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Thread: BOND THREAD

  1. #151
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    Quote Originally Posted by Secretariat
    Perpetual also means that perpetually not being redeemed leh.
    Not sure, I guess perpetual to bond holders only, issuer can always return your money right Imagine Genting tomorrow say it is folding and want to return your principal ... would u say no?

    It all depends on the inflation outlook and growth prospects of Singapore ... if you expect in next 15-20y

    1. High inflation high growth - suicide to buy Genting
    2. High inflation low growth - still can buy some
    3. Low inflation low growth - ok lah
    4. Zero inflation zero growth - mai tu liao
    Ride at your own risk !!!

  2. #152
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    Quote Originally Posted by phantom_opera
    Got, Genting perpetual ...but 5.125% only and redeemable after 10y by issuer ... if not redeemed then increase to 6.125% (which is pretty close to 7% no guarantee of payment)
    Hi bro, what do you mean by "no guarantee of payment"?

    TIA.

  3. #153
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    Quote Originally Posted by buttercarp
    Hi bro, what do you mean by "no guarantee of payment"?

    TIA.
    I must admit that I have not looked at the IPO prospectus ... from what I understand, if they don't pay dividend for shareholders they can also have the option to not paying the bond holders any interest .. however interest is cumulative i.e. they must pay later (but how long later is the key risk here)

    As long as they say dun pay ... market price will crash like 15-20% ...your money is stuck perpetually

    CPF is different, though also kind of perpetual, they must pay ...the pathetic 2.5% for OA or 10ySGS +1% for SA

    so I guess you can use your SRS money to buy some perpetual bond if you expect inflation to stay low with low growth in next 15y

    You can checkin anytime you want, but you can never leave - Hotel California
    Ride at your own risk !!!

  4. #154
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    For bonds, if you don't read the prospectus or if you read the prospectus and don't understand the contents, DON'T BUY as you don't know what you're getting into.

    FYI even the bankers selling you the bonds sometimes have not understood the prospectus fully and can may not advise you properly on the terms and conditions.

    If you lend people money, you will make sure that you are clear on the terms and conditions, right?

    We are not talking about small money here, min investment of SGD250K is a lot of money to most people (maybe not to forum members here, but it is not to be taken lightly).

    Don't look at the yield and be dazzled by it.....there is a lot of fine print to be considered.

  5. #155
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    Quote Originally Posted by phantom_opera
    Not sure, I guess perpetual to bond holders only, issuer can always return your money right Imagine Genting tomorrow say it is folding and want to return your principal ... would u say no?

    It all depends on the inflation outlook and growth prospects of Singapore ... if you expect in next 15-20y

    1. High inflation high growth - suicide to buy Genting
    2. High inflation low growth - still can buy some
    3. Low inflation low growth - ok lah
    4. Zero inflation zero growth - mai tu liao
    hi phantom,

    perp bond is not capital protected...

  6. #156
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    Very good explanation.

    Actually, property applies as well. Just that for Singapore, the govt dictates that the monies going to the progress payment is held under a certain body (cannot recall where). So in the event the developer goes bust, another contractor can be called in to complete the project and use the funds held by the body. So when buying properties in Singapore, it is safe.
    If anyone has another view, by all means share. I have spoken with my lawyer on this subject matter and was advised by him of this case. This ruling was put in place by the govt after an incident whereby 1 developer went bust.

    So in your pursuit of any investment, dont just simply trust say the property agent, the banker, the insurer, etc... There are certain clause they dont tell you. You need to do your due diligence.

    Say for example : Insurance max payout in event of insurance coy go kaput is 50K (please correct me if I am wrong). So it is wise to spread the eggs out.
    For banks, Only during Lehman Bro time, fixed deposit was full coverage in the event of bank failure (because HK implemented it and there was a fear of capital flight). Now deposits get something like 50K (again, I cannot remember the amount-so someone correct me if I am wrong). So it is better to spread out your deposits across numerous banks. Unless of course you have 100Million, then it is tough, hahaha. But if I had that kind of money, I will still spread.


    Quote Originally Posted by Secretariat
    When you go to a bank, say to buy a property, you know your risk better than the banker. The banker works simply on a model, the risk level of such and such borrower, his income, age, other liability etc.

    When you buy a bond, you are the banker, so think like a banker and make sure you understand the risk of the borrower.

    The bond's interest rate is a reflection of the risk of the borrower (bond issuer), because the market thinks that it is riskier to lend money to NOL than CapMall, and demands a higher interest rate.

    But the market can be wrong, as it did during subprime crisis. The rating agency can be wrong as well, so the comment from Phantom, junk bond being marketed as AAA.

    Will you lend to a sinking company?

  7. #157
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    Quote Originally Posted by Lovelle
    hi phantom,

    perp bond is not capital protected...
    sure ... even your FD in the bank is not capital protected beyond certain amount

    and bond holders normally are better off than share holders
    Ride at your own risk !!!

