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Thread: BOND THREAD

  1. #2611
    Join Date
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    1,081

    Default Re: BOND THREAD

    Over the last 9 years ( started 2010 ) , I hv built up a bond portfolio that comprise investment-grade bonds (20%) and high yield junk bond (80%) with leveraging.It generates annual income of ave $180k after deducting borrowing cost of 0.9% to 1.5% (from 2011 to 2017) . My bond portfolio was as high > $4 million (with leveraging) during good times (borrowing cost 0.9% to 1.5%) .But in 2018, my annual income around $110k as I take less risk (less junk bond) & less leverage. Zero leverage for 2019 as I want more peaceful night . So far I have traded in/out more than 100 corporate bond (2010 to 2019). Buy during IPO (@100) & sell at profit above par within 0.5 to 1.5 yrs. I only hold a few bond till maturity.


    Despite being hit by bond default, I still manage to do reasonable well. Now I am more cautious as another default will make my bond investment underperforming. If I will to go out to buy millions of stock with high leveraging like in 2006/07. I will be very very emotional unstable & chances of losing money is high. So I switch to bond trading.


    1) Low borrowing cost (0.9% to 1.5% from 2010 to 2016)
    2) Less volatile so emotionally it will affect me less.
    3) Capital gain is fast due to US QE (2010 to 2016). Buy at IPO 100 & sell at 103 to 1.10 plus accrue interest in 1-2 yrs.
    4) Corporate Bond has a higher LTV than stock.


    I do have sleepless night buying junk bond like China Evergrande /Olam which was attacked by buddy water. Luckily, I ride through the crisis. During the oil crisis (2015) which I bought India Vedanta US$400k. It dropped as low as 70. I regretted buying huge amt US$400k just into one counter. I was very stressful. I asked my brother in law's friend (former fund mgr) about this India oil company.He said unlikely this company will default. I ride through it & get called . As for bond default, many many sleepless night. But month later, I learnt to accept it & move on.


    I have survived the 1997 Asia financial crisis & Lehman 2008/09 Crisis. I was lucky as I was saved by Mahathir (97) & Dr Tony Tan (Mar08). I may not be 3rd time lucky like in 1997 & 2008 given advance warning from Dr Tony Tan. Many great Guru said that the crisis bigger than Lehman is coming. From 2012 till the recent 2019. It look like it is going to come . A big drop in dow jones in early 2019. But it recover fast & furious. It seem that the biggest fat Wolf never comes at all. Right now, Many investors maybe are complacent now. Record bond issuing since 2018/19 especially from China. 10% ,12% 15% etc. Damn worrying. Even our LTA , HDB , PUB , KEPcorp , SIA etc issue more bond.


    Warren Buffett is noticing a unique phenomenon right now in the global economy: negative interest rates and low inflation. So something different is happening, but something different happens all the time,” he said.


    Right now, I am reducing my risk for my family sake as I really do not know when the biggest fat wolf is coming. My income for bond is only 70k to 80k for 2019 from high of 280k in 2012/2013. I may want to look for alternative in 2020 as may want to keep more cash on hand. I am lucky that I started contribute to max the CPF annual limit early(now 37.7k per year). Tgt to hit high $1.5m at age 65 *(hello Pension Goodbye Tension) . Still a long way.

    By other investment
    =============
    Property - Make very good $

    Private equity fund(from 2006 to 2019) - Make good $. Profit est $300k.Nearly lose $ as I want to sell in 2009.It does not allow me sell at NAV. Sell at zero to them. Force to keep.

    Unit trust - Make some $ as did not invest in big amount and also did not hold for long term (10 to 15 yrs ) like a private equity fund.

    FX - Waste of time .Make some $ despite do hundred of times trade. Opportunities comes,then do. Recent trade sell SGD buy Aud @0.948. Premium only $550 ( 1mth).

    Stock - Trade in/out a few hundred time (maybe a thousand time). A totally waste of time & money. Lose money but not a lot. Just buy bank stock & hold should be the right strategy. Timing is important.

