Originally Posted by
cbsh38584
My friend bought small issues Lippomall 4.88% SGD bond due July 2015. . He tries twice to sell in the open mkt but hardly any buyer. But I believe if he will to sell at a lower price <100.5, it should able to find a buyer in a normal mkt condition. In a crisis condition, it can get as low as 80 due to it illiquid mkt condition. Worst of all, totally no buyer at all & hopefully the companies will survive the crisis till the bond maturity. In between , U may have many sleepless night worrying whether it will default.
I came to know that a experience fixed income expert . He does not go for Swiber , Ezra , Oxley , Amtek , Tong Aik , Lippomall, Chinese developers name , junk bond , very illiquid small issues bond size etc. He prefers SG blue chip , some good European & US name , investment grade , very liquid big issues bond size where the LTV is between 70% to 85%. He wants to sleep well at night. He enhances his return by leveraging to the max.
So we need to be very careful. Do not be complacent. Right now, due to the property cooling measures. Many Rich Property speculators start to move to bond mkt.
Last week , the new issues China citic bank US$300 perp bond was oversubscribed by almost 20 times. Final books more than US$5.7 billions. I tried US$400k hoping of selling within week/mth but no allocation at all. Price now 101-102.