  8. #158
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    Everytime a company organizes a Cash Call, by rights issue, bond issue, monetization of its asset such as building etc etc, better sit up and find out what it is up to.

  9. #159
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    Quote Originally Posted by Secretariat
    Nice one.

    Any sign of life at Baltic Dry?
    http://www.dryships.com/pages/report.asp

    Nowadays, cannot use BDI to correlate to stocks? Bloody confusing. But BDI do show signs of upwards from Sept onwards after QE.

  10. #160
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    in HK, Oz and many other countries, their gov has come out with inflation linked bond. Singapore was questioned why it has not come out with this bond.

    Lawrence Wong is looking into this. Better hold ur horse and wait for this thing...other tools seems to be risky..

  11. #161
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  12. #162
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    Quote Originally Posted by chestnut
    Traders had a good laugh when it bounced off 666.

  13. #163
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    Which bond? James Bond
    Ride at your own risk !!!

  14. #164
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    Quote Originally Posted by phantom_opera
    Which bond? James Bond
    No no no. Not this one.
    It's the other bond whereby you need to exchange rings and give half of your wealth when split.

  15. #165
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    Quote Originally Posted by PN
    No no no. Not this one.
    It's the other bond whereby you need to exchange rings and give half of your wealth when split.
    or Japs Bond

    TOKYO - The Bank of Japan on Tuesday launched US$138 billion in further monetary easing as it looks to boost the country's slowing economy, following similar moves by US and European central bankers.
    The BoJ said it would expand an asset-purchase programme - its main policy tool - by 11 trillion yen (US$138 billion) to 91 trillion yen, while keeping rates unchanged at zero to 0.1 per cent. - AFP
    Ride at your own risk !!!

  16. #166
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    NOL Bond
    I will not pick up this Bond for the following reasons:

    1. the issuer has not been doing well over the last few years. And I think it will not be doing that well in the coming few years, with the increased in crude and slow down in business world wide.

    2. the issue sold their building and from now on have to pay rent. So, they either pay higher rent next time or move. The cost of moving is also very high.

    3. the yield is not that great.

    4. currency risk

    I have a friend, a firm believer of NOL, collected so many NOL shares from $4+ to $3+ and still holding till today.

  17. #167
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    Quote Originally Posted by phantom_opera
    or Japs Bond

    TOKYO - The Bank of Japan on Tuesday launched US$138 billion in further monetary easing as it looks to boost the country's slowing economy, following similar moves by US and European central bankers.
    The BoJ said it would expand an asset-purchase programme - its main policy tool - by 11 trillion yen (US$138 billion) to 91 trillion yen, while keeping rates unchanged at zero to 0.1 per cent. - AFP
    If you a fan of QE (I know that Phantom is one), but you may still lost count.

    This is QE9 for Japan, and at the same time the country earns the distinction of having the highest percentage of sovereign debts over GDP.

    Banzai.

  18. #168
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    Quote Originally Posted by Secretariat
    If you a fan of QE (I know that Phantom is one), but you may still lost count.

    This is QE9 for Japan, and at the same time the country earns the distinction of having the highest percentage of sovereign debts over GDP.

    Banzai.
    ya, with non-stop QE, the interest rate will stay forever low....

  19. #169
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    Quote Originally Posted by Secretariat
    Traders had a good laugh when it bounced off 666.
    When Barack Obama was campaigning for the US Presidency, there was a conspiracy (< note this) theory circulating that he was Antichrist.

    So during the financial meltdown, the Standard&Poor Index plunged but bounced off 666, and set off the chorus "OMG, this is unbelievable...". And recently when BDI also bounced off 666, traders were "Hey, what is going on here?".

    Another side of the conspiracy (< note this) was questioning the fact how can the Anichrist be a Black? But they probably are not aware that some historians have been questioning why Christ is a White, while all the paintings left behind by ancient Egyptians only shown Blacks.

  20. #170
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    SINGAPORE, Oct 30 (Reuters) - Singapore is likely to see another year of lacklustre economic growth and elevated inflation in 2013 as exports remain weak and rising rents and car prices continue to push up the cost of living, its central bank said on Tuesday.
    But the job market will remain tight and "resident wage growth could rise from 2-3 percent in 2012 to above 3 percent in 2013 even if overall economic growth remains sluggish," the Monetary Authority of Singapore (MAS) said in its half-yearly macroeconomic review.
    Ride at your own risk !!!

  21. #171
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    Quote Originally Posted by chestnut
    Very good explanation.

    Actually, property applies as well. Just that for Singapore, the govt dictates that the monies going to the progress payment is held under a certain body (cannot recall where). So in the event the developer goes bust, another contractor can be called in to complete the project and use the funds held by the body. So when buying properties in Singapore, it is safe.
    If anyone has another view, by all means share. I have spoken with my lawyer on this subject matter and was advised by him of this case. This ruling was put in place by the govt after an incident whereby 1 developer went bust.

