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Thread: BOND THREAD

  1. #241
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    Quote Originally Posted by Allthepies
    muddy mud has its own motive la, muddy mud makes money from short selling la, a very unethical act if u ask me. so whatever muddy mud says it is for its own short selling gain.

    not vested.
    Why short sellers are very unethical?

    U can short commodities, index, call/put, etc etc. In a more perfect market, shorting is a good machanism to balance the risk and at time, protect the long term investors where they take a short position to cover their longs.

    Why the market is only LONG then that is ethical? all short sellers are carrying their fair share of risks.

    If the company is sound, and well supported, then why should they be concerned of short-sellers?

  2. #242
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    Quote Originally Posted by jeaprp
    Little impact even if it is busted, is just a listed company.
    I don't think it is of little impact,

    all the banks with lendings to them, bond holders and shareholders running in billions of dollars, don't forget Tamasek is a major shareholders, and that is our taxpayers' monies.

    On top of their, their suppliers as well.

  3. #243
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    Quote Originally Posted by Laguna
    I don't think it is of little impact,

    all the banks with lendings to them, bond holders and shareholders running in billions of dollars, don't forget Tamasek is a major shareholders, and that is our taxpayers' monies.

    On top of their, their suppliers as well.
    Yup. When Enron went down, Arthur Anderson went down as well.
    树大必有枯枝,人多必有白痴。
    树无皮必死无疑,人不要脸天下无敌!

  4. #244
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    Quote Originally Posted by jeaprp
    The head is wet , might as well take a bath
    Yup.. best of all .. the bathtub , the water, the shampoo, the body foam all provided for BY taxpayers money(oh no..it's not.. it is from Ministry of Finance.. so not accountable to you). You just need to dip in and enjoy the process. This is like most fund managers, take a bet with others money.. You bet and win, you are hero. You bet and lose..oh well..it's not my money. another day of being a hero perharps.

  5. #245
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    Quote Originally Posted by Laguna
    I don't think it is of little impact,

    all the banks with lendings to them, bond holders and shareholders running in billions of dollars, don't forget Tamasek is a major shareholders, and that is our taxpayers' monies.

    On top of their, their suppliers as well.
    Life still goes on, look at the many bad investment , merrill lynch, ABC learning, etc....
    They just need to raise GLS , COE , ERP , CPF. etc

  6. #246
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    Quote Originally Posted by focus
    Yup.. best of all .. the bathtub , the water, the shampoo, the body foam all provided for BY taxpayers money(oh no..it's not.. it is from Ministry of Finance.. so not accountable to you). You just need to dip in and enjoy the process. This is like most fund managers, take a bet with others money.. You bet and win, you are hero. You bet and lose..oh well..it's not my money. another day of being a hero perharps.
    Is like betting horses, hopefully u bet on the right one

  7. #247
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    www.muddywatersresearch.com/wp-content/uploads/2012/11/MW_OLAM_12042012.pdf

    new follow up from muddy.
    very interesting read. you guys check it out.


    olam still refuse to get S & P to do a bond rating check..


    still go 'drag' more people down.. so evil!
    I took the road less traveled by, and that has made all the difference.” - Robert Frost quotes (American poet, 1874-1963)

  8. #248
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    well, Tamasek by full under-writing, makes all the banks as under writers, managers, superb happy, to have the 2% com without any efforts.

  9. #249
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    Quite sad to see how our money is invested these days. Does Olam give such as good return or is it really so strategic to invest in a commodity company to secure our food supply chain? The money can be better invested. No wonder graduates nowadays want to go into finance because big money is so easy to earn.

  10. #250
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    Quote Originally Posted by hyenergix
    Quite sad to see how our money is invested these days. Does Olam give such as good return or is it really so strategic to invest in a commodity company to secure our food supply chain? The money can be better invested. No wonder graduates nowadays want to go into finance because big money is so easy to earn.
    Then what to invest now?
    The yield is so low , with so much liquidity.

  11. #251
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    Quote Originally Posted by jeaprp
    Then what to invest now?
    The yield is so low , with so much liquidity.
    still can find lah!
    just work harder to find....

  12. #252
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    Quote Originally Posted by jeaprp
    Then what to invest now?
    The yield is so low , with so much liquidity.
    patience paid.
    I took the road less traveled by, and that has made all the difference.” - Robert Frost quotes (American poet, 1874-1963)

  13. #253
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    from another forum.




