). MGCCT was offering 1.73 billion units to public investors and cornerstones through the base deal, and may sell an additional 79.851 million units through the greenshoe. If the latter is exercised in full, it will boost the total proceeds to S$1.68 billion ($1.4 billion).


MGCCT is expected to fix the price at S$0.93 per unit, after marketing the deal at a price between S$0.88 and S$0.93. This comes as no surprise since the bookrunners were telling investors at the end of last week that the offering was likely to be priced at the top. The great majority of the orders were already at strike and on the back of that guidance, most of the rest of the investors removed their price limits too.


Hence, even though global stock markets have taken a beating since the US trading session on Monday and the Singapore market fell 1.1% yesterday, there is really no reason for MGCCT to price off the top. Particularly since many investors buy Reits for the yield and therefore tend to hold on to them for a bit.


At the final price of S$0.93, MGCCT is offering an implied yield of 5.6% for the fiscal year to March 2014, and 6.1% for the 12 months to March 2015. The projected increase in the dividend yield for the second year is based solely on organic growth assumptions, including step-up rents, renewals of expiring leases, new leases and growth in turnover rent. Any potential acquisitions, asset enhancement initiatives or redevelopment works could lift the yield even further.


The yield is viewed to be quite attractive versus its key comparables, particularly Link Reit which trades at a one-year forward yield of about 3.6%, according to one syndicate research report. Hong Kong-listed Link Reit owns and operates a large number of retail assets formerly owned by the Hong Kong government and is viewed as a key comp since Festival Walk will account for about 76% of the MGCCT’s total property value and 75% of the rental income.


Li Ka-shing-backed Fortune Reit, which focuses on retail properties in Hong Kong and is listed in both Hong Kong and Singapore, is trading at a one-year forward yield of 5.1%, while Hong Kong-listed Champion Reit, which owns both retail and office properties in Hong Kong, is offering a yield of 5.3%.


CapitaRetail China Trust, which is listed in Singapore, but owns and operates retail properties in mainland China, is trading at a 5.7% yield on a one-year forward basis, according to the report.


MGCCT is the fourth Reit to be sponsored by Singapore developer and property owner Mapletree. It will focus on commercial real estate in Hong Kong and in first and second tier cities in China. In addition to Festival Walk, it will also own the Gateway Plaza office complex in Beijing at the time of listing. The two properties have a combined valuation of S$4.3 billion ($3.5 billion).


The high quality of the assets was a key selling point, as was the Mapletree sponsorship, as investors have done pretty well from the company’s other three Reits. Investors also liked the fact that MGCCT doesn’t have any form of structuring to artificially increase the dividend payout — although the yield is supported by a gearing of about 40%.


Based on the top-end pricing, the cornerstones will invest a combined $716 million in the deal. However, some of them wanted a top-up on their guaranteed allocation and submitted orders through the main institutional book as well, one source said.


The largest among the cornerstones are real estate specialist CBRE Clarion Securities and Norges Bank Investment Management, the manager of Norway’s oil revenues, which will each invest about $99.7 million.
The other cornerstones are: Henderson Global Investors ($85.3 million), Newton Investment Management ($80.7 million), AIA ($69.3 million), Hwang Investment Management ($69.3 million), Morgan Stanley Investment Management ($50 million), Asdew Acquisitions ($40.4 million), Columbia Wanger ($40.4 million), Myriad Asset Management ($40.4 million), and Phileo Capital ($40.4 million).


Citi, DBS, Goldman Sachs and HSBC were joint bookrunners for the IPO. MGCCT is due to start trading on March 7, once the retail offering has also been completed.

Aiyo this one I was very enthusiatic, but no guts to go in.
You go read their prospectus Page 53 and 54.
I am worried about that.

Tomorrow can start applying at ATM.


http://forums.hardwarezone.com.sg/st...104161-18.html
Prospectus Link: H E R E

Price: $0.93

Total Offering: 776,636,000 Units (511,279,000 Placement; 265,357,000 Public inc 50,304,000 Reserved units)

Capitalisation: S$4,410,010,328

Expected yield: 5.6% (1 Apr 13 - 31 Mar 14); 6.1% (1 Apr 14 - 31 Mar 15)

Expected DPU: 5.24c (1st yr) 5.69c (2nd yr)

[buttercarp]

"The sources estimated that many investors will end up with no units at all."

Looks like have to buy from open market.

What is the trend usually?

Will the cornerstone investors let go immediately since they are not subjected to any lock up period?

I am new to trading and am struggling to understand the psychology of investors.

[cbsh38584]

Vic,

I guess you probably know this already, but you can buy / short VIX index on the CFD platforms. I use IG Markets, and see it listed.

I know I can buy/short VIX index. But it is very volatile. Because of Our weakness emotional trading behaviour, trading VIX is a NO. Chances 99% will lose in long run. I prefer VIX fund which now trading a low price where S&P index is trading a record high price.



rdgs,
Vic

[starrynight]

Usually for a hot IPO / bond issuance, some people will apply for more than they want cos they know they are likely to get only a (small?) fraction of what they apply for.

Cornerstones sometimes have a lock-in period. IPO prospectus will have that info - I don't know for this one. But from what I can see, whilst I'm not familiar with some of them names, they look like they are in it for the long run.

As a retail investor, I will not chase this one if I don't get placement / retail offer. Don't know what the institutions will do

Strange trend for public offers in the past 6 months is that they tend to give a higher % likelihood of getting something to the people apply for smaller lots. Opposite of the usual practice in the past.

I'll likely try applying 500 lots.

"The sources estimated that many investors will end up with no units at all."

Looks like have to buy from open market.

What is the trend usually?

Will the cornerstone investors let go immediately since they are not subjected to any lock up period?

I am new to trading and am struggling to understand the psychology of investors.