Bonds In Conversation : Shark Attack Victims Feel No Pain
They say that shark attack victims often feel no pain. (Source : National Geographic)
Caught in the middle of a corporate bond issuance frenzy, I think nobody is feeling any pain yet. Except for maybe the holders of the old NOL papers maturing in 2020 and 2021. I have been informed by a reliable source that Standard Chartered just sent out a scathing recommendation that echoes mine yesterday, which is to sell those issues to buy the new ones. If you missed the NOL new issue review click here.
We are in the middle of a 5 month long feeding frenzy now. Over SGD 16 billion worth of papers issued since 1 Jun 2012 with the SGD appreciating 6% against the USD during this time. If you are a private banking customer with USD base currency, you will see handsome gains in your portfolio compared to the Singaporean who saves in SGD.
Are you any smarter ? Perhaps. But perhaps not if you are the 78% retail demand who bought into the NOL SGD 300 million issue yesterday.
I spoke to an old friend recently, who works for the syndication department of a large SGD bank. She says that the market is really hot and since people want to buy, just give it them if they have the money to pay. It feels irresponsible but we are dealing with rich people here who have the minimum SGD 250k to spend so its does not feel criminal since they can afford it.
As I write, I see them reopening the Olam 10Y at 100.00. Wow, milk the market while its hot. And I bet this one will be 100% retail demand.
I am considered a sort of expert on the SGD corporate market but I really hate to spoil the party. Good luck on being shark bait. Just look at the list below. Nothing is really flying, even the Indian Oil and notice, Genting has stalled again.