  2. #2612
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    Default Re: BOND THREAD

    Quote Originally Posted by cbsh38584 View Post
    I have survived the 1997 Asia financial crisis & Lehman 2008/09 Crisis. I was lucky as I was saved by Mahathir (97) & Dr Tony Tan (Mar08). I may not be 3rd time lucky like in 1997 & 2008 given advance warning from Dr Tony Tan. Many great Guru said that the crisis bigger than Lehman is coming. From 2012 till the recent 2019. It look like it is going to come . A big drop in dow jones in early 2019. But it recover fast & furious. It seem that the biggest fat Wolf never comes at all. Right now, Many investors maybe are complacent now. Record bond issuing since 2018/19 especially from China. 10% ,12% 15% etc. Damn worrying. Even our LTA , HDB , PUB , KEPcorp , SIA etc issue more bond.
    1997 AFC - IMF, World Bank tell the yellow people they need to sell their asset, privatize their national company.

    2008 GFC - Ben tell the whole World don't worry print money and buy all the rubbish and keep in the Bank. When the World cannot print as fast as the US they borrow from someone who can print more. Singapore already learns the art of money printing and one of the art is Bond. I print a piece of paper call Bond and people use another piece of paper called Money.

  3. #2613
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    Default Re: BOND THREAD

    I am almost 90% on fixed income without leveraging now. USED to leverage during 2010 to 2018. Let hope some of my bond will not go into default. Got 3 bonds (OUE , NOL , China ) due this year (Apr , Sep & Dec20). But when US announced QE5 (1.5 Trillion), there is some hope . Going to buy some retail bond like capitalmall 3.08% due 2021 (1.005) & others.

    Update on FX Mar 2020. The worst currency performance against SGD . England , Australia & NZ as it CRASHED against SGD in the last 1yr
    1 USD =S$1.43 (2010)
    1 USD =S$1.33 (2015)
    1 USD = S1.428 (2017)
    1 USD = S$1.385 (Aug 2019)
    1 USD = S$1.415 (Mar 2020)


    1 Canada = S$1.35 (2010)
    1 Canada = S$1.08 (2015)
    1 Canada = S$1.07 (2017)
    1 Canada = S$1.04 (2019)
    1 Canada = S$1.025 (2020)


    1 SGD =Ringgit 2.28 (2010)
    1 SGD =Ringgit 2.70(2015)
    1 SGD =Ringgit 3.12(2017)
    1 SGD =Ringgit 3.00 (2019)
    1 SGD =Ringgit 3.02 (2020)


    CHF =S$1.21 (May 2010)
    1 CHF =S$1.445 (May 2015)
    1 CHF = S1.425 (May 2017)
    1 CHF = S$1.34 (May 2019)
    1 CHF = S$1.49 (Mar 2020)
    Those who are very familiar with Swiss Franc FX movement against SGD. They will know that by borrowing Swiss [email protected]% (high networth investor even lower @0.2%) & convert to SGD dollars during CRISIS time (which is now 1 chf = S$1.49). Use the SGD $ to partial pay down for his property loan. Some even buy investment grade bond which yield is 2-3% (swiss franc borrowing cost 0.75%).


    1 SGD =Yen 66 (2010)
    1 SGD =Yen 88 (2015)
    1 SGD =Yen 80 (2017)
    1 SGD =Yen 76.8 (2019)
    1 SGD =Yen 76.3 (2020)


    1 EURO = S$2.00 (2010)
    1 EURO= S$1.55 (2015)
    1 EURO= S$1.53 (2017)
    1 EURO= S$1.54 (2019)
    1 EURO= S$1.57 (2020)
    * I did change some Euro$ in 2012 at 1.47.


    1 GBP = S$3.80 (in the 80s)
    1 GBP = S$3.02 (2007)
    1 GBP = S$2.25 (2010)
    1 GBP =S$2.03 (2015)
    1 GBP =S$1.77 (2017)
    1 GBP =S$1.68 (2019)
    1 GBP =S$1.737 (2020)
    About 20 yrs ago, it was 1Gbp=S$3.00. Drop almost 40%.


    1 AUS=S$0.93 (Lehman crisis 2009)
    1 AUS=S$1.25 (2010)
    1 AUS =S$1.34 (Jan 2012)
    1 AUS=S$1.08 (2015)
    1 AUS=S$1.075 (2017)
    1 AUS=S$0.940 (2019)
    1 AUS=S$0.875 (2020) or 1sg = A$1.14
    Today Aus Xrate against SGD (0.875) is historical low.
    Thinking of convert SGD to AUS to buy Aussie investment grade bond (yield 2-3%). Then hold for 3-5 yrs hoping Aus will slow strengthen & move from 0.875 to parity (1:1).