    What raises eyebrows is not the rights issue itself, but that Temasek is going all out to back Olam not just in words but financially as well. I can understand that, as a major shareholder, it is important that Temasek stands by Olam. By direct extension to its owners, the Government of Singapore, Temasek may see a need to protect a Singapore company as well. After all, any fraudulent practices by a local blue chip, if uncovered, will harm Singapore as a financial centre by calling into question its regulatory environment and corporate governance laws. Temasek has taken to fully underwrite this rights issue, meaning it will buy up all unsold rights. Immediately, Muddy Waters has responded by calling this a government bailout.
    I took the road less traveled by, and that has made all the difference.” - Robert Frost quotes (American poet, 1874-1963)

  14. #254
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    Quote Originally Posted by Laguna
    still can find lah!
    just work harder to find....
    Tell that to them, or they can engage u as consultant.

  15. #255
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    can of worms, from here:

    http://newasiarepublic.com/?p=39938

    First, the government of Singapore essentially passed a law requiring it citizens to lend it money. I know of no other country where citizens are by law required to lend its government money.

    Second, the government of Singapore only profits when it earns money in excess of the guaranteed rate of return owed to its citizens. Otherwise, the government and taxpayers are subsidizing investment losses of Temasek and GIC. In recent history, there is little evidence that supports the idea that Singapore is earning a profitable rate of return able to guarantee the debt owed to bodies like the CPF. Net asset growth after accounting for increases in debt have hardly increased implying that Singapore is failing to earn a profitable rate of return that it needs to guarantee CPF holders.

    Third, Singaporean sovereign wealth funds like Temasek and GIC are bearing essentially no risk. Singaporean tax payers bear the risk of GIC/Temasek but do not share the benefits. If GIC and Temasek fare poorly or collapse, the Singaporean tax payer will have to bear the cost of guaranteeing the CPF. However, if GIC and Temasek do a good job the CPF debt holder earns 2.5-4%, then GIC enjoy the entire difference. This is a profoundly perverted structure where the people providing all capital and bear all the risk and enjoy none of the rewards.

  16. #256
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    another can here. read and interpret yourself. no right or wrong.

    http://www.baldingsworld.com/2012/12...and-singapore/

    One question I am frequently asked is whether I think there is the potential for are other financial problems in Singapore Inc. I always respond that given what we already know about the misleading financial reported by Temasek, GIC, and the government of Singapore, it does not stretch credibility to think that companies underneath this umbrella are presenting misleading financial statements.

  17. #257
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    taken from another forum




    By Michelle Yun - Dec 6, 2012

    Olam International Ltd. (OLAM), the commodity trader that Muddy Waters LLC said may fail, slumped to the lowest in three and a half years in Singapore, after Michael Dee, a former senior managing director at Temasek Holdings Pte, called for the company to sell stock.

    Shares in the world’s second-largest rice trader fell as much as 5.9 percent before trading 5 percent lower at S$1.44, set for the lowest close since April 1, 2009, as of 12:15 p.m. local time. Dee said Olam’s Temasek-backed debt and warrant sale announced this week is an expensive way to raise money.

    “Olam made a strategic error in saying equity was not needed until 2015. It needs equity now,’” said Dee, who worked at Temasek from 2008 to 2010, in an article published in Singapore’s Business Times newspaper. Dee joined Temasek after serving as the Southeast Asia chief executive officer for Morgan Stanley.

    Olam, also one of the three largest coffee traders, announced the sale of as much as $1.25 billion of bonds and warrants to existing shareholders this week. The offer will address “lingering doubts,” according to Olam CEO Sunny Verghese, which was sparked by Muddy Waters claim that the company is at risk of collapse.

    “The latest Temasek-backed transaction raises significant issues, as it is extremely expensive debt and equity capital, capital that Olam spent a week telling the market it didn’t need,” said Dee. “Muddy Waters is not the issue here, it is Olam’s strategic and financial decisions that have brought this situation to a head.”

    Bond Offer
    The company will offer $750 million in bonds and as much as $500 million in warrants and Temasek agreed to buy any rights not taken up by other investors, Olam said. Temasek, which holds 16 percent of Olam according to data compiled by Bloomberg, “made its own independent assessment” before deciding to back the sale, it said in a separate statement on Dec. 4.

    “It’s definitely expensive debt to raise,” said Vincent Fernando, an analyst at Religare Capital Markets in Singapore. “It sort of highlighted fears that were raised by Muddy Waters in terms of the company needing capital. A few days before it seems like the company indicated it was not needed. I think this is where it has backfired a bit.”

