SGD Rates & Bonds Weekly
Economic News
Mar Industrial Production +6.2% MoM vs expected +7.1%
Mar Industrial Production -4.1% YoY vs expected -3%
1Q Unemployment Rate 1.9% unchanged
IRS
Deal pricings kept the market busy not trading, exacerbated by the global uncertainty and UST strength. Rates are holding near their historic lows whilst the stock market hits a historic high, a divine combination.
Bids emerged in the short end 1-4Y, probably as a precautionary trade given the absolute low levels. Long ends offered down on cross currency swap deals that the corporate issues were expected to hedge upon.
The Mar Industrial Production numbers are a sign of times and like I said last week, we should still see USD/SGD trade higher in the current environment, regardless of the stock market performance. Malaysian elections on 5 May will likely dampen market trading activity and my view remains “Keeping to last week’s call to keep short end paid to hedge even risks while the other tenors will not be going anywhere for now.
Bonds
Times are bad when Singapore bond market volume trails Malaysia’s.
Hardly any volume to talk about in the past week and some 2014-2017 issues have not traded in 2 weeks. Yield levels have drifted along with the irs and UST, keeping bond swap spreads looking lean.
Given the Asean neighbours’ moves to control inflows and the Malaysian elections coming up, we should see another quiet week ahead on this month end and holiday tomorrow.
Corporates
| ANNOUNCEMENT DATE | ISSUE | AMT | CPN | MATURITY | SOR+ | |
| 25-Apr-13 | ABJA INVESTMENT CO 4.95% 03May23 | 300MM | 4.95 | 3-May-23 | 326 | swap to USD |
| 25-Apr-13 | RAFFLES EDUCATION CORP 5.9% 03May18 | 50MM | 5.9 | 3-May-18 | 509 | swap neutral |
| 24-Jan-13 | TATA COMMUNICATION NETHE 4.25% 01Feb16 | 400MM | 4.25 | 1-Feb-16 | 368 | swap to USD |
| 24-Apr-13 | ARMF WHITESANDS PTE LTD 2.635% 29Apr20 | 111MM | 2.635 | 29-Apr-20 | 183 | swap neutral |
| 24-Apr-13 | COURTS ASIA LTD 4.75% 02May16 | 125MM | 4.75 | 2-May-16 | 425 | swap neutral |
Rates are incredibly low… makes more sense to buy and hold than to trade.
Watch out for US weakness in the next 2 quarters. I wouldn’t call it a recession but feels like things are slowing down over there.
Irony isn’t it? JPY weakens and the world stops buying.
The economic numbers haven’t been living up to expectations except for consumer spending and housing.
Housing is important because of wealth effect but given the uneven recovery where youth unemployment is soaring, there is a generational gap that will only end in tears and anarchy because the youths will not want to inherit this sort of world.
My sentiment exactly. Seems that retailers in US are worried.
Rail traffic in US is also slowing down.