Singapore’s mom-and-pop investors are losing their fervour for bonds as the economy cools, after the amount of notes sold to individual investors was twice initial public stock offerings in 2015.
Prices on the exchange-traded notes are beginning to converge with those sold to institutions on the interbank market. Four companies raised $975 million selling bonds to individuals last year, outstripping the $496 million of IPOs, filings show. The one bond sale this year to such investors met with lower demand.
Appetite has been dampened by two defaults on bond payments in the past six months and concerns Singapore’s economic slowdown is deepening. Home prices in the city-state have declined in the past 10 straight quarters, while energy and marine-engineering companies are enduring the pain from a two-year slide in crude oil.
“Prices and yields have converged for some bonds,” said Terence Lin, assistant director of bonds and portfolio management at fund researcher iFast Corp. “Arbitraging the two markets may appear to be a logical step but we believe this is still limited by the thin exchange-traded volumes.”
Six of eight bonds sold by the likes of developers CapitaLand Mall Trust, Frasers Centrepoint and Oxley Holdings are trading at weaker prices on the Singapore Exchange than levels quoted by interbank traders, according to iFast. Property and jewelry company Aspial Corp.’s second retail bond issue this week fetched a lower price premium than its debut sale in August.
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Prices on the exchange-traded notes are beginning to converge with those sold to institutions on the interbank market. Four companies raised $975 million selling bonds to individuals last year, outstripping the $496 million of IPOs, filings show. The one bond sale this year to such investors met with lower demand.
Appetite has been dampened by two defaults on bond payments in the past six months and concerns Singapore’s economic slowdown is deepening. Home prices in the city-state have declined in the past 10 straight quarters, while energy and marine-engineering companies are enduring the pain from a two-year slide in crude oil.
“Prices and yields have converged for some bonds,” said Terence Lin, assistant director of bonds and portfolio management at fund researcher iFast Corp. “Arbitraging the two markets may appear to be a logical step but we believe this is still limited by the thin exchange-traded volumes.”
Six of eight bonds sold by the likes of developers CapitaLand Mall Trust, Frasers Centrepoint and Oxley Holdings are trading at weaker prices on the Singapore Exchange than levels quoted by interbank traders, according to iFast. Property and jewelry company Aspial Corp.’s second retail bond issue this week fetched a lower price premium than its debut sale in August.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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