BOND THREAD

[ysyap]

My girl booked the air ticket last month for the coming long weekend in HK next week to enjoy our fresh air. I have to tell her that our air is worst than HK now.

Now Singaporeans are flying over to enjoy their fresh air...

[ysyap]

Thank for your valuable input.
I have been through 97/98 & 08/09 crisis. But not the bond crisis in 1994. Hv no idea what it like. So I am very careful in holding more bond especially toward 2014.

Are U aware TradeHaven bond forum website? This guy is quite knowledgeable in bond.

rdgs,
Vic

So you think going forward, bonds is risky entering 2014?

[cbsh38584]

So you think going forward, bonds is risky entering 2014?

Because of the Cheap money. Many investors like me is borrowing a few hundred thousand to million @1% plus to buy high yield bond. I am Afraid that once the interest rate start to go up fast in 2014, many bond investors who took leveraging will rush toward the same exit .It may causes big drop in bond price. The big drop in bond price may result in margin call.

Those bond investors buy short dated bond + no leveraging. They are quite safe.

rdgs,
Vic

[stl67]

ok lah, join u guys and buy lah.

I no more bullet to join you guys... Sianz....lesson learn

[Laguna]

I no more bullet to join you guys... Sianz....lesson learn

What happened to you?

I will be liquidating my HY quite soon. .

[phantom_opera]

10y UST hit my target of 2.5% so soon ... looks like likelihood of overshot is high

5y UST touching 1.4% .. looks like even PIMCO got it wrong

[phantom_opera]

7y looks like a rocket

[spring77]

Yes, I've using tradehaven website for bonds investment. Find it extremely useful & helpful to plan for bond investment.

Market sentiments can change very fast. QE was unprecedented & hence investors fear the worst when they lacked information. It should be blown over before we realized it. We could have already crossed the worst point.

I realized that from 2004 to 2007, both OCBC 4.2% & DBS 6% prices were quite stable even when SGD & USD interest rate moved from both under 1% to >3% & 6% respectively (last 10 years' peak) Are we expecting both borrowing cost to hit 3% & 6% anytime soon especially with many parts of our world showing weakness. High rates will also hit US badly with 16 trillions national debts. Before long, US will revert to low borrowing cost when reality bites.

Other than fear, there is no other logical explanation. Of course, one needs to more careful with junk bonds. Especially those with traditional double digital coupons, now reduced to 4%-6%. One may want to stick with local companies' SGD bonds for more stability.




QUOTE=cbsh38584]Thank for your valuable input.
I have been through 97/98 & 08/09 crisis. But not the bond crisis in 1994. Hv no idea what it like. So I am very careful in holding more bond especially toward 2014.

Are U aware TradeHaven bond forum website? This guy is quite knowledgeable in bond.

rdgs,
Vic[/QUOTE]

[ysyap]

Because of the Cheap money. Many investors like me is borrowing a few hundred thousand to million @1% plus to buy high yield bond. I am Afraid that once the interest rate start to go up fast in 2014, many bond investors who took leveraging will rush toward the same exit .It may causes big drop in bond price. The big drop in bond price may result in margin call.

Those bond investors buy short dated bond + no leveraging. They are quite safe.

rdgs,
Vic

Ok... I have the same concerns about the end of QE and am considering whether to buy bonds or not? Stocks might go up and bonds might come down but is it fear or fundamentals that is dictating?

[cbsh38584]

I no more bullet to join you guys... Sianz....lesson learn

Sometimes, we tend to repeat our mistakes again & again. Human memory are short & tend to forget mths or years later. Why ? Because we will be brain wash by the CNBC , Bloomberg Media , bank research recommendation analyst, stock GURU analyst again. Till now, I still make mistakes but lesser. Laguna has a "AAA" rating for patience. Only buy when there is a fear.

I have already made est $30k on stock. But my current stock holding + some ELN paper loss is est 60k. But they are RED chip & strike close to 52 weeks low. Due to the recent drop, it went below the 52 weeks low. It may recover by dec13.

Just bought small amt to buy Croesus retail trust. Dividend yield 8%. Drop from 1.16 to 0.935. May look into SPH using CPF.



rdgs,
Vic

[phantom_opera]

borrow from zerohedge chart, signal to take note

[phantom_opera]

technically we have quite a few "sell" signals

[newbie11]

Just bought small amt to buy Croesus retail trust. Dividend yield 8%. Drop from 1.16 to 0.935. May look into SPH using CPF.
rdgs,
Vic

the trust no guarantee it will pay dividend unlike reit.

