BOND THREAD

[phantom_opera]

1 AUD = 1.1629 SGD

obvious Australian garmen wants it to go to 1 to 1

[proxon]

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

I see. I'm a layman so my thinking is that the wholesale price has been pushed down due to lower demand and the minimum trade size. Besides the people doing wholesale must be savvier than the retail group and they probably can generate better yields than 5%. Hopefully, they don't allow the use of wholesale to trade in the open market or else this will make the retail price drop drastically. (I was allocated some IPO shares )
My intent is to hold it all the way to 2017 or beyond depending on the price and interest at that time.
Are there things other than Genting default that I have to consider?
Thanks and I didn't even know there was a wholesale market to begin with!

[Werther]

Just spoke to my banker on the new loan policy, sigh , now even more difficult to borrow $1m, repayment 6.8k, need income of 10k..

Getting more and more difficult to buy, I remember someone said wait...which is what I am doing, been waiting and miss the boat...I am so upset now.

[proxon]

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) ??

Hi Phantom,
I know this is going to sound ignorant but I'm going ahead to ask if I want to learn.

I don't understand why is it not wise to buy Genting at 5% if the SGS is at 3%? Does it mean that because Genting 5% is constant and therefore at some point in time maybe SGS will be the same or higher than 5% and this will make the bond value to go significantly below par? Do you also foresee there is potential for SGS to go beyond 5%? A second reason I'm asking is to see if there are reasons for me to sell my Genting bonds now.
Thanks.

[phantom_opera]

Hi Phantom,
I know this is going to sound ignorant but I'm going ahead to ask if I want to learn.

I don't understand why is it not wise to buy Genting at 5% if the SGS is at 3%? Does it mean that because Genting 5% is constant and therefore at some point in time maybe SGS will be the same or higher than 5% and this will make the bond value to go significantly below par? Do you also foresee there is potential for SGS to go beyond 5%? A second reason I'm asking is to see if there are reasons for me to sell my Genting bonds now.
Thanks.

it really depends on what is your opinion about the spread of Genting perpetual to a risk free benchmark like SGS / UST ... 5% may sound all right today but what if 3y later your friendly Maybank offers u 3% for 1y FD? Also ppl tend to only focus on yield but what is the capital appreciation potential??

http://www.investopedia.com/terms/h/...ond-spread.asp

[proxon]

it really depends on what is your opinion about the spread of Genting perpetual to a risk free benchmark like SGS / UST ... 5% may sound all right today but what if 3y later your friendly Maybank offers u 3% for 1y FD? Also ppl tend to only focus on yield but what is the capital appreciation potential??

http://www.investopedia.com/terms/h/...ond-spread.asp

My intent was to hold it for the 5% till the 1st callable date in 2007 and see what happens. In other words, I am accepting the 5% and accepting risk of Genting default. Even if Maybank offers 3%, I am still better off with the understanding that there is a risk of Genting default. Yes, there is little potential for capital appreciation. In fact, at the moment, there is a risk of it going below par given the big difference in wholesale versus retail pricing. In such a situation, I would have to sit it through. I also think that's why the savvy investor is not interested in Genting bonds because of lack of capital appreciation and if it goes below par, the money becomes not liquid for who knows how long. The other IPO pref shares I have UOB, OCBC are all trending towards par. Not a good sign.

[cbsh38584]

Just FYI

Genting Perp bond it is callable after 10 years on Oct 2022. If it is not call back in Oct 2022, after which the interest will become 6.125%.
Coupon will be paid every April 18 and October 18 of the year.

The worst case scenario is Genting going bankrupt. Holding the perpetuals is still safer than holding the shares as pertpetual holders are paid first from the proceeds of any sale of Genting's assets.

The longer one holds Genting perpetuals, the less risky it becomes as it's accumulated coupons would have reduced the invested outlay by 5.125% every year, and raising by 6.125% in 2022. How much dividends does Genting Shares give?

