SGD Corps Comments : They mark them up, they mark them down

When I see the prices now. I know its a retard retail stand up comedy.

My fund manager friends say all the prices are way wrong but who cares because they are keeping it pretty and their mark to markets are looking good.

Today for example, we have interest rates up 0.04 to 0.19%. Technically, bond prices should be lower assuming the companies have not improved in their credit spreads overnight (which few have).

1Y 0.495 0.46 0.04
2Y 0.74 0.6825 0.06
3Y 1.08 1.025 0.06
4Y 1.565 1.425 0.14
5Y 1.9275 1.78 0.15
7Y 2.44 2.257 0.18
10Y 2.9225 2.735 0.19
15Y 3.43 3.25 0.18
20Y 3.5725 3.395 0.18

What we find instead is a case of extremely uneven price adjustments that I am worried about.

For instance, amongst the 2022 papers, HDBs are down 2 cts but the rest falling much less. This is unusual considering that bonds like Wingtai 09/2022 are less robust than HDB and we are seeing their yields converge to less than 1% difference for 10 years of risk.

Even better, Wingtai managed to outperform most of the 2015-2017 papers in terms of yield change.

It is not just Wingtai. Tata Communications 2018 and HPL 2018 managed to beat HDB 2018 too by a mile, down just 0.5 cts compared to HDB’s 1 ct drop.

I am hearing retail demand for GLP and Mapletree perps and the street is running low on stock and of course, marking prices higher. Buyers are in danger of short changing themselves at this rate. Why not Ascendas Pte Ltd perp as a better substitute, callable 04/2017, yield 4.75% on offer of 100.00, owned by JTC Corp ?


Qualifier : Comments and opinions here are my own. I accept no responsibility for any of the prices listed or suggestions I make on this post. I have no intention of buying any of the above mentioned bonds.