Bonds In Conversation : Missing the Forest For the Trees

29/11/2013 by

How did we miss the forest for the trees ? The best performing asset in the world this week would be Bitcoins which are up 50%.

The talk is that China has just got into the game of Bitcoins, being the second largest Bitcoin market in the world currently while Thailand is doing the right thing by banning them which got me wondering if they should ban Thais from buying London property too.

Plenty of ratings action with Holland, Ukraine and Tunisia downgraded by the S&P, Cyprus upgraded.

It is all about currencies too this week and the path of less resistance is still a continuation of trends. We are seeing new records and decade long records broken for currency pairs which markets are brushing aside as currency rotations with no further repercussions. https://tradehaven.net/market/fx/comet-on-thanksgiving-and-month-end-records-for-fx/

The outlook for 2014 has pretty much condemned EM to a slow growth while the developed markets take the driver’s seat. What is unpublicised are macro themes that are glaring at us which most official bank reports are choosing to ignore or selectively disseminate because it is almost a crime to be negative about the economy or about some governments as Vietnam just announced fines for citizens who criticise the government on social media (lenient as compared to China).

We are headed for a period of protracted slow growth and low productivity. http://www.bloomberg.com/news/2013-11-27/fed-reveals-new-concerns-about-long-term-u-s-slowdown.html

If the expected future return of equities is about 4 percent a year over the next decade as Ray Dalio of Bridgewater says, bond yields can just crawl along in peace and undisturbed even as the yield curve steepens.

In bond space, a new trend is starting to emerge. Good quality names are seeing duration extensions while the BBB and lessor credits are running into cautious bids resulting in duration shortening. High yields remain slightly challenged in a discerning environment.

Singapore saw yet another Oxley bond, winning the company the most frequent bond issuer of the year award, with its reopenings included. And a high yielder soon to be private company, Miclyn issuing a 3Y at 8.5% for SGD 150 million and trading at 100.20/100.35 today.

Perps are rallying after DBS successfully conducts its tender for its outstanding DBS 4.7% callable 10/2020 SGD 1.7 bio issue. SGD 805 mio new DBS 4.7% Basel III compliant bonds were issued and we are hearing the grey market at 101/101.50, reaping an instant windfall for successful bidders.

The Sembcorp 5% perpetual also ran up nicely in the past fortnight, which is worthy of mention, now trading above 101 after a lackadaisical launch back in Aug.

I would not call this a bull run as it is probably pent up demand from the rest of the 900 odd million who did not get their allocation and running on a one track mind to hitch themselves back on the perp bandwagon and who are probably missing out on the forest and bitcoins in the process.

Leaving you with the prices, all unverified.

USD Bonds listed in Singapore and Hong Kong

2013 SGD Issues

2012 SGD Bonds

Zoo River Safari

The River Safari is a costly experience when you bring 2 kids (son and niece) along and panda toys and photos are heavily marked up. And having seen pretty nice river exhibits in other zoos at lower ticket prices, I think I should have just brought them to stay over at Bintan for the night – would have worked out almost the same.