    1 NZD =S$0.96 (2010)
    1 NZD =S$1.04 (2014)
    1 NZD =S$0.98 (2017)
    1 NZD =S$0.89 (2019)
    1 NZD =S$0.857(2020) or 1sg=Nz$1.166


    1 SGD=Kr won 600 (2007)
    1 SGD=Kr won 790 (2010)
    1 SGD=Kr won 813 (2015)
    1 SGD=Kr won 824 (2017)
    1 SGD=Kr won 875 (2019)
    1 SGD=Kr won 855 (2020)

  4. #2614
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    Default Re: BOND THREAD

    Thanks for sharing.

  5. #2615
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    Default Re: BOND THREAD

    Thanks CBSH for sharing. Good to hear from you again. I have 1 bond which is maybe a bit iffy, but reasonably confident about the others.

    Toying with the idea of buying the super-long-dated Temasek bonds, for the capital gain if SG int rates really drop significantly.

  6. #2616
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    Default Re: BOND THREAD

    Yes, thanks Vic for his view.

    Wrote something this morning for sharing with friends

    Markets need sudden and powerful triggers to have a good reset.
    Major equity markets are now in bear market. Yield is at all time low. VIX is all time high.

    Known triggers (so many at one time is real killer and rare opportunity if you are at the right side and know what to do)
    Covid-19 and the inability to contain and control the outbreak
    Major disruption to supply and demand chains
    Oil Price war
    Failure of coordinated efforts and effective tools by central banks

    Triggers on the Way
    More and more border controls and lock down of countries
    Corporate bankruptcies, unemployment and recession
    Collapse of the high yield junk bond and credit market
    Prolong Covid-19


    I am very concerned now is the credit market / junk bond space. The credit market spreads have widen more. And with oil prices coming off further will impact the credit in the energy space more. Where this space makes of approximately 30% of the high yield space. Of cos thus will then lead to higher default rates.
    Last edited by Laguna; 17-03-20 at 17:20.

  7. #2617
    Join Date
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    4,035

    Default Re: BOND THREAD

    Yes, thanks Vic. With age and more experience, I really start to appreciate and understand what he is saying.

    Quote Originally Posted by Laguna View Post
    Yes, thanks Vic for his view.

    Wrote something this morning for sharing with friends

    Markets need sudden and powerful triggers to have a good reset.
    Major equity markets are now in bear market. Yield is at all time low. VIX is all time high.

    Known triggers (so many at one time is real killer and rare opportunity if you are at the right side and know what to do)
    Covid-19 and the inability to contain and control the outbreak
    Major disruption to supply and demand chains
    Oil Price war
    Failure of coordinated efforts and effective tools by central banks

    Triggers on the Way
    More and more border controls and lock down of countries
    Corporate bankruptcies, unemployment and recession
    Collapse of the high yield junk bond and credit market
    Prolong Covid-19


    I am very concerned now is the credit market / junk bond space. The credit market spreads have widen more. And with oil prices coming off further will impact the credit in the energy space more. Where this space makes of approximately 30% of the high yield space. Of cos thus will then lead to higher default rates.
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

  8. #2618
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    Mar 2008
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    706

    Default Re: BOND THREAD

    Just realised the SGD A-1 tranche of Astrea IV and V are both under water! PE investments must have taken a big haircut.

    Thank goodness I sold my retail lots for Astrea IV about 6 months ago. Didn't get allocated any Astrea V at the ATM.

  9. #2619
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    Default Re: BOND THREAD

    人无千日好,花无百日红
    All good things come to an end
    There is no person that has 1000 good days in a row, and no flower that stays red for 100 days.

    Always be frugal, even in times of prosperity. To assume that one’s job security , prosperity and fortunes will last is a foolish way to live. It is during the good times that we should prepare ourselves for leaner times.

    That is why some of the Bond coupon that I rec'd is channelled to my wife (OA, SA & MA), sons (CPF SA) & myself (OA,SA & MA) . I will not reinvest to grow my pie. All insurance companies do lock their profit so that they are able to maintain a stable return for the policies holders.

