Oh. i see, HF is hong fok.
Vic, i do own some hf shares...whats your take? tks
Oh. i see, HF is hong fok.
Vic, i do own some hf shares...whats your take? tks
Ezion postpones new bond issue. Cheung Kong perp bond below par on the 1st day of trading. Look like market is more cautious now.Originally Posted by Werther
I think better be more cautious. I believe HF is now taking the opportunities to get very cheap money from the retail through bond. If they will to borrow from bank, the interest rate will be very high. No recommendation for this HF bond. Be patience, wait for a big correction & U may get better bond price from capland , capitalmall , Lippomall etc etc.
Dont any how buy high yield bond like Aspial , HF unless U hv insiders info about them & hv confident that the default risk is very low.
rdgs,
Vic
rdgs,
Vic
Originally Posted by cbsh38584
Hi Vic
ok, thanks for your advice. Will stay patience.
Thanks for the heads-up! Hope you can share more of these nuggets, as I don't have a source of such information
Originally Posted by cbsh38584
Originally Posted by starrynight
Eizon eyes 130m from new Perp bond sale. But only manage to get 100m from Retail side. So it was not successful. Another new issue Cheung Kong USD Perp bond was traded below par (now 97) on the 1st day of trading.
Pls be very careful on Perp bond unless it has dropped to a very attractive level to go in. Only for good quality name.
rdgs,
Vic
There are too many new issues recently and more to come.
One word of cautious : be very very very careful before you buy.
I would rather avoid, afterall, it is very difficult to get at IPO for the good quality bonds, so, don't waste time already.
Originally Posted by Laguna
I've been doing this to get hot Bonds at par.
When it is launched, asked your RM how many times it is oversubscribed. Eg, if Ezion needs $100m MTN, the bookbuilding exercise already took in $300m before the end day(usually, it is very fast, within the day, bookbuilding can closed). So it is roughly 3x oversubscribed.
What I will do is bid for for $750k if I only want $250k. Very high chance you will get 1 allotment. However, in the event, you get more than that, you must have the stomach to take it all in or dispose one when you get it.
For your info only. Price on 18th Jan 2013
CCY
Issuer
Cpn
Maturity
Moody's
S&P
Bid
B YTW
Offer
O YTW
ISIN
Min Piece
SGD
OLAM INTERNATIONAL LTD
4.070
2/12/2013
NA
NA
99.75
8.50
100.00
4.00
SG7V20953777
250,000
SGD
OLAM INTERNATIONAL LTD
3.000
2/25/2013
NA
NA
99.75
5.71
100.00
2.96
SG7Z58967497
250,000
SGD
OLAM INTERNATIONAL LTD
2.500
9/6/2013
NA
NA
98.00
5.83
99.00
4.15
SG6W29985234
250,000
SGD
OLAM INTERNATIONAL LTD
6.000
8/10/2018
NA
NA
94.25
7.28
95.75
6.93
SG6Q54973046
250,000
SGD
OLAM INTERNATIONAL LTD
5.800
7/17/2019
NA
NA
92.00
7.37
92.00
7.37
SG6V64983574
250,000
SGD
OLAM INTERNATIONAL LTD
6.000
10/25/2022
NA
NA
91.00
7.30
92.00
7.15
SG6X10986208
250,000
SGD
OLAM INTERNATIONAL LTD
7.000
Perp
NA
NA
88.00
10.69
89.50
10.20
SG6T26979516
250,000
USD
OLAM INTERNATIONAL LTD
5.750
9/20/2017
NA
NA
93.50
7.42
94.50
7.16
XS0831350185
200,000
USD
OLAM INTERNATIONAL LTD
7.500
8/12/2020
NA
NA
93.55
8.68
94.95
8.42
XS0531284080
100,000
USD
OLAM INTERNATIONAL LTD
6.000
10/15/2016
NA
NA
92.25
8.46
94.25
7.80
XS0450423321
100,000
2 new issuances today:
Issuer:
Shinhan Bank
Current Issuer Ratings:
A1 by Moody's / A by S&P / A by Fitch
Expected Issue Ratings:
A1 by Moody's / [A] by S&P
Status:
Fixed rate, senior unsecured
Format:
144A/RegS