[newbie11]

Just bought small amt to buy Croesus retail trust. Dividend yield 8%. Drop from 1.16 to 0.935. May look into SPH using CPF.
rdgs,
Vic

the trust no guarantee it will pay dividend unlike reit.

[cbsh38584]

The stock market is the largest casinos in the world. Don't fall into the trap set up by the manipulator. That is why I say be very very patience. Every year , there will be at least one correction. Every few yrs (5 to 10), there will be a big crisis.

The biggest drop in gold price within weeks in the 30 yrs history & the rate on the benchmark 10-year U.S. note jumped 12 basis points to >2.54% is biggest weekly increase in a decade. It can take 1 yr to rise from eg 3000 to 3400. It can take just weeks to drop back from 3400 to 3000.

I am punished for my less patience. I started to do more ELN in Feb/Mar & now it is 10% to 15% drop. But will able to ride through this big correction.

It seem that majorities of investment grade straight bond & high yield bond mature in 2016 is till above par. But the Perp bond is doing badly. Drop 6% to 12%. But if U will to include the coupon they hv rec'd. In fact, their losses it min as compare to stock.

rdgs,
Vic

[starrynight]

Interesting article from Tradehaven re picking bottom for corp bonds.

FYI, my friend bought 1 lot of Trikomsel bond today at 98c.

[cbsh38584]

Women are better investors
==================

Women were more likely to be less "GREEDY" than men when come to investing. In the area of behavioural finance, It have found that women trade less frequently and hold less volatile portfolios. Women just want a stable income.


When come to investing, Women will look in the RISK factor as 1st priority. Once the risk is acceptable to them, they will look into the RETURN.They may expect lower returns, watch out for risks, and be willing to sit out for the long term. Men tend to see big PROFIT as 1st priority & sometimes blind by the high risk product they invested. Good investing means that when you are aware of what you don’t know, you steer clear.


women tend to see wealth as a source of security for the family, rather than an opportunity to get richer.They're less interested in taking chances (Risk) when they do have money. Men, meanwhile, are more likely to be confident in taking risky decisions.

Men see wealth as a way to get richer; women see it as a means of security. They realize the money they make goes to support their families, and this makes them less likely to take unnecessary or dangerous risks with their investments. Men tend to have their eye on “more” wealth, while women want “enough” wealth to bring them security.


Women take Less Risk as they are more prone to stress than their male. They don't want to engage in the anxieties of on-the-fly trading, another factor that contributes to their more conservative, and ultimately more successful, investment strategies.

Women Are Patient.
women are more patient with their existing investments, and if they consider a change to their portfolio they are also more likely to consult with a financial advisor first. Men are less patient for a +ve outcome from their investments and more likely to modify their portfolio if they view it is underperforming

Impatience
Men tend to be overconfident about their ability to pick stocks that can beat the market.

etc etc etc.


rdgs,
Vic

If U do not want to be a loser in stock market. learn some good points from Women investors. They are a better investors because the mother can feel more love for this family & want to protect them.

1. They trade less frequently
2. They are less greedy. Greed bring disaster.
3. They want enough wealth & not more wealth
4. They tend not to speculate & stick to good stock.
5. They are less emotional when stock goes down.
6. They are prone to stress.So they don't buy speculative stock.


Stock market is the biggest casinos in the world.
The more U trade, U are less likely U will win in long run.
The more U trade, the more emotional mistakes U tend to make.
The more U trade speculative stk, the more U will accumulate more losses
The more U are impatience, the likelihood U will buy at high price.
The more greed factor in U when trading. The likelihood U doom to destroy your own family happiness.


rdgs,
Vic

[DC33_2008]

Gold has continued to slide and is US$1195 per ounce now.

[phantom_opera]

1 AUD = 1.1668 SGD

Accenture result probably signals something

69.96 -10.26 (-12.80%) ACN

IBM 189.45 -6.20 -3.17%

My insider news on IBM is ... bad ... bad .. bad

[Pikachu1245]

1 AUD = 1.1668 SGD

Accenture result probably signals something

69.96 -10.26 (-12.80%) ACN

IBM 189.45 -6.20 -3.17%

My insider news on IBM is ... bad ... bad .. bad

Few years back, while I visited Australia, the conversion is
1 AUD = about 0.90 to 1 SGD

Wonder will this be the case in the near future?
If so, good to visit Australia again.

[Secretariat]

From the King of Bonds:

http://www.pimco.com/EN/Insights/Pag...ing-Point.aspx

In March, Bill railed against the FED for pushing the yields too low, making risk spreads too high (you could find this in his letter above). Now, he is arguing that yields have jumped too fast.

It is more probable that the markets would do the exact opposite of what he is appealing in this letter.

Cheers!

