Bonds In Conversation : Desperately Seeking Some Value, Starting With Donuts

It is called a sandwich and its HKD 58 which is about SGD 9.25, roughly what you would pay for a sandwich in MBFC.

It is, however, done the proper Parisienne way, according to my friend, Ms Singapore Gourmet living in Hong Kong.

So for SGD 9.25, you get an ordinary sandwich or a gourmet sandwich which says something about value for money which strikes a similar chord with Krispy Kreme donut prices – Singapore $2.6, US $1.2 and Malaysia $1, all quoted in SGD, that is apparently because Singapore’s donuts have their ingredients all flown in from New York ? (why New York ? and not LA ?) By the way, Krispy Kreme in Hong Kong shut their doors about 2 years back.

Other examples given by Retired Trader.

1. Sony camera battery – Singapore SGD 78, Hong Kong SGD 28 and Taiwan SGD 35.
2. Demovate cream (medication) – Singapore SGD 28, Malaysia SGD 8 and Thailand SGD 6.

So much for the strong SGD policy.

China is crying foul over Starbuck coffee prices which shows they are interested getting some value for their money. We should take heed too and start paying attention to even the financial products that we buy and make sure we are getting our money’s worth.

In this week, just about everything rallied –  bonds, stocks, commodities and roti prata (information supplied by Wealthy Friend quibbling over 20 cts). At the expense of the USD, of course.

Interesting developments around the globe where we are seeing China step up in a big way, the latest with their bond market developments, allowing offshore access to their USD $4trillion onshore market which is the world’s 4th largest the US, Japan and France. SHCOMP is about USD $2.4 trillion in size. [ PS : we know that once that happens, free markets are also free to default ?]

http://www.ft.com/intl/cms/s/0/4f0950da-3b98-11e3-87fa-00144feab7de.html?siteedition=intl

“Oct. 23 (Bloomberg) — China’s biggest banks tripled the
amount of bad loans written off in the first half, cleaning up
their books ahead of what may be a fresh wave of defaults.”

China is also conducting their own little Taper exercise, tightening rates to rein in the Fed’s free press. We are witnessing Chinese might when markets moved last week on Dagong’s credit revision on the US and also yesterday on rumours of new chinese property measures. China is filling the void of Big Brother which makes the 3rd plenum of the CCP next month all the more important to all our lives given that the FOMC on the 29-30th will probably pass as a non event.

The lesson of this week would be for us to lock in the value if we are seeing gains instead of acting like a deer caught in the headlights of an oncoming train. Surely the arbitrage of Krispy Kreme Singapore and Malaysia will spur a branch in JB ? Unless the government steps in with anti donut dumping laws ?

Oh, an a little commentary on OCBC mulling a bid for Wing Hang bank. Overall, I would say it is a credit neutral event given that their cash balance has doubled between 2007 and now at SGD 16.4 bio (DBS is unchanged at SGD 17.7 bio and UOB is also doubled at SGD 33 bio). OCBC USD sub debt giving 1.7% pick up over UST presents decent value as compared to the senior papers of some of the weaker regional banks. No comment on their SGD preferreds.

Leaving you with the prices.

2013 USD Bonds on SGX – Chinese property looks a tad weaker on the property reform rumours.

2013 SGD Issues – some prices are still sorely missing.

 

2012 PRICES