Size:
US$500mio max
Tenor:
5.5YR
Product Risk Rating
P2
IPG:
2.17% area; 5-year Treasury + 140bps (Current 5-year ~ 0.77%)
Terms:
SGX listing, 200k/1k denoms, New York law
Joint Bookrunners:
ANZ, BofA Merrill Lynch, BNP Paribas, Deutsche Bank, HSBC, JP Morgan, Mizuho Securities
Timing:
Today's Business
Issuer
Dubai DOF Sukuk Limited
Obligor
Government of Dubai , Department of Finance
Rating
Unrated
Ranking
Senior unsecured
Format
Sukuk Reg S Registered (Ijara Structure)
Amount
US$ benchmark
Tenor
10yr
IPT:
Low 4%
Product Risk Rating
P5
Denoms
US$200,000 x US$1,000
Governing Law
English and Dubai
Listing
Dubai Financial Market
Bookrunners
Dubai Islamic Bank / Emirates NBD / HSBC / NBAD/ Standard Chartered Bank
New issue today:
Issuer:
Tata Communications (Netherlands) B.V.
Guarantor:
Tata Communications Limited
Structure:
Fixed Rate Senior Unsecured Notes
Issue Size:
SGD Benchmark
Issuer/Issue rating:
Unrated
Format:
Regulation S
Tenor:
3 years
Risk Rating:
P4
Coupon:
4.35 – 4.625% area, semi-annual
List/Denoms:
SGD Benchmark
Change of Control:
Change of Control put at 100%, if the Tata Group ceases to (directly or indirectly) control the Guarantor or own at least 26% of the voting securities of the Guarantor OR the Guarantor ceases to (directly or indirectly) control the Issuer and its intermediate holding company, Tata Communications International Pte. Ltd (“TCIPL”) or own at least 51% of the voting securities of the Issuer or TCIPL
Joint Books:
ANZ, DBS Bank Ltd., The Royal Bank of Scotland and Standard Chartered Bank
Denoms:
S$250k x S$250k
Details:
English Law / SGX Listing
Netroadshow Details
http://www.netroadshow.com; Access code: Tata2013 (not case sensitive)
Timing:
Books open now, today's business
Commentary:
Feels like a Hit and Run !
For a company (market cap USD 1.2 bio about 2.5 times less than 2009 market cap) that has not tapped the market since 2009, they chose Singapore to launch their first issue and gave investors less than 4 hours to decide (hearing books closed at noon).
You decide if that is a good or bad thing ? I say its irresponsible and tactics of used car salesmen.
4 REASONS TO BUY
1. Retail customers do not read income statements to realise this company has been running losses since 2010 and has negative free cashflow.
2. Indian government owns 26.1% of the company and used to own 100% before selling part of their stake to Tata Sons in 2008 and it stopped making money since.
3. There is a Change of Control clause for Tata majority ownership meaning that bondholders can put the bonds back on the event Tata group loses control.
4. In this new world order, we are incline to believe that Tata Group is TOO BIG TO FAIL.
My banker asked me what I thought of the bond ? The name or the price ?
My answer is the price.
The Indian government is rated Baa2/BBB- which makes it Aaa/AAA with its local rating agencies. Tata Group is Aaa locally which makes it Baa2/BBB-. Tata Power, another loss making company, is B2/BB- (Moodys/S&P).
Best case scenario for Tata Communications would be somewhere in between Baa2/BBB- and B2/BB- given its government linked status. And investment grades end at BBB-, which makes it non investment grade and in the high yield category.
I cannot accept that the bankers are selling Indian Oil, IDBI and ICICI as comparables to this name ! A change of control clause is NOT A GUARANTEE.
A fair price for this bond would be on the other side of 5%, and I understand there is no leverage available.
