Junior
there were quite a lot of fundamental and TA involved. Matching the rate of QE and stimulus in the last few years and the rate of inflation and unemployment, debt to GDP etc, and the Japan's economy.Originally Posted by starrynight
The hike in rates is highly unlikely within these two years.
None prefers long dated bond now, only short dated corporate bonds of less than 3 years.
Junior
Hi, any view on a possible currency war and the effects? Or currency war had already begun.
Newbie
Actually the currency war has already started to some extent. Many developing / recovering countries will want low currency to stimulate investment and exports. And problem is that when a few countries start, others feel compelled to do so as well.
For example, if the RMB strengthens, then it makes for a clear(er) case to shift production plants to Vietnam, Bangladesh, etc.
Newbie
Thanks Laguna!
Newbie
Interesting article:
Happy days are back. We should thank Mr "Whatever It Takes" Draghi and Bernanke that everything has become Too Big To Fail. And even Cyprus will get a bailout because it is systemic.
Trillion dollar deficits are sustainable for now – unfortunately http://on.ft.com/XP3f9i France is 'totally bankrupt', jobs minister admits as concerns grow over Hollande's tax-and-spend policies So why not a Rolls Royce over a Daihatsu ?
Because it has become Farcical ! That is the latest catch phrase Pimco's Bill Gross used on Goldman Sachs' Abby Cohen at the Barron's Roundtable event and less recently, on US political parties during the elections last year.
Everyone knows its not real.
Now that central bankers have tied the fates of their countries to the fate of Greece and Cyprus and all the systemic banks and companies which has made Tata Communications a Miracle Story or a Global Laughing Stock in Singapore. In clear demonstration of ignorance and gullibility perhaps, the bond is now trading at 101.50 3.715% when it was issued at 4.25%, much lower than originally indicated coupon of 4.875% which was way way under the fair value for a coupon which some pegged at 6%. Reliance Perpetual, issued yesterday, is now heavy underwater at 97.50 re-offered.
Interest rates are higher now but I chanced upon the biggest scam job yesterday.
Banks are aggressively marketing investment grade papers on leverage. The returns certainly make Tata look like pittance.
I will not publish the table to reveal the bank but will give some illustrations of what I see.
* Maybank Perpetual (callable 08/2018) is given 59% LOAN !! and will yield a leveraged Yield to Call of 8.32% for the next 5 years.
* Capital Malls Treasury 08/2022 will be given a loan of 74% and will yield 11.7% to 2022.
* SingPost Perp (call 03/2022) laon 57% and yield 7.29%.
This is insane too. Because every single bond on that list is marked up 2-3 cts higher than the actual price but still look good as a leveraged return. It is like selling D'Leedon at SGD1,600 psf when it is only 1,200.
Reasons why you should not be buying Investment Grade on Leverage right now.
* Yields are going up and when yields go up, investment grade papers are first to react and not the High Yields.
* The yield you see assumes that funding rates will be constant at current levels. I expect the bank to fund you on a monthly roll basis to achieve that rosy yield number that you see.
* When you leverage to the extent they recommend, there is a high chance of margin calls.
Let's look at global yields since the start of 2013.
10Y YIELDS UNITED STATES 1.97 +27 CANADA 1.96 +19 BRAZIL 2.76 +28 COLOMBIA 2.95 +9 MEXICO 2.47 -5.6 POLAND 3.71 +20.9 UNITED KINGDOM 2.09 +26.3 FRANCE 2.27 +28.7 GERMANY 1.68 +37.4 ITALY 4.22 -26.7 SPAIN 5.24 +4.7 BELGIUM 2.46 +42.4 PORTUGAL 6.08 -67 SWEDEN 1.88 +37.4 NETHERLANDS 1.84 +35.3 SWITZERLAND 0.73 +24.1 GREECE 9.94 -151.1 JAPAN 0.76 -2.5 AUSTRALIA 3.50 +18 NEW ZEALAND 3.64 +12 SOUTH KOREA 3.05 -11 INDONESIA 5.14 +2.4 THAILAND 3.68 +19.5 CHINA 3.57 +1.5 INDIA 7.84 -26.6 SOUTH AFRICA 6.93 +17.9 SINGAPORE 1.38 +7.2 Rates are going up and I have not come across a single profession recommendation that yields will crash to last year's historic unprecedented lows again.