With the Genting price @91-92. The yield est >6%. If it is not call in 2022. The yield is >7%.


Olam SGD 7% Perp bond price @84. The yield to call >12%. But the risk is much higher.


rdgs,
Vic

[taggy]

Just FYI

Genting Perp bond it is callable after 10 years on Oct 2022. If it is not call back in Oct 2022, after which the interest will become 6.125%.
Coupon will be paid every April 18 and October 18 of the year.

The worst case scenario is Genting going bankrupt. Holding the perpetuals is still safer than holding the shares as pertpetual holders are paid first from the proceeds of any sale of Genting's assets.

The longer one holds Genting perpetuals, the less risky it becomes as it's accumulated coupons would have reduced the invested outlay by 5.125% every year, and raising by 6.125% in 2022. How much dividends does Genting Shares give?

With the Genting price @91-92. The yield est >6%. If it is not call in 2022. The yield is >7%.


Olam SGD 7% Perp bond price @84. The yield to call >12%. But the risk is much higher.


rdgs,
Vic

hi Vic, may i ask how to calculate the yield est >6%...
i had thought is 5.125 / 91 = 5.63% ?

thanks.

[sherlock]

hi Vic, may i ask how to calculate the yield est >6%...
i had thought is 5.125 / 91 = 5.63% ?

thanks.

Since you are buying at 91 and get back at par (100) should they call back in 2022... u add in the difference and the yield is >6%

but perpetuals are scary...

[taggy]

Since you are buying at 91 and get back at par (100) should they call back in 2022... u add in the difference and the yield is >6%

but perpetuals are scary...

ic, thanks Sherlock

[proxon]

Since you are buying at 91 and get back at par (100) should they call back in 2022... u add in the difference and the yield is >6%

but perpetuals are scary...

Could you help elaborate a bit why are they scary?
Am I right to say the only scary thing is if they go bust or else theoretically, at some point in time, it will be at par value?
I'm assuming the perpetuals are more reputable ones like UOB, OCBC, DBS and perhaps Genting.

[phantom_opera]

dun forget genting can choose not to pay and not to redeem

would u lend to a friend anytime he can dun pay interest and no promise to redeem, of course genting has reputation to guard??

interest is accumulated yes

normal bond don't pay interest default straight, this one can suka suka delay

lots of downside limited upside

[sherlock]

Bro Ghost you've said it all

[chiaberry]

dun forget genting can choose not to pay and not to redeem

would u lend to a friend anytime he can dun pay interest and no promise to redeem, of course genting has reputation to guard??

interest is accumulated yes

normal bond don't pay interest default straight, this one can suka suka delay

lots of downside limited upside

Agree on this. If I were a financial adviser, I would not recommend perps to my client.

[proxon]

Just FYI



With the Genting price @91-92. The yield est >6%. If it is not call in 2022. The yield is >7%.


Olam SGD 7% Perp bond price @84. The yield to call >12%. But the risk is much higher.


rdgs,
Vic

Sigh. If only the retail Genting price is at 92. Given the current market conditions, I would buy at 92 for Genting.

Olam, no. I have no idea why they keep buying companies all over the world. How are they going to manage them especially in all those ulu places?

[cbsh38584]

Any investment that offer high return need to be careful. The best avoid.

In Mar11, ,my friend told me he had entered a gold investment in 2010 which pay a very good yield every Q. I told him it cannot be trusted.He did not it seriously.

Two mths later, I got a call from GOLD GAURANTEE representative personal to ask me to attend this gold investment product. To "qualify", U must be S'porean & married & hold credit card . U need to come with your wife. It give a good impression that this investment sound "Safe". It is only for S'porean, not PR or foreign. To entice U further, a $100 capital mall asia voucher will be given after the talk.