Still the books are well oversubscribed and this bond has the NRI (non resident Indian) appeal and we all know banks are paying out bonuses now.
It is sad to see now, a lot of people are not doing any more due diligence.
And a lot believe, bond is safe and good, and it is the way to go.
The market is flooded with liquid, u will feel it when come to bond IPO, it is far hotter than property market.
Today's offerings:
Issuer
Korea Southern Power Co., Ltd. (KOSPO)
Issuer Ratings
A1 Stable (Moody's) / A+ Stable (S&P)
Exp. Issue Ratings
A1 (Moody's) / A+ (S&P)
Structure
Fixed Rate, Senior Unsecured Notes
Format
Regulation S, Registered
Tenor
5Yrs
Expected Issue Size
US$ Benchmark
Risk Rating
P2
Coupon
Fixed, s.a., 30/360 unadj
Price Guidance
2.25% area [CT5 + 140bps area; current CT5 ~ 0.85%]
Details
SGX listing, $200k/1k Denoms, NY law
Joint Bookrunners
Barclays, Citigroup, Deutsche Bank, The Royal Bank of Scotland
Timing
Today’s Business
Issuer
Reliance Industries Limited
Issuer Ratings
Baa2/BBB (stable by Moody's / positive by S&P)
Exp. Issue Ratings
Baa2/BBB (Moody's/S&P)
Type
US$ Senior Perpetual Securities
Status
Senior Unsecured
Format
Rule 144A / Regulation S
Size
US$ Benchmark
Tenor
Perpetual Non-Call 5 years
Risk Rating
P4 – Sophisticated
Coupon
[xxx]% fixed, non-deferrable, (s/a 30/360)
Initial Price Thoughts
6% area
Optional Redemption
[xxx] February 2018 and every distribution payment date thereafter
Coupon Structure
[xxx]% Fixed for life, payable semi-annually in arrears
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
Joint Global Coordinators
BofAML / Citi / HSBC
Joint Bookrunners
BofAML / Citi / HSBC / Barclays / Deutsche Bank / J.P.Morgan / The Royal Bank of Scotland
Timing
This Week’s business
Thanks starrynight!
How come the interest for the first one is so pathetic?
2.25% only?
I just cut my corp bond holding by half, one year total return already far exceeding inflationOriginally Posted by Laguna
Ride at your own risk !!!
Below are the recent SGD bond IPO in Jan 2013. This is just FYI.
Maybank latest Fixed D is 1.6% for 36 mths.
Pricing - 25th Jan2013
==============
Cpn Maturity Bid Offer YTM Issue Size
HDB 1.23% 1/30/2018 100 100.5 1.22% 1.2B
Cpn Maturity Bid Offer YTM Issue Size
Tata com Nethe 4.25% 1/2/2016 100.85 101.1 3.86% 250M
Cpn Maturity Bid Offer YTM Issue Size
Hong Fok Corp Ltd 4.75% 24/1/2018 100 100.35 4.67% 100M
Cpn Maturity Bid Offer YTM Issue Size
Biosensors 4.875% 23/1/2017 101.45 101.85 4.36% 300M
Cpn Maturity Bid Offer YTM Issue Size
Unicredit SPA 5.5% 30/7/2023 99.50 99.95 5.52% 300M
Cpn Maturity Bid Offer YTM Issue Size
ICICB bank 3.65% 14/1/2020 99.70 100.1 3.64% 225M
Cpn Maturity Bid Offer YTM Issue Size
Guthrie gts Ltd 3.7% 23/1/2018 100.3 100.8 3.52% 125M
rdgs,
vic
I suspect cos it's a big stable sound company, so low risk = low yield.
For corp bonds, a lot depends on:
a. value of hard assets owned by the company
b. amount of cash held by the company
c. extent to which its assets have been encumbered, mortgaged, etc.
d. cashflow expectations - guess utilities are seen to be stable.
Originally Posted by buttercarp
Thanks starrynight.Originally Posted by starrynight
I was looking at the SGS T bills.