Granted its a FARCE and we are all throwing in our lot with the rest of the world and their economic fates. Because by doing "WHATEVER IT TAKES", he is throwing in the weights of Germany, France, and the lot to make sure there is only 1 outcome that we have to accept is the Right and Good one.
If anyone pulls the plug and calls the bluff, the entire facade will come tumbling down like a house of cards. China loves it because if Germany collapses, China will have a field day buying up BMW ! They are going along and milking the world now.
Now lets look at the list of high yields and how they have performed.
{table to be uploaded}
I find my beliefs are eroding and I do not think I am alone. Good luck with those cars.
Newbie
Looks like the bond bull run may have finally started to die... the below perp was finally priced at 5.875%, and accordingly to a website, the price is now 95.5 / 96.5
Newbie
Looks like the bond bull run may have finally started to die... the below perp was finally priced at 5.875%, and accordingly to a website, the price is now 95.5 / 96.5
Hi starry
How does this work? It is priced now below $100? So holder either sell at a loss or old till maturity, is it? Tks
Junior
Looks like the bond bull run may have finally started to die... the below perp was finally priced at 5.875%, and accordingly to a website, the price is now 95.5 / 96.5
Thank for your info.
Can U let me know the website to go to see the bond pricing ?
======================================================
From what I observe, Property developer , infra-structure related companies PERP bond & long dated bond has dropped 3-5%.
Cheung Kong Infra-structure 6.625% Perp bond was trading @1.01 two weeks ago. It has dropped to 0.97. Agile property developer Perp Bond 8.25% recent IPO ( Nov12) price now is 0.95. etc etc
Keppel Corp bond (IPO in 2012) 4% due 2042. Price to buy is now 98. etc etc.
Non Property & infra structure PERP BOND
===========================
The recent IPO (Oct12) GazpromBank (Russian) Perp Bond 7.8%, the price remain above 100. Price now is 1.04.
Genting PERP BOND 5.125% ,the price to buy is 99.50. Did not drop alot.
ABN bank SGD 4.7% straight Bond price is 101.5. The ABN USD 6% straight bond price is 1.05. Both are recent straight bond issued in 2012.
It seem that Property developer & infra-structure Perp bond dropped more than the other sector straight & high yield perp bond. I maybe wrong in my observation. SG Banks stock may likely to benefit from any increase in interest rate. Property investors may likely to pay slight higher mortgage rate in the near future.
If good quality name like the Cheung Kong USD Perp bond will to drop from 97 to 91(52 wks lot <90). Can look into it to buy.
rdgs,
Vic
Junior
ya, the bond prices dropped quite a bit world wide in the last 4 days
Junior
With the latest cooling measured, some of the potential property investors are staying sideline.
Some of them decided to switch to short dated Straight bond , NOT PERP BOND. They also buy dividend stock like Singtel as well as Reit counter stock.
I have also used my CPF $90k in Dec12 to buy dividend stocks. Hold little cash.
So far, my bond holdings ($3.65m) are all in the money except OLAM USD straight bond. My coupon for 2013 est 210k Nett. Hopefully to reduce my bond holding by 2015 & start to look into any good Property to buy again.
rdgs,
Vic
Newbie
Hi Vic
I am also one of those who can't get into the property now, in your opinion, any recommendation what to buy to get some dividends while waiting... I am kind of risk averse tho. Thanks.
Music of the night
10y UST hit 2% today ...10y SGS bond yield jumped to 1.48% (Was 1.36% on 23 Jan)
52 week range for 10y UST is 1.39 - 2.40
Actually I am really really surprised why Genting perpetual bond prices are so high, lots of perpetual bonds sinking underwater:
http://online.wsj.com/article/SB1000...991562634.html
Ride at your own risk !!!
Newbie
Vic this one. http://tradehaven.me/
Junior
I am sorry I cant recommend dividend stock as I am not qualifiy. Pls get your advisor. I can only provide your some info as highlighted below.There are many website with many info about dividend stock.
The best for you to do your homework what to buy 1st & patiently wait for the stock mkt to correct. It will come. Patience=PROFIT.
http://dividendsrichwarrior.blogspot...reits.html?m=0
rdgs,
Vic
Junior
SG government tgt population is 6.9m by 2030. The 1st thing in our mind is property investment. But the too CMs make it not attractive to buy a 2nd property now. The next thing in my mind is that the telcom stock as well as healthcare stock should hv more potential to grow to cater for the 6.9m population. It is a long term investment. Just be patience to wait mkt to correct. You will be reward for your patience.
rdgs,
Vic
Newbie
Hi Vic
No worries.
