Bonds In Conversation : Flogging A Dead Horse In The Year of The Horse

07/02/2014 by

We are back to where we were a week ago, almost and the Chinese lunar new year has come a full circle quickly. But despite the recovery we are seeing in the markets, a heavy foreboding in our hearts tell us that the troubles are far from over.

From Pimco to Templeton, the biggest fund managers (left out the Hedge word) are expressing huge doses of skepticism as default risks for China’s banks continue to climb and doubts over their economic numbers mount.
http://www.businessweek.com/news/2014-02-06/pimco-mystery-meat-concern-drives-up-lender-risk-china-credit

This is besides the load of name calling with Philippines the latest to liken Chinese leaders to Hitler which has probably resulted in Dagong lowering Philippines rating outlook because of all the future Chinese trade they will be missing out on. http://www.telegraph.co.uk/news/worldnews/asia/china/10618722/Philippine-president-compares-Chinas-expansion-to-Nazi-Germany.html

Economic numbers around the world look like they are stabilising with the latest round of developed markets PMI’s above expectations. The only rain on the parade is the FOMC and the continuation of the Taper which the world is getting used to.

No one is really buying all the hullabaloo.

Market’s 19th Breakdown Sees Bulls Unmoved as Trillions Lost : Bloomberg, 5 February 2014
“Eighteen times Michael Shaoul has watched the U.S. stock market lose 5 percent or more since 2009. Eighteen times he’s been rewarded for holding on.” http://www.bloomberg.com/news/2014-02-05/market-s-19th-breakdown-leaves-bulls-unmoved-as-3-trillion-lost.html

Contagion Rejected as Biggest Bond Buyers Double Down on Junk : Bloomberg, 5 February 2014
http://www.bloomberg.com/news/2014-02-05/contagion-rejected-as-western-asset-buying-junk-credit-markets.html

I am not sure about you but I feel like we are flogging a dead horse in the year of the Horse.

Leaving you with the prices (our bond directory will be updated on Sunday because Bernardtcl is on leave).

USD Bonds listed in SGX and HK.
Chinese names dropping, both the high yields and the investment grades.

SGD Bonds
In Singapore, we had issues out of Suntec Reit for a new 6 year paper at 3.35% and an NUS 5 year at 1.708%.
Even Mustafa is holding well, trading at 100.20/100.40

2014 Issues