    I am looking to buy capitallmall trust retail bond 3.08% due Feb21. It was 1.03 weeks ago . Now it is 0.993. It is not that liquid. Volume is too low to be about the buy >100k. Maybe 20k to 50k.

  10. #2620
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    Default Re: BOND THREAD

    Thank you for sharing, only in time of crisis you see who is real and who is fake.

    The Doom day lover will be quite during Doom day because tomorrow is another Doom day.

    The MTB will still MTB because they are too afraid the boat will sink.

    KPKB will be in force when everything becomes expensive again.

    Life goes on no matter who you are.
    The Best Time to buy Property is Yesterday.
    If you lose Money it because you sell on a wrong Day.

    https://wa.me/6587821025

    https://r057844h.propnex.net/

    You don't Buy others will Buy.
    You don't Sell, others will Sell.

  11. #2621
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    1,081

    Default Re: BOND THREAD

    Quote Originally Posted by cbsh38584 View Post
    I am almost 90% on fixed income without leveraging now. USED to leverage during 2010 to 2018. Let hope some of my bond will not go into default. Got 3 bonds (OUE , NOL , China ) due this year (Apr , Sep & Dec20). But when US announced QE5 (1.5 Trillion), there is some hope . Going to buy some retail bond like capitalmall 3.08% due 2021 (1.005) & others.

    Update on FX Mar 2020. The worst currency performance against SGD . England , Australia & NZ as it CRASHED against SGD in the last 1yr
    1 USD =S$1.43 (2010)
    1 USD =S$1.33 (2015)
    1 USD = S1.428 (2017)
    1 USD = S$1.385 (Aug 2019)
    1 USD = S$1.415 (Mar 2020)


    1 Canada = S$1.35 (2010)
    1 Canada = S$1.08 (2015)
    1 Canada = S$1.07 (2017)
    1 Canada = S$1.04 (2019)
    1 Canada = S$1.025 (2020)


    1 SGD =Ringgit 2.28 (2010)
    1 SGD =Ringgit 2.70(2015)
    1 SGD =Ringgit 3.12(2017)
    1 SGD =Ringgit 3.00 (2019)
    1 SGD =Ringgit 3.02 (2020)


    CHF =S$1.21 (May 2010)
    1 CHF =S$1.445 (May 2015)
    1 CHF = S1.425 (May 2017)
    1 CHF = S$1.34 (May 2019)
    1 CHF = S$1.49 (Mar 2020)
    Those who are very familiar with Swiss Franc FX movement against SGD. They will know that by borrowing Swiss [email protected]% (high networth investor even lower @0.2%) & convert to SGD dollars during CRISIS time (which is now 1 chf = S$1.49). Use the SGD $ to partial pay down for his property loan. Some even buy investment grade bond which yield is 2-3% (swiss franc borrowing cost 0.75%).


    1 SGD =Yen 66 (2010)
    1 SGD =Yen 88 (2015)
    1 SGD =Yen 80 (2017)
    1 SGD =Yen 76.8 (2019)
    1 SGD =Yen 76.3 (2020)


    1 EURO = S$2.00 (2010)
    1 EURO= S$1.55 (2015)
    1 EURO= S$1.53 (2017)
    1 EURO= S$1.54 (2019)
    1 EURO= S$1.57 (2020)
    * I did change some Euro$ in 2012 at 1.47.


    1 GBP = S$3.80 (in the 80s)
    1 GBP = S$3.02 (2007)
    1 GBP = S$2.25 (2010)
    1 GBP =S$2.03 (2015)
    1 GBP =S$1.77 (2017)
    1 GBP =S$1.68 (2019)
    1 GBP =S$1.737 (2020)
    About 20 yrs ago, it was 1Gbp=S$3.00. Drop almost 40%.


    1 AUS=S$0.93 (Lehman crisis 2009)
    1 AUS=S$1.25 (2010)
    1 AUS =S$1.34 (Jan 2012)
    1 AUS=S$1.08 (2015)
    1 AUS=S$1.075 (2017)
    1 AUS=S$0.940 (2019)
    1 AUS=S$0.875 (2020) or 1sg = A$1.14
    Today Aus Xrate against SGD (0.875) is historical low.
    Thinking of convert SGD to AUS to buy Aussie investment grade bond (yield 2-3%). Then hold for 3-5 yrs hoping Aus will slow strengthen & move from 0.875 to parity (1:1).