    So in your pursuit of any investment, dont just simply trust say the property agent, the banker, the insurer, etc... There are certain clause they dont tell you. You need to do your due diligence.

    Say for example : Insurance max payout in event of insurance coy go kaput is 50K (please correct me if I am wrong). So it is wise to spread the eggs out.
    For banks, Only during Lehman Bro time, fixed deposit was full coverage in the event of bank failure (because HK implemented it and there was a fear of capital flight). Now deposits get something like 50K (again, I cannot remember the amount-so someone correct me if I am wrong). So it is better to spread out your deposits across numerous banks. Unless of course you have 100Million, then it is tough, hahaha. But if I had that kind of money, I will still spread.
    Think u are right about the 50K coverage. Its in the fine print.

  22. #172
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    Quote Originally Posted by Laguna
    NOL Bond
    I will not pick up this Bond for the following reasons:

    1. the issuer has not been doing well over the last few years. And I think it will not be doing that well in the coming few years, with the increased in crude and slow down in business world wide.

    2. the issue sold their building and from now on have to pay rent. So, they either pay higher rent next time or move. The cost of moving is also very high.

    3. the yield is not that great.

    4. currency risk

    I have a friend, a firm believer of NOL, collected so many NOL shares from $4+ to $3+ and still holding till today.

    Would buying capitalmall bond at 3.8% from the open market be a safer bet compared to NOL then?

  23. #173
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    Quote Originally Posted by ekl2ekl2
    Would buying capitalmall bond at 3.8% from the open market be a safer bet compared to NOL then?
    CMA bond is callable at 5th year onwards ... if not redeemed coupon rate is 4.5%
    Ride at your own risk !!!

  24. #174
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    Quote Originally Posted by Laguna
    ya, with non-stop QE, the interest rate will stay forever low....
    No issue with low interest rate, the lower the better.

    More concern with policy risk, the what CMs are being planned. CMs just hinder the normal functioning of a free market.

    Google "Florida Land Bubble of 1920s", the intervention of Federal Reserve, which historians now said was the prelude to 1929 Crash. Also Ben Bernanke's thoughts on it.

  25. #175
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    Quote Originally Posted by Secretariat
    No issue with low interest rate, the lower the better.

    More concern with policy risk, the what CMs are being planned. CMs just hinder the normal functioning of a free market.

    Google "Florida Land Bubble of 1920s", the intervention of Federal Reserve, which historians now said was the prelude to 1929 Crash. Also Ben Bernanke's thoughts on it.
    I tot 1929 was the selling of stocks whereby now they install circuit breaker. Bro, you hamtam or real one. I read 1929 until like crazy right after Lehman leh. Is it a conspiracy theory or real one ???? Hahahaha

  26. #176
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    Quote Originally Posted by chestnut
    I tot 1929 was the selling of stocks whereby now they install circuit breaker. Bro, you hamtam or real one. I read 1929 until like crazy right after Lehman leh. Is it a conspiracy theory or real one ???? Hahahaha
    Real history.

    I always qualify the conspiracy one.

  27. #177
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    Quote Originally Posted by Secretariat
    Real history.

    I always qualify the conspiracy one.
    Oh, my theory was stocks crashed and everyone wanted out. Then came people queuing at banks which cause banks to run out of money which caused another scare and it became spiral effect.

    Point me to your theory. I need to read leh.

    http://en.wikipedia.org/wiki/Great_Depression

  28. #178
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    Quote Originally Posted by chestnut
    Oh, my theory was stocks crashed and everyone wanted out. Then came people queuing at banks which cause banks to run out of money which caused another scare and it became spiral effect.

    Point me to your theory. I need to read leh.

    http://en.wikipedia.org/wiki/Great_Depression
    Yes, but these were the results. But what caused the stocks to crash?

    My point to Laguna is, at this stage, the risk is with policy maker (MAS) coming out with ridiculous CMs.

    I read Bernanke's speech many years ago, on the Federal Reserves actions that contributed to, first the pop in the Florida Land Bubble, and second, Wall Street crash. Both were caused by a series of tightenings which aimed specifically bring down the bubble and stock rally.

    The 1987 crash was also caused by Greenspan specific action in raising the interest rate, the famous "irrational exuberance" comments.

    Of course, Bernanke didn't talk about 1987, Greenspan is still alive, but I can remember when he said in this speech.."lest anyone of you still doubt the capability of Federal Reserves in bring down a market." Something like that.

    (I will post the link of Bernanke's speech when I find it. Otherwise, you can search here http://www.federalreserve.gov/newsev...2008speech.htm)

  29. #179
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    And if you really, really, want to get close to the 1929 crash, then you have to read about Jesse Livermore.

  30. #180
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    Chestnut,

    Here is what Bernanke said:

    "The market crash of October 1929 showed, if anyone doubted it, that a concerted effort by the Fed can bring down stock prices."

    http://www.federalreserve.gov/boardd...22/default.htm

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