The interest rate for 6 months is only around 0.22%.
Why would people bother about this when you can get higher interest from eg 1 y FD or just leave it in a normal savings account?
Also when I look at SG bonds, it says
Coupon rate : To be determined based on the cut-off yield of successful
applications
What does that mean?
Another question :
Can the singapore government bonds be sold in the open market?
Last edited by buttercarp; 28-01-13 at 13:44.
Buttercarp,
The experts in the forum are better placed to advise, but I believe the answers are:
a. I don't think individuals will buy SGD bonds now given the yield as you say. The reason for the super low yield is because (i) of the AAA rating which Singapore has and (ii) the yields have been pushed down because of the recent strong interest. In theory, SGS bonds are safer than bank FD, hence the yield discrepancy.
b. On the other hand, some other institutions have to park some of their funds in super safe assets, and SGS bonds are 1 of them.
c. cut-off: the issuer will usually provide an indicative coupon rate, and if the bond is very heavily subscribed, the issuer can lower the coupon rate, since they know that there are takers at the lower yield. Trust that explains.
d. buy / sell: not sure what all the ways are, but you can trade using Fundsupermart - http://www.fundsupermart.com/main/sgs/SGShome.tpl
Hope that helps.
Originally Posted by buttercarp
That means that instituitions will buy them to park their funds safely, and not individual investors.Originally Posted by starrynight
Thanks so much starrynight for taking the time to enlighten me.
I have been so busy lately, and hardly got time for this forum.
Just attended a few presentations on market outlook 2013. Main areas of focus are : Bonds, equity and Forex. Interesting, most banks share the same outlook for markets.
I just have a quick summary on bonds here fyi.
1. Bond performance will not be as great as 2012.
2. The difference between bond yield and Govt TB is very narrow now.
3. The bond yield is now lower that inflation especially for govt bond.
4. Expected return for bond this year is 10%, of which 5% from dividend and 5% from appreciation
5. go for short dated bond of <3 years.
There are still many technical points quite difficult to share here. In short, don't take long dated bond as interest rate hike risk is high.
Overall, year 2013 is a year of equity. Go for high yield equity. Some calling for China and US equity.
I will be doing a major restructuring of my investment in 3Q2013.
Thanks for sharing.
Agree on equities. However, i will bet on china, Sg and Eu instead of USA.
[quote=cbsh38584]Below are the recent SGD bond IPO in Jan 2013. This is just FYI.
Maybank latest Fixed D is 1.6% for 36 mths.
Pricing - 25th Jan2013
==============
Cpn Maturity Bid Offer YTM Issue Size
HDB 1.23% 1/30/2018 100 100.5 1.22% 1.2B
Cpn Maturity Bid Offer YTM Issue Size
Tata com Nethe 4.25% 1/2/2016 100.85 101.1 3.86% 250M
Cpn Maturity Bid Offer YTM Issue Size
Hong Fok Corp Ltd 4.75% 24/1/2018 100 100.35 4.67% 100M
Cpn Maturity Bid Offer YTM Issue Size
Biosensors 4.875% 23/1/2017 101.45 101.85 4.36% 300M
Cpn Maturity Bid Offer YTM Issue Size
Unicredit SPA 5.5% 30/7/2023 99.50 99.95 5.52% 300M
Cpn Maturity Bid Offer YTM Issue Size
ICICB bank 3.65% 14/1/2020 99.70 100.1 3.64% 225M
Cpn Maturity Bid Offer YTM Issue Size
Guthrie gts Ltd 3.7% 23/1/2018 100.3 100.8 3.52% 125M
rdgs,
vic
Tata communication straight bond (3 years) due 1st Feb 2016 yield to maturuty is est 3.7% base on price 101.6 This is more for BUY & HOLD till maturity.
Maybank 36 mths Fixed D is 1.6%. Manulife single premium 25 years projected return 3.86%.
rdgs,
Vic
Is 5y treasury yield back to testing 1.2%?