    1 NZD =S$0.96 (2010)
    1 NZD =S$1.04 (2014)
    1 NZD =S$0.98 (2017)
    1 NZD =S$0.89 (2019)
    1 NZD =S$0.857(2020) or 1sg=Nz$1.166


    1 SGD=Kr won 600 (2007)
    1 SGD=Kr won 790 (2010)
    1 SGD=Kr won 813 (2015)
    1 SGD=Kr won 824 (2017)
    1 SGD=Kr won 875 (2019)
    1 SGD=Kr won 855 (2020)
    Really cant believe. Aud/Sgd five days ago was historical [email protected]. Today it went down even further to 1Aud=0.82. Prepare to convert SGD to Aud @around 0.82 & buy Apple corporate bond at PREMIUM , 102 (screen show 1.06 pricing) . Apple 3.375% due 2024. Hopefully it is matured in 2024. Aud/Sgd will go to parity. 1:1.

    Pound against Sgd is also historical low. 1Gbp=S1.66.

  12. #2622
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    Aug 2009
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    3,943

    Default Re: BOND THREAD

    As I mentioned earlier, my deepest concern now is the credit market which is currently under crunch and squeeze.

    Now, all banks are lowering their lending value (LTV, say from 70% to 40% on the current market price) quite substantially. Bond market is having offer without bids.
    Hedge funds deep trouble. Still lots of selling / forced selling

    I was told that one major bank has pull out all lending on AT1 bonds / Financial cocos

    Hopefully selling can be cleared by mid next week

  13. #2623
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    Default Re: BOND THREAD

    Thanks Laguna - would be great if you could update on any rumors, etc. once in a while as I don't have the news that you do.

  14. #2624
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    1,081

    Default Re: BOND THREAD

    If the Covid19 crisis will to lead to serious credit crisis & China US don't talk to each other. It will be a mother of all crisis. .
    Majorities of Investment grade bond will eventually also default. Nobody will know whether it will lead to serious credit crisis.
    Let pray & hope it will not happen


    I remember that my RM recommend me some bond that correlate to Pandemic outbreak 6 to 7 years ago. They say it is safe. But never
    invest. Today, investors in World Bank’s ‘pandemic bonds’ face big losses due to the coronavirus outbreak. I suspect the issuers who
    issues this pandemic bond already prepare & plan years ahead that it will happen.

    FYI, China said that COVID-19 may have been brought into China by US soldiers. Japan media also said that the Covid19 virus is from US. Both of them have no real proof

  15. #2625
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    Default Re: BOND THREAD

    Feels like trading volume is finally dying down... the liquidations are ending for the current phase?

  16. #2626
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    Default Re: BOND THREAD

    To certain extent, the market has "stabilised" with all the big moves by The Central banks.
    There are still many unresolved issues :
    1. How the various government supporting the falling companies like airlines, O&G, hotels etc etc etc
    2. Covid-19 is still not under control
    3. Credit market risk is still very very high.
    4. Recession and Unemployment

    Now, the market I would like to say is wait and see stage....

    I also wait and see.....but IMHO, there could be another final leg down or the market will drift down slowly for all the negative earnings in 1Q and 2Q

  17. #2627
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    Default Re: BOND THREAD

    "Thick face" (shamelessness) , "black heart" (ruthlessness)
    -------------------------------------------------------------------------------
    Having a thick face means concealment, hiding your thoughts and your bad intent from your victim.


    Having a black heart means having the determination and ruthlessness needed to make decisions to get the job done, even if others suffer as a result. You are not worried about criticism from others and you are willing to focus on your goal and ignore the costs of achieving your goal.


    I believe that all investors know that there are some form of stock manipulation in the stock market. But many are unaware that the biggest manipulation of the stock market is from the US (world currency reserve). Let it call it "biggest drug cartel". very low profile, very dangerous & little know manipulators, hedge fund, Banks, financial media etc. They are the most black hearted organisation. They have done it during 1997, Asia financial crisis and 2008 US financial crisis which eventually the FED bailed out the RICH & powerful at the expense of the ordinary citizen. Their goal is to make as much hundred billions from victim ordinary investors . Our years & years of saving just varnished within months. They don't have to fight a actual war . Just KEYBOARD without shedding blood.