So I went ahead to attend myself without my wife which they agreed. But I don't see married couple when I was there. I thought it is a seminar where 10 to 15 people will listen to the expert. It was one to one. The gentleman " saleman" introduce his company profile & his company boss was being appeared in Channelnewsasia. Sound safe. He showed to me that the cashier counters are very busy with people selling/buying gold. There is a a lot of transaction due to it attractive investment product. I suspect it could me that OWN staff acting, doing the buying/selling.

After the explaination how it work, I realise that it don't work at all.. He is selling the gold to me at 1kg=$90k without GST. UOB gold is selling <$80k without GST. They are using my money to pay me quarterly interest. He proposed to me 100g as a start. I propose 10g for a start & will keep the gold. But was rejected. I told him I will call him again in 2 days time to reconfirm it. I was given the $100 voucher & immediately spend on the same day at Bugis with my wife.

1 mth later, I cant believe. Another GOLD guarantee representative call again. This time round, they give $300 voucher. I thought another $300 capital mall asia voucher again. I went ahead to attend & left with $300 voucher from a unknown retail shop which I need to make a appt to go in to buy. I throw it away.

On Oct12, Geneva gold investors claim payments delayed. I called my friend.He told me that when they start to delay payment in Sept12. He already get his lawyer to help to issue 3 letters get the refund back. Finally he got the refund at some lost b4 the Geneva gold collapse.

When Geneva gold news broke out. GOLD guarantee offers to help those who are affected by this fraud investment. This is the highest level tactic of the THICK FACE BLACK HEART employed by GOLD guarantee boss.
Ruthlessness. Months later, gold guarantee boss default & went into hiding with all the money gone. Gold Guarantee, Asia Pacific Bullion and iDiscover - Disovery Group owned by Lee Song Teck.


On Nov12, UBS issued a FCN on the world largest gold mining, Barrick Gold. It deep strike & high yield is very attractive. Spot@US$39+
Barrier 62% of US$39 = $25. (Today price is US$15)
Yield 22%.
12 mths period.


Two big major incident happened in 2012. Geneva gold & Gold Guarantee collapse . Looking at it, these boss must hv insider information way way ahead a BIG GOLD sell down will happen. That is why the boss decide to default & run away with all the money. It is being confirmed by UBS FCN derivative product on the world largest gold mining deep barrier price. Goerge Soro shorting the gold is another signal that gold price may collapse.


What I am try to tell all the investors who want to invest derivative product especially high Beta (high VIX) stock. U need to be very extra careful. The best avoid. High beta stock like mining stock , technology stock , FX etc.
Remember your best friend is your "FEAR" & "loneliness" when come to investment.

rdgs,
Vic

[chestnut]

cbsh38584

on the topic of UL.

AIA guarantees 4% for 7 years. break-even is about 10 years or so....

After 7 years, they have certain projections... If the bonus drops to 2%(it is not guaranteed after 7 years)... your cash value will start to fall....

So do monitor after 7 years.... though unlikely it will fall so low....

Cheers

[cbsh38584]

cbsh38584

on the topic of UL.

AIA guarantees 4% for 7 years. break-even is about 10 years or so....

After 7 years, they have certain projections... If the bonus drops to 2%(it is not guaranteed after 7 years)... your cash value will start to fall....

So do monitor after 7 years.... though unlikely it will fall so low....

Cheers

Thank for your input. I am buying more for family protection. After buying UL sum insured of US$1m which I paid US$261k premium. I felt that I have done something good to my family. I can rest assured that at least they will be taken care of if I am not around. I borrow US$261k against my portfolio @1.05%. Maybe next yr will be >1.05%. The AIA UL will be reviewed yrly by the agent from Charles Monat Associates Pte Ltd.

I have my old policies CI/endowment/hospital plan from AIA/GE/Prudential also. I pay >$20k/yr cash for all my family insurance. CPF 1k/yr. So far I have made a few medical claims amt to >$10k. Myself & eldest son.



rdgs,
Vic

[chestnut]

Thank for your input. I am buying more for family protection. After buying UL sum insured of US$1m which I paid US$261k premium. I felt that I have done something good to my family. I can rest assured that at least they will be taken care of if I am not around. I borrow US$261k against my portfolio @1.05%. Maybe next yr will be >1.05%. The AIA UL will be reviewed yrly by the agent from Charles Monat Associates Pte Ltd.