[starrynight]

From Tradehaven:

SGD Corporate Bonds Outlook : No Keen Bids

by tradehaven Hearing a few client complaints on the street that banks are unwilling to bid for papers or honour prices indicated on screens which vindicates my point last week that most of the prices out there are cosmetic.
No wonder credit spreads look so good. The prices do not hold.
This is not even a credit crisis yet and thus it is slightly alarming.
My advice to folks at home. Do not panic if you really need to sell bonds and do not think of suing your bank because you are a sophisticated investor and expected to understand the risks involved in transacting in the OTC market.
I suggest you leave a sell order with your banker, on best effort basis.
These are heavenly times. They can potentially gorge you on the bid and rip up the offers because somewhere out there, there will be a hapless soul who thinks that paying 100 for Trikomsel or Tata Steel, for example, is a good idea since they missed out on the launch.
Well, there is no time for compassion or sympathy. There are people buying Oxley today.

[starrynight]

New bond issuance today (sorry for delay, as I'm now in US, so 12 hours behind):

Issuer
Oxley Holdings Limited
Status
Senior, unsecured
Rating
Unrated
Format
Off Issuer's SGD300Million Multicurrency Medium Term Note Programme
Tenure
5NC3
Issue Size
TBD
Initial Coupon for first 3 years :
4.75% area
Step-up Coupon for 4th and 5th year :
6.75% area (Step-up of 2.00% from Initial Coupon)
Financial Covenants : (Pls refer pg 17 of IM)
(i)Consol. Tangible Net Worth ≥S$175mil (until 31 Dec 2015) and ≥S$225mil (from 1 Jan 2016 onwards); and
(ii)Consol. Total Borrowings / Consol. Total Assets ≤0.75x (until 30 Jun 2016) and ≤0.70x (from 1 Jul 2016 onwards)
Div. Payout Restriction: (Pls refer pg 17 of IM)
Cash dividend payout ratio cannot exceed 25% of Consolidated EBITDA if the Debt/Equity Ratio is more than 4.0 times.
Price
TBD
Denomination:
SGD250K
Listing
SGX-ST / CDP
Governing Law:
Singapore Law/ Sections 274 and /or 275 of the Singapore SFA
Sole Bookrunner
UOB
Timing
As early as today
Product risk rating
P4 (Sophisticated) ( 1 to 5, 5 being the highest)

[starrynight]

Commentary from Tradehaven:

Oxley 5yr SGD Issue
Cpn 4.75% area for first 3 yrs and if not called, 6.75% for last 2 years.
Financial covenants remain the same as the old issue. (See review written in May below)
I do not know which planet the issuer and the issuing bank think they are from but we have a global credit widening scenario here.
Explained in plain layman terms.
Oxley issued SGD 150 mio in May, right before the crash. That was 4Y at 5.1%. The 4Y interest rate was 0.70% then.
Today the 4Y interest rate is 1.33%. That means if Oxley issued the 4Y today, the coupon should be 5.63% which works to be a cash price of 98.17. This excludes the credit deterioration going on around the world and the impact of the new property loan rulings.
The company is 9 times leveraged (Total Assets/Total Equity) and their interest expense will be soaring through the roof.
One thing for sure : Their equity will not be paying more than 25% of consolidated EBITDA for dividends because 1 financial convenant is already in breach.
My Opinion : Coupon does not justify the risk of this bond.

New bond issuance today (sorry for delay, as I'm now in US, so 12 hours behind):

Issuer
Oxley Holdings Limited
Status
Senior, unsecured
Rating
Unrated
Format
Off Issuer's SGD300Million Multicurrency Medium Term Note Programme
Tenure
5NC3
Issue Size
TBD
Initial Coupon for first 3 years :
4.75% area
Step-up Coupon for 4th and 5th year :
6.75% area (Step-up of 2.00% from Initial Coupon)
Financial Covenants : (Pls refer pg 17 of IM)
(i)Consol. Tangible Net Worth ≥S$175mil (until 31 Dec 2015) and ≥S$225mil (from 1 Jan 2016 onwards); and
(ii)Consol. Total Borrowings / Consol. Total Assets ≤0.75x (until 30 Jun 2016) and ≤0.70x (from 1 Jul 2016 onwards)
Div. Payout Restriction: (Pls refer pg 17 of IM)
Cash dividend payout ratio cannot exceed 25% of Consolidated EBITDA if the Debt/Equity Ratio is more than 4.0 times.
Price
TBD
Denomination:
SGD250K
Listing
SGX-ST / CDP
Governing Law:
Singapore Law/ Sections 274 and /or 275 of the Singapore SFA
Sole Bookrunner
UOB
Timing
As early as today
Product risk rating
P4 (Sophisticated) ( 1 to 5, 5 being the highest)

[cbsh38584]

Just let U know that Perp & long dated bond are more affected by the rising interest rate. If US interest rate will to go even higher >2015. Will it go down even lower ? So be very careful if U will to be buy Perp & long dated bond.