    They engaged "a drug peddler or pusher" all over the world to get investor to leverage all kind of products.While the drug peddler & push distribute the products, The organisation will continue to manipulate the mkt & push it high and higher. Giving a false hope & luring more potential Asian investors to leverage more. It was biggest & longest bull run in US history. Apple, Amazon , Microsoft & Google a TRILLION companies.
    I remember in 2014, I was introduced by my banker "worldbank Pandemic bond". She says it is very safe as the likely hood of a pandemic happening is very low. The return is considered low at that time. So I did not buy. Today, pandemic bond suffered heavy losses due to covid19.


    Japan & Chinese media said that the Covid 19 virus is from US base on scientific analysis. But US is saying it is from China. It will be a problem if US/China don't cooperate to resolve it. world bank Pandemic bond & Covid 19 virus. So coincidence.


    The trade deal required China to open up the financial sector. China has been resilient in opening the sector too fast. It eventually bite the bullet and open up . They know the US will eventually plan a similar type of Asia (1997) or US (2009) financial crisis in China. So they have the intention to create a "Aircraft carrier BIG bank" to be able to prepare for the day to come (10-20 yrs later ?).


    I believe all this crashed was already planned way way ahead. I have stopped leverage since end of 2018. I have never experience a pandemic crisis before & mkt 30% crashed within 5 weeks & all of retail shop, airline, restaurant, shopping mall almost at standstill. I am just ok as compare to 2009 US financial crisis which I was heavily leveraging.
    “The True Story of the Bilderberg Group” and What They May Be Planning Now. A very secretive & dangerous Bilderberg Group. I remember I have read an article how to reduce over crowded population. Create another Spanish flu which will kills millions and millions of the world population.


    Investing is no more as simple as in the 70s to early 2000s. With easily avail FB , Whatapp, Youtube, Google, smartphone etc. It is even more easily to manipulate our mind. For young working adult. Your 1st priority is always retirement plan come 1st. Contribute mthly $100 -200 in your CPF SA. Buy a term insurance and invest the rest (put into CPF SA). Invest only during crisis time as the valuation is low. Lock some profit just like all insurance companies & move some to CPF.

  18. #2628
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    Default Re: BOND THREAD

    I remember in 2014, I was introduced by my banker "worldbank Pandemic bond". She says it is very safe as the likely hood of a pandemic happening is very low. The return is considered low at that time. So I did not buy. Today, pandemic bond suffered heavy losses due to covid19.


    In 2014, my friend bought me to see his banker for opinion. I was shocked that she is willing to leverage up by 500k to buy US income fund. She made $ in ppty. The returned is >8%+ ( leveraging) after deducting the interest . Yearly 30k+ income. I told her it is a firm no. Anyway , she went ahead. I thought my opinion was wrong as the US mkt is in the bull run from 2014 to 2019. I hope her banker is able to advise her to sell b4 the actual crash in Mar20.Easily 25% to 30% down.

  19. #2629
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    Default Re: BOND THREAD

    https://www.cnbc.com/2020/03/23/fed-...ZvRwPJH-A7zeEs

    “We are now in QE infinity, again,”

    The Federal Reserve just pledged asset purchases with no limit to support markets

    PUBLISHED MON, MAR 23 2020 7:59 AM EDT
    The Best Time to buy Property is Yesterday.
    If you lose Money it because you sell on a wrong Day.

    https://wa.me/6587821025

    https://r057844h.propnex.net/

    You don't Buy others will Buy.
    You don't Sell, others will Sell.

  20. #2630
    Join Date
    Mar 2008
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    706

    Default Re: BOND THREAD

    Just asked my RM (local bank) what the borrowing rates to finance bonds are - now around 1.9% versus 1.5% last week. I'm sure SIBOR has remained about the same level?