Good nite.
Newbie
Dear all,
I stumbled across this forum some nights ago. As a Relationship Manager with one of the local banks for the Priority Platform, I hope to be able to share more here with regards to the markets in general and other asset classes in greater detail. Feel free to ask any question but I must reserve the right to not answer some of the potentially more sensitive ones.
Thank you.
Senior
What do a Relationship Manager do for the bank?
Junior
Thank for your info.
Fed keeps printing money. Money does really grow on the trees. Fed is pointing a gun on everybody head to take risk.
Need to be very careful when FED decides to put the trigger to withdraw the liquidity fast & furious.
rdgs,
Vic
Newbie
Werther,
Exactly - the holder will take a hit now if he sells. And multiplied for those on leverage.
Article on the same bond FYI:
It is 94/95.50 this morning so I thought I would write about it.
We, in Singapore, like to believe that bonds cannot go wrong especially for bonds like Reliance Industries, a good proxy for the Indian government and same rating too.
Who bought Reliance Industries USD 5.875% Senior Perpetual NC5y ?
Looks like it could be speculators
Books at ~3bn with 170 orders
Asia: 53%
Europe: 27%
US: 20%
PBs: 53%
Institutional: 47%
ISSUER: Reliance Industries Limited
ISSUER RATINGS: Baa2/BBB (stable by Moody's / positive by S&P)
EXP. ISSUE RATINGS: Baa2/BBB (Moody's/S&P)
TYPE: US$ Senior Perpetual Securities
STATUS: Senior Unsecured
FORMAT: Rule 144A / Regulation S
SIZE: US$ Benchmark
TENOR: Perpetual Non-Call 5 years
COUPON: 5.875% fixed, non-deferrable, (s/a 30/360)
ISSUE SIZE USD 800 MIO
OPTIONAL REDEMPTION: 5 February 2018 and every distribution payment date thereafter
COUPON STRUCTURE: 5.875%Fixed for life, payable semi-annually in arrear
COUPON DEFERRAL: Not deferrable
EARLY REDEMPTION RIGHTS: At par, in case of Tax Event
DETAILS: US$200K/1K denoms; SGX Listing; New York law
USE OF PROCEEDS: For ongoing capex in the infrastructure sector in compliance with RBI and India regulations
It looks like MAS is not going to go to the rescue for this one even though its SGX listed. I wonder if SGX bothers to check on deal feasibility or not these days.
Main Cons
Fixed for Life so even if rates go UP, there is no recourse for PERPETUITY.
Non Deferrable coupon so the company can opt to pay without going into default.
Pros
Senior structure which reverts to senior debt status when in default, second only to secured debt holders.
Well, it is not hitting the margin calls yet. We could still buy the shares as a hedge because the company would be making a cool USD 40 mio profit if they bought the bonds back at 95.00 now.
I would say I am tempted to buy some but I will not because I believe if rallies only last until something gives and margin calls get triggered for the slate to be wiped clean. And do not be surprised or be babies about it because you are only 1 vote for the central bank and certainly not too big to fail. Just look at the 30Y Singapore Government Bond now ? It is 99.80 after opening this year at 107 and its AAA too !
Newbie
Thanks for the insights!
I was quoting the articles from this website: http://tradehaven.me/It's a few guys posting in the website, but the main guy appears to work in the bonds industry.
I have problems getting "live" prices too. No Bloomberg where I work, and my banker seems to have difficulty getting his treasury guys to offer quotes quickly... probably the banks need to calculate how much "cream" they want to skim off in each offer price
Newbie
Thanks Derek
I'll start the ball rolling:
a. why do the banks need so long to come back to me with price quotes for bonds?
b. how long will the price quote from the bank be valid for usually? 1 hour for example? Does the bank need to re-confirm the order, i.e. can they reject my buy order based on the price they have quoted me?
c. how much on average does the bank make off each bond trade? I see a sizeable gap between the price the bank offers me and the price quoted on Bloomberg quite a lot of the time.