TreasuryYield5Years (^FVX) -Chicago Options
0.85 0.09(11.45%)
Ride at your own risk !!!
Cut gold
HSBC strategists are cutting their gold allocation by more than half in their strategic portfolio. “With systemic risks receding, we see less reason to have a large weighting in gold which adds a lot of volatility to our portfolio,” the analysts say. In the event of a recession, they now expect gold prices to fall to $1,600 a troy ounce, rather than rising to $2,200 a troy ounce. The upshot, gold is no longer a sound investment in a recession, they say.
More TIPS
HSBC says something has to replace the gold position as an inflation hedge because the analysts still see chances of above-trend inflation increasing, owing to better emerging growth expectations and prolonged central-bank easing. So the strategists are increasing their exposure to Treasury Inflation Protected Securities by 3%.
More stocks
HSBC strategists have lowered the probability of below-trend growth, and increased the probability of above-trend growth. They’re lifting their equity allocation by 8%
Cut bonds
In order to pay for that shift in equities, HSBC has cut its overall credit allocation by 4%. They’ve increased their allocation to high-yield credit so that it now accounts for around 9% of their strategic portfolio. They also cut their investment-grade position by 6% to 2%. By this move they continue to shift away from the middle-ground of the risk spectrum. In the photo, a picture of MGM Resorts , one of the biggest U.S. junk-bond issuers.
Cut portfolio duration
By increasing high-yield allocation and cutting investment-grade allocation, HSBC has reduced its portfolio duration,
Shift to shorter bond
HSBC strategists cut their 10-year Treasury bond allocation by 3% to 7%, but also increased their 5-year allocation by 6% to 16%
=> nothing new
Ride at your own risk !!!
My pleasure
Originally Posted by buttercarp
Laguna, did they express views on when they felt the US interest rates will start going up significantly?
Also, when they refer to long dated bond, what sort of tenure are they talking about - e.g. more than 5 years?
Thanks in advance.
Originally Posted by Laguna
Just for my own records... extract from website:
The Federal Reserve on Wednesday agreed to keep a key short-term rate near zero until the 7.7% unemployment rate is 6.5% or lower.
The short-term rate will also stay unchanged at 0.25%, the Fed said, until the current 2.2% inflation pace hits 2.5%. Tying the one rate it controls to unemployment and inflation targets is unprecedented, economists said.
...
It's unclear what impact the Fed setting targets on unemployment and inflation will have. The Fed's economic forecast out Wednesday put the jobless rate at 6.8% to 7.3% by the end of 2014 and 6.0% to 6.6% by the end of 2015. Based on those projections, Fed Chairman Ben Bernanke said in his press conference that the Fed's new guidance was consistent with its previous plan to keep its key interest rate unchanged until at least mid-2015.
...
Rather than revising the projected date for interest rate increases, investors could automatically adjust their expectations based on the state of the economy. "It acts as an automatic stabilizer," he said.
At the same time, he cautioned that 6.5% unemployment and 2.5% inflation would not automatically trigger a rate increase but would simply set a minimum threshold for when the Fed could consider raising rates. Calling the thresholds a "guidepost," he said policymakers also would consider other economic data as well, such as whether Americans are dropping out of the labor force, before raising rates.
...
The jobless rate, however, has fallen more sharply recently, leading the Fed to slightly revise down its forecast. The Fed expects the rate to drop to 7.4% to 7.7% by the end of next year compared with its September forecast of 7.6% to 7.9%.
i read on the net that when interest rate increase, it is the downfall of the bond..Originally Posted by starrynight
and when it increase gradually year after year.. then your bond is
I took the road less traveled by, and that has made all the difference.” - Robert Frost quotes (American poet, 1874-1963)
That's why the recommendation is to avoid long term bonds - you get whacked both on yield and the capital loss. When interest rates go up, the new bond issuances will have to hike their coupon rates too.
Million dollar question is of course when it will really start going up.
Originally Posted by roly8