  21. #2631
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    Default Re: BOND THREAD

    The top Five "black hearted" hedge fund heads made more than $1.5billions EACH EACH in 2019 at the expense of millions millions of the ordinary investors. I always tell my friends never never park money at HEDGE FUND. They are very evil

    Pimco income bond fund (SGD) was recommended by CS in 2014. Dividend yield around 4% (not guarantee) . LTV 70%. I did not buy as I prefer to buy individual corp bond. It was always around $10. My friend bought this fund with leveraging thinking it is a safe investment grade bond fund. With 100k cash on hand. He borrowed another 240k . Total 340k. He rec'd only $600/mth dividend after deducting the borrowing cost. Just 1 mth+ ago, it suddenly it drop from $10 to $8+. He got to top up a few time due to margin call. His NAV 340k has dropped to $240k (drop 100k) just within weeks. If he will to sell all units. He will get back only 40k cash. I total him to sell either 50% or 70% or all units. The best is to sell all units which it is a very difficult decision for him. Too painful to cut at huge loss. I told him many many times to put more in CPF but he was confident that he can beat CPF 2.5% return. Will he learn ? I don't think so.

    In 2017, I want to reprice my HDB loan with the banker. When everything is settle. He recommended me a Eastspring income fund. Dividend around 4%+. Again I am not interested. Days later, I came back to sign the document. While waiting, I saw the banker talking to an old uncle to invest in Eastspring income fund instead of FD. I hope he did not invest. Price was 94 in 2017. Now it was 0.8.

    I came to know about this fund when I unintentionally open by eldest brother (62) letter 4 yrs ago. He did invest into Eastspring income fund base his bank statement. In early 2018, I told him to sell all & move to CPF life as the interest 4% is guarantee by the govt. He cannot afford take risk as he is in the retirement mode. 4% guarantee by govt is so much better than non guarantee 4% return by eastspring income fund with potential fund dropping also . Luckily, he took my advise to sell away in 2018 & move to CPF life.

    JPM morgan Global income fund , fidelity income fund. All drop >15% within weeks. My friends also got hit. Luckily no leveraging. Just 15% to 20% loss within weeks.

  22. #2632
    Join Date
    Jan 2011
    Posts
    1,081

    Default Re: BOND THREAD

    Quote Originally Posted by cbsh38584 View Post
    The top Five "black hearted" hedge fund heads made more than $1.5billions EACH EACH in 2019 at the expense of millions millions of the ordinary investors. I always tell my friends never never park money at HEDGE FUND. They are very evil

    Pimco income bond fund (SGD) was recommended by CS in 2014. Dividend yield around 4% (not guarantee) . LTV 70%. I did not buy as I prefer to buy individual corp bond. It was always around $10. My friend bought this fund with leveraging thinking it is a safe investment grade bond fund. With 100k cash on hand. He borrowed another 240k . Total 340k. He rec'd only $600/mth dividend after deducting the borrowing cost. Just 1 mth+ ago, it suddenly it drop from $10 to $8+. He got to top up a few time due to margin call. His NAV 340k has dropped to $240k (drop 100k) just within weeks. If he will to sell all units. He will get back only 40k cash. I total him to sell either 50% or 70% or all units. The best is to sell all units which it is a very difficult decision for him. Too painful to cut at huge loss. I told him many many times to put more in CPF but he was confident that he can beat CPF 2.5% return. Will he learn ? I don't think so.

    In 2017, I want to reprice my HDB loan with the banker. When everything is settle. He recommended me a Eastspring income fund. Dividend around 4%+. Again I am not interested. Days later, I came back to sign the document. While waiting, I saw the banker talking to an old uncle to invest in Eastspring income fund instead of FD. I hope he did not invest. Price was 94 in 2017. Now it was 0.8.

    I came to know about this fund when I unintentionally open by eldest brother (62) letter 4 yrs ago. He did invest into Eastspring income fund base his bank statement. In early 2018, I told him to sell all & move to CPF life as the interest 4% is guarantee by the govt. He cannot afford take risk as he is in the retirement mode. 4% guarantee by govt is so much better than non guarantee 4% return by eastspring income fund with potential fund dropping also . Luckily, he took my advise to sell away in 2018 & move to CPF life.

    JPM morgan Global income fund , fidelity income fund. All drop >15% within weeks. My friends also got hit. Luckily no leveraging. Just 15% to 20% loss within weeks.
    Only My lady friend bought Fidelity income from big local bank with leveraging . With cash 500k & borrow another 500k. That was I think 2014 or 2015. I told her fund can drop very fast & may trigger margin call very fast if it happen. Anyway, she should be ok as she did make at least $2m from enbloc.