    Olam has enough capital for the next 12 to 18 months even if it’s unable to raise money from the capital markets, Anantharaman Shekhar, an executive director at Olam, said Nov. 28.

    To contact the reporter on this story: Michelle Yun in Hong Kong at [email protected]

    To contact the editor responsible for this story: Jason Rogers at [email protected]

    http://www.bloomberg.com/news/2012-1...ore-mover.html
    I took the road less traveled by, and that has made all the difference.” - Robert Frost quotes (American poet, 1874-1963)

  18. #258
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    So Olam issues bonds as well as shares.
    Don't know whether it will be a good idea to get their shares at this time.
    What is Muddy waters trying to do?

  19. #259
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    maybe to tell the world what is wrong with olam...
    I took the road less traveled by, and that has made all the difference.” - Robert Frost quotes (American poet, 1874-1963)

  20. #260
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    Olam bonds secondary market gone up to 10-14%, indicating unease by bond investors, got people selling at a loss. Only consolid is Temasek backing but I will not bet on their full backing in the event of full melt down because Olam have almost $10b debt (to confirm) vs $3.xb market value.
    I will avoid both bonds & shares.


    Quote Originally Posted by buttercarp
    So Olam issues bonds as well as shares.
    Don't know whether it will be a good idea to get their shares at this time.
    What is Muddy waters trying to do?

  21. #261
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    Another bad investment by temasek.
    Quote Originally Posted by teddybear
    Olam bonds secondary market gone up to 10-14%, indicating unease by bond investors, got people selling at a loss. Only consolid is Temasek backing but I will not bet on their full backing in the event of full melt down because Olam have almost $10b debt (to confirm) vs $3.xb market value.
    I will avoid both bonds & shares.

  22. #262
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    Teddy, thanks for your advice.

    Was just talking to my banker yesterday if I shd get some olam bond as yield looks very attractive. So I think I better wait and see.

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    Hong Kong Exchange clamps down on accounting practice under fire at Olam



    http://finance.yahoo.com/news/hong-k...052105788.html
    I took the road less traveled by, and that has made all the difference.” - Robert Frost quotes (American poet, 1874-1963)

  24. #264
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    Quote Originally Posted by Laguna
    Good and prudent advice. The other one to look at is the collateral.
    SWIBER was so hot and fully sold out within hours as the yield is very attractive.
    I am comtemplating taking up Swiber from the secondary market. So this is something to avoid? Kindly advise
    When you have eliminate the impossible, whatever remains, however improbable, must be the truth

  25. #265
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    Quote Originally Posted by roly8
    Hong Kong Exchange clamps down on accounting practice under fire at Olam



    http://finance.yahoo.com/news/hong-k...052105788.html
    Own 1 egg can also be considered millionaire, since the egg can produce a hen that can lay many more eggs, and produce even more hens that can produce even more eggs, and so on?

  26. #266
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    Not bad already, at least your own one egg. There are people who key-in into the computer and billion of egg is produce.


  27. #267
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    Quote Originally Posted by sherlock
    I am comtemplating taking up Swiber from the secondary market. So this is something to avoid? Kindly advise
    I am not sure what is the price of Swiber now, but I believe the premium is rather high and thus press the yield now.

    I am not sure your relationship with banks, there will be good bonds, get at IPO time.

    I just know there will be many bond issue in HK in Jan but not sure about in Sg

  28. #268
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    Risk of investing in Bonds
    * Credit Risk * Interest rate risk * Liquidity risk * FX risk

    Credit risk is an investor's risk of loss arising from a borrower who does not make payments as promised

    Moody investment grade rating
    Aaa , Aa1 , Aa2 , Aa3 , A1 , A2 , A3 , Baa1 , Baa2 , Baa3

    Moddy Non-investment grade
    Ba1 Ba2 Na3 B1 B2 B3 Caa1 Caa2 Caa3 D

     
    S&P and Fitch investment grade rating
    AAA AA+ AA AA- A+ A- BBB+ BBB BBB-

    S&P and Fitch Non investment grading Rating
    BB+ BB BB- B+ B B- CCC+ CCC CCC- D

     

    Interest rate risk affects the value of bonds more directly than stocks, and it is a major risk to all bondholders. As interest rates rise, bond prices fall and vice versa. The rationale is that as interest rates increase, the opportunity cost of holding a bond decreases since investors are able to realize greater yields by switching to other investments that reflect the higher interest rate. For example, a 5% bond is worth more if interest rates decrease since the bondholder receives a fixed rate of return relative to the market, which is offering a lower rate of return as a result of the decrease in rates

    Liquidity Risk
    In an Liquid market, investors run the risk of either having to retain the bond till maturity or selling it before maturity at an unfavorable price
    Issue size = liquidity ? (>US$500m more liquid ?)
    Establishing a fair price & price comaprisons can be difficult or impossible as there are sometimes no Counterparties interested in the bond.