I have my old policies CI/endowment/hospital plan from AIA/GE/Prudential also. I pay >$20k/yr cash for all my family insurance. CPF 1k/yr. So far I have made a few medical claims amt to >$10k. Myself & eldest son.



rdgs,
Vic

Good for you... Just to let you know, if bonus drop to 2% after year 7, and continues @2%, the cash value may drop to zero at which time, you need to top up or the policy will lapse (i not agent hor - so the terms i used may be wrong). This is an unlikely event, but need to monitor.... I also have UL... Hahahahhaha,

[mcmlxxvi]

Any investment that offer high return need to be careful. The best avoid.

In Mar11, ,my friend told me he had entered a gold investment in 2010 which pay a very good yield every Q. I told him it cannot be trusted.He did not it seriously.

Two mths later, I got a call from GOLD GAURANTEE representative personal to ask me to attend this gold investment product. To "qualify", U must be S'porean & married & hold credit card . U need to come with your wife. It give a good impression that this investment sound "Safe". It is only for S'porean, not PR or foreign. To entice U further, a $100 capital mall asia voucher will be given after the talk.

So I went ahead to attend myself without my wife which they agreed. But I don't see married couple when I was there. I thought it is a seminar where 10 to 15 people will listen to the expert. It was one to one. The gentleman " saleman" introduce his company profile & his company boss was being appeared in Channelnewsasia. Sound safe. He showed to me that the cashier counters are very busy with people selling/buying gold. There is a a lot of transaction due to it attractive investment product. I suspect it could me that OWN staff acting, doing the buying/selling.

After the explaination how it work, I realise that it don't work at all.. He is selling the gold to me at 1kg=$90k without GST. UOB gold is selling <$80k without GST. They are using my money to pay me quarterly interest. He proposed to me 100g as a start. I propose 10g for a start & will keep the gold. But was rejected. I told him I will call him again in 2 days time to reconfirm it. I was given the $100 voucher & immediately spend on the same day at Bugis with my wife.

1 mth later, I cant believe. Another GOLD guarantee representative call again. This time round, they give $300 voucher. I thought another $300 capital mall asia voucher again. I went ahead to attend & left with $300 voucher from a unknown retail shop which I need to make a appt to go in to buy. I throw it away.

On Oct12, Geneva gold investors claim payments delayed. I called my friend.He told me that when they start to delay payment in Sept12. He already get his lawyer to help to issue 3 letters get the refund back. Finally he got the refund at some lost b4 the Geneva gold collapse.

When Geneva gold news broke out. GOLD guarantee offers to help those who are affected by this fraud investment. This is the highest level tactic of the THICK FACE BLACK HEART employed by GOLD guarantee boss.
Ruthlessness. Months later, gold guarantee boss default & went into hiding with all the money gone. Gold Guarantee, Asia Pacific Bullion and iDiscover - Disovery Group owned by Lee Song Teck.


On Nov12, UBS issued a FCN on the world largest gold mining, Barrick Gold. It deep strike & high yield is very attractive. Spot@US$39+
Barrier 62% of US$39 = $25. (Today price is US$15)
Yield 22%.
12 mths period.


Two big major incident happened in 2012. Geneva gold & Gold Guarantee collapse . Looking at it, these boss must hv insider information way way ahead a BIG GOLD sell down will happen. That is why the boss decide to default & run away with all the money. It is being confirmed by UBS FCN derivative product on the world largest gold mining deep barrier price. Goerge Soro shorting the gold is another signal that gold price may collapse.


