Bonds In Conversation : Tepid Waters

Recollecting a story of my mother’s friend, both of whom are not on this earth anymore, and the Phuket tsunami. The waves withdrew fast and swiftly, drawing a crowd into the beach front, witnessing a phenomenon of which, none lived to tell the tale.

The QE tsunami has resulted in complacent positioning, exacerbated by currency wars along the way. We have witnessed a historical event in our lifetimes that has not been recorded in any economic textbook out there.

Bernanke has made history.

Bernanke’s recovery efforts could end in half trillion dollars of paper losses on Fed books

10Y UST YIELD HISTORY

This is a 40 year chart of 10Y bond yields in the US. And we are looking very small here. Its is the same for Singapore and everywhere else.

I think if anyone expects their bonds to rally much from here must be a very brave person indeed (unless of course you are pulling from Italy to buy into Spain ? which will probably be the next fad).

Credit news

26 Feb NEW DELHI: The Central Bureau of Investigation (CBI) has registered a case of cheating and criminal conspiracy against Singapore Telecommunications, BhartiAirtel and Tata Communication for causing a loss of around Rs 48 crore to the government by illegally providing international long distance (ILD) services.

Unicredit Stock price plunge 4.186 to 3.90 in a week on the Italian election deadlock.

We have grown too used to this 0% rate environment. My advice is to wait. There is no risk reward for plunging headlong into a new investment and this is not a time for heroics.

There will be plenty of opportunities out there which you cannot miss out on. Meanwhile if you do not feel comfortable, there is time to get out. We are treading tepid waters now which buys some time to be confused.

Meanwhile, prices as usual. Slightly off market I would expect, because I pulled them off this morning and things change pretty quickly during the day.

TATA COMM 4 1/4 02/01/16 Feb-16 101.2
HDBSP 1.23 01/30/18 Jan-18 100.06
GOODPACK 4 3/4 01/30/23 Jan-23 99.75
MAYMK 1.35 01/28/14 Jan-14 99.99964
HONG FOK 4 3/4 01/24/18 Jan-18 100.9993
GUTHRIW 3.7 01/23/18 Jan-18 100.598
NUS 1.038 01/23/18 Jan-18 100.077
UNICREDIT 5 1/2 07/30/23 Jul-23 97.5
BIOSENSORS 4 7/8 01/23/17 Jan-17 101.2487
FRASER CENTREPOINT  3 01/21/20 Jan-20 99.99794
CDL NADAH SUKUK  1.57 01/16/15 Jan-15 N/A
ICICI 3.65 01/14/20 Jan-20 100
HPL 3 1/2 01/15/18 Jan-18 100.3976

CORPS

And Olam prices.

OLAMSP 6 3/4 01/29/18 SGD 94.75
OLAMSP 6 10/25/22 SGD 92.00
OLAMSP 5 3/4 09/20/17 USD 93.80
OLAMSP 2 1/2 09/06/13 SGD 99.80
OLAMSP 5.8 07/17/19 SGD 94.00
OLAMSP 7 09/29/49 SGD 85.00
OLAMSP 6 08/10/18 SGD 92.50
OLAMSP 3 02/25/13 SGD matured
OLAMSP 7 1/2 08/12/20 USD 95.50
OLAMSP 4.07 02/12/13 SGD matured