Estimate price
=========
Bought Citi pacfic USD Perp 7.875% @97.7 on Jan12.
Sold @99 on Apr13
Price to buy @95 on 1st Jul13

Bought Genting 5.125% SGD Perp @100 on Mar12.
Sold @100.1 on Oct12
price to buy @93 on 1st Jul13

Bought Asscendas Pte 4% SGD due 2049 @100 on Apr12
Sold @100 on July12
Price to buy @100 on 1st Jul13

Bought Noble 8.5% USD Perp @89 on Apr12.
Sold @97.75 on Oct12
Price to buy @98 1st Jul13

Bought Cheung Kong 6.625% Infra-structure USD Perp @94 May12
Sold @98.25 on Aug12
Price to buy @ 961st Jul13

Bought Long dated Keppel Corp 4% SGD Bond due 2042 @100 on Sep12
Immediately sold @100.1 Due to very low LTV30%.
Price to buy est @91. Jun13

Bought Gazprombank 7.875% USD Perp @100.8 Oct12
Sold @102.5 Mar13
Price drop as low as 97. Now price to buy @102 1st Jul13

Bought Agile property 8.25% Chinese developer USD perp@95 on Feb13
Price drop as low as 87. Price Now@91 on 1st Jul13.


--------------------------------------------------------------------------------
Bought Kiase Chinese Ppty 8.825% USD Junk Bond 8.875% @101.8 Mar13.
Price goes up to 108 on May13.
Price drop as low as 89. Now price now @97 1st Jul13

--------------------------------------------------------------------------------
Unable to get Cheung Kong 5.125% SGD Perp bond during IPO.
Price to buy est @94 1st Jul13


rdgs,
Vic

[proxon]

So be very careful if U will to be buy Perp & long dated bond.

Estimate price
=========

Bought Genting 5.125% SGD Perp @100 on Mar12.
Sold @100.1 on Oct12
price to buy @93 on 1st Jul13

rdgs,
Vic

Hi Vic,
Is this Genting bond the same one that is publicly traded at around $1?
The current price is about $1.02
Thanks.

[cbsh38584]

Hi Vic,
Is this Genting bond the same one that is publicly traded at around $1?
The current price is about $1.02
Thanks.

From the expert Tradehaven . 10th of June pricing.
http://tradehaven.me/2013/06/10/good...g-retail-perp/

A significant price discrepancy has developed between the wholesale price of the Genting retail perpetual and the SGX traded price.


Perpetuals are getting clobbered so I hope retail buyers take heed and note the huge price difference before making any imprudent investment decisions.


Genting Wholesale Perp min. denomination SGD 250k
Genting 5.125% 03/2049 callable 12 Sep 2017 97.00/97.55


Genting Retail Perp min. denomination SGD 5k/increments 1k
Genting 5.125% 10/2049 callable 18 Oct 2017 SGX price 102.50 (after stripping off the accrued interest)
Indicative price on banking platforms showing 98.67/ 99.50

rdgs,
Vic

[cbsh38584]

Petra food SGD 5% bond due 2017 has finally announced that they will call back the bond at a premium of 103.

Petra food (LTV 65%) SGD bond bought Apr12 @100.
Petra food buy back @103.

Capital l invested to buy Petra bond $250kX35% (LTV 65%)= $87.5k
Coupon rec'd since Apr12 to Apr13 = $12.534k.
Accrued interest = Apr13 to mid aug13 = $4.178k
Buy back @103 (3%X$250k) = $7.5k
======================================
Total profit (15 mths) = $24.212k 16 mths
======================================

Profit in % = $24.212k/87.5k = 27% for 16 mths.
SGD Borrowing cost 1.06%.

rdgs,
Vic

[phantom_opera]

SGS 15/20y bond yield is already around 3% ... who will want to buy Genting perpetual @ 5.125% (if US outlook is inflationary & rising 10y UST is on the cards) ??

[cbsh38584]

SGS 15/20y bond yield is already around 3% ... who will want to buy Genting perpetual @ 5.125% (if US outlook is inflationary & rising 10y UST is on the cards) ??

28th Jun13 price is 91. Est yield 6.2%. If the yield is >7%. Then maybe there are buyer coming in to buy if they think that Genting will not default.

But I think investment grade straight & short dated bond will be a better choice for bond investors.

rdgs,
Vic