Category : Market, Rates/Bonds

Tags : ABN AMRO BANK NV 4.7% 10/2022, AGILE PROPERTY 8.25% PERP, ANTON OILFIELD 7.5% 11/2018, ARMF WHITESANDS 2.635% 04/2020, ASCENDAS 4.75% PERPETUAL, ASCENDAS REIT 4% 02/2022, ASPIAL 4.65% 09/2014, ASPIAL 5% 07/2016, BAIDU INC 3.25% 08/2018, BANYAN TREE 5.75% 07/2018, BANYAN TREE 5Y 5.3% SGD, BANYAN TREE 6.25% 05/2017, BESTGAIN REAL ESTATE VANKE 3.275 11/2017, BHARTI AIRTEL 5.125% 03/2023, BIOSENSORS INVESTMENTS 4.875% 01/2017, BITCOIN, CANARA BANK LONDON 5.25% 10/2018, CAPITALMALLS ASIA 3.8% 01/2022, CENTRAL CHINA REAL EST 6.5% 06/2018, CHALCO HK INVT 6.625% PERP, CHINA CITIC BANK 6% 05/2024, CHINA MENGNIU DAIRY 3.5% 11/2018, CHINA OVERSEAS FINANCE 3.375% 10/2018, CHINA OVERSEAS FINANCE 5.375% 10/2023, CHINA OVERSEAS FINANCE 6.375% 10/2043, CHINA URANIUM DEVELOPMENT 3.5% 10/2018, CIFI HOLDINGS 12.25% 04/2018, CITIC PACIFIC 8.625% PERP, CLIFFORD CAPITAL 1.625% 11/2018, CMT 3.75% 08/2024, CNOOC 4.5% 10/2023, COMFEED BV 6% 05/2018, COSCO 4.375% 01/2023, COUNTRY GARDEN 7.25% 04/2021, COURTS ASIA 4.75% 05/2016, DBS BANK 4.7% SGD PERPETUAL, DBS BANK SUB 3.1% 02/2023, DFCC BANK 9.625% 10/2018, EM, EVERGRANDE REAL ESTATE 8.75% 10/2018, EXIM BANK INDIA LONDON 3.375% 09/2017, EZION 7.8% PERPETUAL, EZRA 4.875% 04/2018, EZRA 5% 09/2015, EZRA 8.75% PERPTUAL, FED FOMC, FIRST GEN CORPORATION 6.5% 10/2023, FRANSHION BRILLIANT 5.375% 10/2018, FREIGHT LINKS 4.6% 05/2017, GENTING SINGAPORE 5.125% PERPETUAL, GENTING SINGAPORE 5.125% RETAIL PERPETUAL, GOODPACK 4.15% 08/2018, GOODPACK 4.7% 04/2023, GREENLAND HK 4.75% 10/2016, GREENTOWN CHINA 5.625% 05/2016 CNH, GREENTOWN CHINA 8% 03/2019, GS CALTEX 3.25% 10/2018, GUOCOLAND 4.1% 05/2020, GUOCOLAND 4.7% PERP, GUTHRIE GTS 3.7% 01/2018, HAITONG INTL FINANCE 3.95% 10/2018, HDB 0.943% 03/2016, HDB 1.105% 02/2017, HDB 1.165% 07/2016, HDB 1.368% 05/2018, HDB 1.52% 06/2019, HDB 2.088% 08/2022, HDB 2.505% 06/2024, HDB1.23% 01/2018, HEETON HOLDINGS SGD BOND 2Y 5.6%, HIAP HOE 4.75% 09/2016, HOLLAND DOWNGRADE, HONG FOK 4.75% 01/2018, HONG KOK 4.75% 01/2018, HOPSON DEV 9.875% 01/2018, HPL 6.125% PERPETUAL, ICBC 4.5% 10/2023, ICICI DUBAI 3.65% 01/2020, INDIAN OIL CORP 4.1% 10/2022, INDIAN OIL CORP 5.75% 08/2023, KAISA GROUP 8.875% 03/2018, KEPPEL CORP 3.8% 04/2027, KEPPEL CORP 4% 09/2042, KEPPEL LAND 3.8% 06/2022, KEPPEL LAND 3.9% 11/2024, KEPPEL T&T 2.625% 08/2019, KSH HOLDINGS 5.25 05/2016, LEND LEASE FIN LTD 4.625% 07/2017, LMIRT CAPITAL 4.48% 