Newbie
Launched today:
ISSUER:
Hainan Airlines ( Hong Kong ) Co., Limited
SBLC PROVIDER:
Bank of China Limited, Hainan Branch
KEEPWELL DEED PROVIDER:
Hainan Airlines Co., Ltd (600221.SH)
EXP. ISSUE RATINGS:
A1 / A (Moody's / S&P)
TYPE:
Senior Credit Enhanced Bonds
ISSUE SIZE:
US$ BENCHMARK (500mm MAX)
TENOR:
7 years
Initial Guidance:
T7 + 250bps area (CT7 ~ 1.375%)
FORMAT:
Reg S, Registered
USE OF PROCEEDS:
Purchase of aircraft and aircraft equipment and the Issuer’s working capital and general corporate purposes
TERMS:
SGX-ST listing, English Law, US$200k/1k denoms
JOINT GLOBAL COORDINATORS:
BOC International, Deutsche Bank, J.P. Morgan
JOINT BOOKRUNNERS:
BOC International, Deutsche Bank (B&D), HKISL, ICBC International, J.P. Morgan
TIMING:
AS EARLY AS TODAY'S BUSINESS
RISK RATING:
2
Junior
Hi starry and probably those heavy into bonds like cb and laguna.Thanks for the insights!
I was quoting the articles from this website: http://tradehaven.me/It's a few guys posting in the website, but the main guy appears to work in the bonds industry.
I have problems getting "live" prices too. No Bloomberg where I work, and my banker seems to have difficulty getting his treasury guys to offer quotes quickly... probably the banks need to calculate how much "cream" they want to skim off in each offer price
You can try Thomson Reuters Eikon platform for retail traders.
It's monthly fee is definitely cheaper than a bloomberg terminal but the level of details is not there as compared to bloomberg.
However, I've found it to be sufficient for my own use in terms of equities and bonds (yyes, you can get the current prices and also info of the bonds and valuation and convexity etc).
But if you are into SG equities only, I recommend Shareinvestor. It's well worth your subscriptino fee for that one as welll.
screen shot of a bond and a country overview screens
Newbie
Focus, thanks for this! Mind sharing how much you are paying for the monthly subscription?
Music of the night
> 5y USD bond is subject to huge currency exchange risk beware
Ride at your own risk !!!
Newbie
[QUOTE=starrynight]Werther,
Exactly - the holder will take a hit now if he sells. And multiplied for those on leverage.
Article on the same bond FYI:
It is 94/95.50 this morning so I thought I would write about it.
We, in Singapore, like to believe that bonds cannot go wrong especially for bonds like Reliance Industries, a good proxy for the Indian government and same rating too.
Who bought Reliance Industries USD 5.875% Senior Perpetual NC5y ?
Looks like it could be speculators
Books at ~3bn with 170 orders
Asia: 53%
Europe: 27%
US: 20%
PBs: 53%
Institutional: 47%
ISSUER: Reliance Industries Limited
ISSUER RATINGS: Baa2/BBB (stable by Moody's / positive by S&P)
EXP. ISSUE RATINGS: Baa2/BBB (Moody's/S&P)
TYPE: US$ Senior Perpetual Securities
STATUS: Senior Unsecured
FORMAT: Rule 144A / Regulation S
SIZE: US$ Benchmark
TENOR: Perpetual Non-Call 5 years
COUPON: 5.875% fixed, non-deferrable, (s/a 30/360)
ISSUE SIZE USD 800 MIO
OPTIONAL REDEMPTION: 5 February 2018 and every distribution payment date thereafter
COUPON STRUCTURE: 5.875%Fixed for life, payable semi-annually in arrear
COUPON DEFERRAL: Not deferrable
EARLY REDEMPTION RIGHTS: At par, in case of Tax Event
DETAILS: US$200K/1K denoms; SGX Listing; New York law
USE OF PROCEEDS: For ongoing capex in the infrastructure sector in compliance with RBI and India regulations
It looks like MAS is not going to go to the rescue for this one even though its SGX listed. I wonder if SGX bothers to check on deal feasibility or not these days.
Main Cons
Fixed for Life so even if rates go UP, there is no recourse for PERPETUITY.
Non Deferrable coupon so the company can opt to pay without going into default.
Pros
Senior structure which reverts to senior debt status when in default, second only to secured debt holders.
Well, it is not hitting the margin calls yet. We could still buy the shares as a hedge because the company would be making a cool USD 40 mio profit if they bought the bonds back at 95.00 now.
I would say I am tempted to buy some but I will not because I believe if rallies only last until something gives and margin calls get triggered for the slate to be wiped clean. And do not be surprised or be babies about it because you are only 1 vote for the central bank and certainly not too big to fail. Just look at the 30Y Singapore Government Bond now ? It is 99.80 after opening this year at 107 and its AAA too 
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