  23. #2633
    Join Date
    Aug 2009
    Posts
    3,943

    Default Re: BOND THREAD

    I have been "Advised" to buy many bonds / funds... like the following

    Hyflux. : by DBS, around 6%
    Swiber : by DBS, around 6%
    Mortgage bond : around 6%
    Coco bonds
    etc

    Other than Coco Bond I mentioned in my earlier post. I would like to share what is mortgage bond.

    Banks repackaged their mortgage loans given to borrowers (like businesses and individuals) into bonds and sell to their retail investors in the form of mortgage bond and giving them leverage of 60-70%.

    Therefore banks transfer their credit risk to the bond buyers and yet earn the management fee of 1.5% and income on the leverage.

    Now, there is very heavy redemption of the mortgage bond. The whole problem is, the bond sellers have no right to sell the underlying properties. So, the bond buyers get margin calls for their leverage.. and redeem and yet the fund manager has no cash to redeem as they can't sell the underlying .. So what will be next....ask the US government to help...

    The risk in the credit market is not over yet.

    What will be next after the US$2tn... nothing substantial can be offered already and US is going to be the top of the Covid-19 very very soon...perhaps next week...

    Initial jobless claim will also cross million very soon...
    Last edited by Laguna; 26-03-20 at 16:55.

  24. #2634
    Join Date
    Jul 2012
    Posts
    26

    Default Re: BOND THREAD

    Hi, any idea why fraser retail bond 3.65% drop so much? Other retail bond /astrea bond doesn’t drop as much. Tia

  25. #2635
    Join Date
    Mar 2008
    Posts
    706

    Default Re: BOND THREAD

    Laguna, re your post on mtge bonds, if you are referring to US mortgages, I saw an article which was very good in explaining how their system works and how in the current mkt there will be a lot of issues, including:
    1. the originators of the loans typically take around 3 years to cover cost - after that it's mostly profits
    2. when int rates drop so much as they did the last month, customers will refinance - this means some / many of the loans are loss-making for originators
    3. they are still responsible for paying their counterparties even though they have "sold" the mortgages

    God knows who (i.e. which banks / funds) are holding onto these...

  26. #2636
    Join Date
    Mar 2008
    Posts
    706

    Default Re: BOND THREAD

    Sying, my own feel is that some bonds were held by more funds / leveraged owners, so when there was liquidation, certain bonds were hit harder.

    Same for 4.5% SPH perp versus 4.0% SPH perp. Callable about 1 year apart, but seems that the 4.0% was hit a lot harder than the 4.5%.

    Hard to say whether situation will improve / liquidity will come back

  27. #2637
    Join Date
    Aug 2009
    Posts
    3,943

    Default Re: BOND THREAD

    Thanks Starrynight... good read.. read 3 times...but not that easy to understand.
    There are very big names in this business.

    Hedge fund, coco bonds etc etc etc are also in the same boat.

    USA does not have sufficient / effective test kits.. the full blown in USA is not too far.

    Update of situation is USA

    March 27 (GMT)

    alert 18691 new cases and 400 new deaths in the United States
    NEW YORK (from New York Governor Cuomo daily briefing):

    Apex of hospital need could be in 21 days from now in New York
    All hospitals need to increase capacity by 50%, some by 100%
    Need a total of 140,000 hospital beds. Currently have 53,000 (an additional 87,000 hospital beds are needed)
    Need a total of 40,000 ICU beds. Currently have 3,000, with 3,000 ventilators. An additional 37,000 ICU beds are needed
    Will use college dormitories, hotels, nursing homes, and all possible space by converting it to hospitals if needed in April
    138,376 people have been tested
    Schools will stay closed for an additional 2 weeks after April 1, to then reassess the situation and extend again if needed. 180 days requirement has been waived
    "This is not going to be a short deployment [...] This is going to be weeks, and weeks, and weeks [...] This is a rescue mission you are on, to save lives. [...] You are living a moment in history that will change and forge character"

  28. #2638
    Join Date
    Mar 2008
    Posts
    706

    Default Re: BOND THREAD

    This is the link I sent to Laguna: https://mbshighway.com/mortgage-crisis.html

  29. #2639
    Join Date
    Mar 2008
    Posts
    706

    Default Re: BOND THREAD


  30. #2640
    Join Date
    Jul 2012
    Posts
    26

    Default Re: BOND THREAD

    Thks Starrynight... I thought it’s going to be another potential default
    This bond Shd be “safe” enough to hold?

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