     
     
    FX risk
    Morgan Stanley 7.625% Aust dollar bond Due 2016
    Aud/SGD 1.33 (1st Feb12)
    Aud SGD 1.254(1st Jun12)
    Aud/SGD 1.285(12th Dec12)
    If U borrow (due to low rate 1.55%) SGD or USD to convert to Aust to buy Aust bond. There is a FX risk which may go against you


    Bond Types
    Fixed Rate bond (straight bond)
    Fixed maturity & fixed cash flow pattern (I.ecoupon)
    Eg NOL 4.25% due 2017
    Olam 4.07% due Feb 2013


    Callable bond
    Gives the issues the right to buy back all or some of the issues prior to maturity
    Call price : Specified price at which the bond may be repaid
    Eg Hyflux 4.25% 2018. (Callable on 7 Sep15 @ 102.13)


    Perpertual bond (some do come with callable term)

    Bond in which the issuer does not repay the principal. Rather, a perpetual bond pays the bondholder a fixed coupon as long as he/she holds it. Prices for perpetual bonds vary widely according to long-term interest rates. When interest rates rise, perpetual bonds fall and vice versa.

     
     
     
     
     
     
     
    Inflating-linked bond
    Pays a fixed coupon + an amt that is linked to a price index to compensate for inflation
    * S’pore’s central bank is studying the feasibility of selling
    Inflation-linked bonds to help citizens boost on savings amid low interest rate ( Bloomberg 9th Jul 2012)


    Convertible bond
    * Hybrid that combines both equity & debt features
    * Holders have the right to convert the bond into issers’s equity in a predominated ratio during a specified conversion period
    Eg Keppel land 1.875% due 2015 convertible bond
    Conversion price @ $6.72. ( Now trading @3.8)


     
    Bond structure
    Unsecured Bond that is not secured by a collateral.Most bond are unsecured

    Secured Bond.
    Bond is backed by a Collateral
    Eg OUE 3.36% due 2013.
    Back by Mandarin gallery & Mandarine Orchard.

     
     
    Bond seniority
    bondholders are credits & therefore have a higher priority calim than equity holders in a liqudation or restructuring scenario.

    Senior bond has a higher priority claim than other bonds on the assets issued by the same entity.



    Subordinated (junior) bond
    A class of bond that, in the event of liquidation, is prioritized lower than other classes of bonds. For example, a subordinate bond may be an unsecured bond, which has no collateral. Should the issuer be liquidated, all secured bonds and similar debts must be repaid before the subordinated bond is repaid. A subordinate bond carries higher risk, but also pays higher returns than other classes


    I am new in bond investing (started in 2010). I am no expert. Pls get your knowledgable relationship manager to explain to U on fixed income investment.


  29. #269
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    To cbsh38584

    Thanks for the very good write up in bonds, very comprehensive.

    There are some more pointers to share :

    1. cumulative vs non-cumulative : ie if the issuers delay the payment of dividend, in the case of cumulative, the issuers will pay back the arrears (I think with interest) but not the non-cumulative

    2. past dividend track records : dividends on share is ranked after dividend on bonds. The bond investors need to check the past dividend track records and of course, the issuers balance sheet on their cash position, profit and working capital etc

    3. custodian fee charge by the bank

    4. For the OTC market, the premium you are paying.

    BTW, the high yield bonds are doing well
    Last edited by Laguna; 12-12-12 at 09:22.

  30. #270
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    Cool

    Quote Originally Posted by Laguna
    To cbsh38584

    Thanks for the very good write up in bonds, very comprehensive.

    There are some more pointers to share :

    1. cumulative vs non-cumulative : ie if the issuers delay the payment of dividend, in the case of cumulative, the issuers will pay back the arrears (I think with interest) but not the non-cumulative

    2. past dividend track records : dividends on share is ranked after dividend on bonds. The bond investors need to check the past dividend track records and of course, the issuers balance sheet on their cash position, profit and working capital etc

    3. custodian fee charge by the bank

    4. For the OTC market, the premium you are paying.

    BTW, the high yield bonds are doing well
    Credit risk is the

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