What I am try to tell all the investors who want to invest derivative product especially high Beta (high VIX) stock. U need to be very extra careful. The best avoid. High beta stock like mining stock , technology stock , FX etc.
Remember your best friend is your "FEAR" & "loneliness" when come to investment.

rdgs,
Vic

Love this sharing. Brings back memori3s of timeshare.

[mcmlxxvi]

Just spoke to my banker on the new loan policy, sigh , now even more difficult to borrow $1m, repayment 6.8k, need income of 10k..

Getting more and more difficult to buy, I remember someone said wait...which is what I am doing, been waiting and miss the boat...I am so upset now.

Wow...so not too strict must b 60% sharp la.

You wont mtb unless theres a project launched now that you been really waiting for long time or the area u want is fully launched and sold.

[cbsh38584]

CS has 70% LTV . SC has zero LTV. Such a big LTV gap . This is a short dated bond. Not familiar with this Indonesia Telco company. FYI only.


TRIKOMSEL
A leading retailer & distributor of mobile phone handsets & mobile services products in Indonesia, with an estimated market share of 30%.

The company is around 78.6% owned by its CEO & President Director Sugiono Wiyono Sugialam and 13.5% by Std Chartered Private Equity.

It is listed on the Jakarta Stock Exchange and has a market
capitalization of close to USD 750 m.

5.25% Trikomsel 2016
ISIN SG55I2992272
Rating N/A
LTV 70%
Indic offer 98.00 (Low @96 to buy on 28th June13)
Indic YTM 6.00

rdgs,
Vic

[chestnut]

Wow...so not too strict must b 60% sharp la.

You wont mtb unless theres a project launched now that you been really waiting for long time or the area u want is fully launched and sold.

My honest opinion here :

The govt in its resolve to clamp price increase will get it done !!!!
Of course if property gain say 3% per year and rental yield is say 3% per annum.... The investor still gets 6% (if fully paid). He cash out 3% and the gain is stuck in the property which cannot be "cashed out".

If the individual is 1/2 leveraged.... a 3% yield will translate to 5.5% assuming interest @ 1% at half the value with loan... So he gets 5.5% + 3%x2(because 1/2 leveraged) = 11.5% per annum.

So in true terms, property is like bonds.... hahahaha

Having done stocks, bonds, properties..... The easier way to "richness" is through properties.... Only issue now is barrier to entry and less capital gains moving forward...

Will prices drop over the next few years????

The answer to that question lies in a few elements and not restricted to the following :

1. the health of the economy moving forward
2. the number of population size (up to now, I still cannot find whats the population todate). How many people were added since June 2012. Hopefully someone can point me to the information.
3. The number of land sales coming on stream which we can co-relate to item2.

US is recovering.... Europe is still down.... China is any bodies guess....

The greener pasture is pointing to US.... Do be careful of the carry trade unwinding....

Cheers

[mcmlxxvi]

all these terms sound like greek to me.

i better stick to property.

[phantom_opera]

Sunday times investment column is getting worse

[mummy]

Sunday times investment column is getting worse

Agree totally....

[Khng8]

At least today no one say want to retire at 40yr old with $10k passive income.

[sherlock]

Sunday times investment column is getting worse

They should interview a few of you guys here instead

[chiaberry]

At least today no one say want to retire at 40yr old with $10k passive income.

I have seen quite a few colleagues retire. Honestly, they look in worse shape after they retired (visibly aged) compared to when still working. I wonder if "retirement" will be a let down when it finally comes. Anyway, there is a shortage of people in my line of work. I think I will work till the official retirement age of 62. Can still take leave to travel/play golf/ski or whatever. 30 days paid leave is enuff for me.

[mummy]

I have seen quite a few colleagues retire. Honestly, they look in worse shape after they retired (visibly aged) compared to when still working. I wonder if "retirement" will be a let down when it finally comes. Anyway, there is a shortage of people in my line of work. I think I will work till the official retirement age of 62. Can still take leave to travel/play golf/ski or whatever. 30 days paid leave is enuff for me.

Don't work too hard, should relax and retire early if possible...