Bond Market Developments : More Good News

We have been unhappy with the state of the SGD bonds OTC markets for a while now as we noted in May when an investor submitted some market feedback to the ST forum pages.

For myself it is with a twinge of slight guilt for the years that I have resisted promoting transparency from my little corner, when I still had some little influence. But that would have made little difference, I’d like to think. Because Canada has had this problem for years too.

The Canadian Securities Administrators, a coalition of the country’s provincial and territorial securities regulators, announced last month it’s starting a review of transparency in the C$390 billion ($366 billion) corporate bond market. The CSA questioned whether the private sector-led transparency model currently in place is working, and if more active regulation is needed.

The move comes as bond trading falls under closer scrutiny worldwide with the top regulator in the U.S. calling for more public information on private trading, and the European Union seeking to build a system to publicly disclose prices in real time.

We noted again last month in Bond Market Developments : Elsewhere, New Rules Coming For OTC, that the EU is following in US footsteps to implement stringent standards for their bond markets which will be a relief for market users when they are finally implemented even as the US is stepping up scrutiny on bond price mark ups. Now Canada will not be left behind.
Meanwhile in Singapore, the MAS is gently hinting at their concerns on the “prevalence of unrated debt” that have been flooding the markets, that could be well referring to every single issue we have had in the past month.
Singapore’s capital markets are set for more rated bond issues as the city’s regulator considers ways to promote transparency and deepen the business.

The Monetary Authority of Singapore has raised the issue in recent discussions with market participants, according to multiple sources.

Although there is no suggestion that ratings will be compulsory, the discussions point to regulators’ concerns that the prevalence of unrated debt is decreasing transparency and hurting liquidity.

We should do well to expect that Singapore will be stepping up the pace to clean up the marketplace and some white papers to be put forth in the near future to further market development.

I would take this opportunity again to put forth my Singapore infrastructure bond idea : SINGAPORE BOND MARKET : An Idea For Transport and Infrastructure Bonds.
An aging population really has to get used to the idea of bond ownership and it is within our control to make it a fair and equitable marketplace if we learn just to be astute in our investment decisions and make sure that issuers and their banks give us a reasonable deal.