11/2017, LMIRT CAPITAL 5.875% 07/2017, MAPLETREE COMMERCIAL 3.2% 04/2021, MAPLETREE COMMERCIAL 3.6% 08/2020, MAPLETREE INDUSTRIAL TRUST 3.65% 09/2022, MAPLETREE TREASURY 5.125% PERPETUAL, MENCAST HOLDINGS 5.75% 09/2016, MICLYN EXPRESS OFFSHORE LIMITED 3Y HIGH 8%, MINGFA GROUP 13.25% 02/2018, MODERN LAND CHINA 13.875% 11/2018, MODERNLAND OVERSEAS 11% 10/2016, NAM CHEONG SGD 5% 08/2017, NOL 4.25% 04/2017, NTUC INCOME INSURANCE 3.65% 08/2027, NUS 1.038% 01/2018, OCBC 4% PERPETUAL, OCBC CAPITAL CORP 2008 5.1% PERPETUAL, OLAM 6.75% 01/2018, OLAM 7% PERPETUAL, ONGC VIDESH 3.75% 05/2023, OUE 4.25% 10/2019, OUE 4.95% 02/2017, OXLEY 3Y SGD 5.15%, OXLEY 4.75 09/2015, OXLEY 4.75% 07/2018, OXLEY 5.1% 05/2017, PCRT 5.25% 07/2016, PCRT 6.375% 09/2015, PERUSAHAAN PENERBIT 6.125% 03/2019, PETRON 7.5% PERP, POLY PROPERTY GROUP 4.75% 05/2018, PROSPEROUS RAY 3% 11/2018, PROSPEROUS RAY 4.625% 11/2023, RAFFLES EDUCATION 5.8% 02/2016, RAFFLES EDUCATIONI 5.9% 05/2018, RELIANCE INDUSTRIES 5.875% PERP, REPUBLIC OF INDONESIA 3.375% 04/2023, REPUBLIC OF INDONESIA 4.625% 04/2043, REPUBLIC OF INDONESIA 5.375% 10/2023, REPUBLIC OF KOREA 3.875% 09/2023, SAN MIGUEL 4.875% 04/2023, SBS 1.8% 09/2017, SEMBCORP INDUSTRIES 3.64% 05/2024, SEMBCORP INDUSTRIES 5% PERPETUAL, SHIMAO 6.625% 01/2020, SHUI ON DEVELOPMENT 8% 01/2015, SINGAPORE LABOUR FOUNDATION 1.3% 06/2017, SINGAPORE LABOUR FOUNDATION 3.203 09/2023, SINGAPORE POST 4.25% PERPETUAL, SINOPEC 4.375% 10/2023, SP POWERASSETS 3.4% 09/2032, STARHUB 3.08% 09/2022, SWIBER 9.75% PERPETUAL, SWIRE PACIFIC 4.5% 10/2023, TAT HONG 4.5% 07/2018, TATA COMMUNICATIONS 4.25% 02/2016, TATA INTERNATIONAL 4.3 04/2018, TATA STEEL 4.95% 05/2023, TML HOLDINGS 4.25% 05/2018, TRIKOMSEL 5.25% 05/2016, TUNISIA DOWNGRADE, UKRAINE DOWNGRADE, UNICREDIT SPA 5.5% 07/2023, UNITED ENGINEERS 4.2% 01/2017, United Envirotech 3Y SGD 7.25%, UOB 3.15% SUB 07/2022, UOB 4.75% PERP SGD, UOB 4.9% PERP SGD, UOL GROUP 2.493% 05/2015, UOL GROUP 3.043% 05/2017, VEDANTA RESOURCES PLC 6% 01/2019, VINGROUP JSC 11.625% 05/2018, VTB BANK 4% 07/2015, WANDA PROPERTIES 4.875% 11/2018, WILMAR 3.5% 01/2017, WILMAR 4.1% 01/2019, WINGTAI 4.25% 03/2023, WUZHOU INTL 13.75% 09/2018, WYNN MACAU 5.25% 10/2021, YINGDE GASES INVT 8.125% 04/2018, YUZHOU PROPERTIES 8.75% 10/2018

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Bonds In Conversation : Missing the Forest For the Trees

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