Bonds In Conversation : Obsessing With Size

This will be the start of a series of weeklies on the SGD bond scene. Do keep the feedback coming.

I decided to drag out all the benchmark issues of this year and see how profitable they have been for investors. Behold the riches of our fellow men.

These 39 issues total some SGD 18.84 bio, approximately 70% of total bonds issued this year. They include the largest ever single issue in SGD, the Genting Singapore PLC perpetual bond for SDG 1.8 billion.

Looking at the table, I guess we can conclude that big issues do not seem to be holding up as well as the smaller ones.

For instance, Genting has made SGD 22.5 million dollars off the street for their perpetual which is bid at 98.75 now. That means that if they were to issue that very same bond now, they would have to cough up the extra SGD 22.5 million in yield for it.

Other than the exceptions of Genting and some of the Keppel issues, the rest of the papers are holding up reasonably well. In fact, netting a total profit of > SGD 100 million. This works out to a 5.67% average return on the year.

Pretty remarkable if you ask me because if you had bought the Dow Jones for the year, you would be only up 4.3% versus the SGD dollar.

That is, assuming you take profit on your holdings.