Market View : New Asian Bond Trading Platform Is Bad News
FT reports that SGX, Banks Discuss Starting Asian Corporate-Bond Platform. http://www.ft.com/intl/cms/s/0/47a5051c-6d44-11e4-b125-00144feabdc0.html?siteedition=intl#axzz3JA117a8C
The banks, asset mgrs include UBS, Schroders and Alliance Bernstein.
My initial assessment is that it is bad for current investors and good for future market participants.
Reasons :
1. SGD bond market is mostly non transparent which means that prices do not exist for trading but more for revaluing portfolios.
When actual price discovery occurs, many papers marked at 100 would probably be adjusted to fair value.
2. Most SGD bonds are priced too tightly in their initial offering because of lack of competition.
When more participants enter the marketplace, pricing will veer towards international levels and many of our local corps have been getting away with near investment grade pricing.
What will probably happen would be it shall start with perhaps a daily closing price because there really is not enough volume to justify the migration to a trading platform.
The G3 currency bonds will move onto the new platform which will give savvy SGD investors ample time to reassess their options until then.
Good luck !
That’s good news for small fry like me 🙂
I’ve been asking my DBS banker for buy-price quotes, and they are usually around 0.8 higher than the prices you have in your price guide, i.e. buy-sell spread is on average around 1.5.
Well, I would not expect too much yet.
Yes, look at our neighbours’ bond platforms for investors
Malaysia: http://www.bondweb.com.my
Thailand: http://www.thaibma.or.th
Indonesia: http://www.ibpa.co.id
Hong Kong: http://www.cmu.org.hk
Looks like I will be closing down soon and not a medal for my efforts too.
Upcoming SGD issue?
http://www.dailymail.co.uk/wires/reuters/article-2838697/INDONESIA-PRESS-Sarana-Menara-issue-Singapore-dollar-denominated-bonds-Kontan.html
10Y + Backed by Asian Development Bank
http://www.ifrasia.com/adb-credit-fund-backs-two-local-debuts/21173395.article
Neat.
Will be institutional interest… definitely not for the retail market.
ya definitely for secondary bond market.
I bet yields must be high because it is from Indonesia + 10Y.
Very likely that I will invest in some, due to the underlying ADB guarantee.
For ADB guaranteed, might as well buy HDB which will yield higher.
Yes TH, ADB-guaranteed issues are usually below 4%.
I would only be interested if the yields are above 6% because they mentioned about 10Y.
“Looks like I will be closing down soon and not a medal for my efforts too.” – TH
No TH, some of those portals in our neighbouring countries are either owned by central bank or quasi government efforts for, up-to-date local bond yield/maturity database and pricing information (eg. Cbonds/Reuters/Bloomberg).
There is no way we can post freely in these platforms like Tradehaven. LOL, you have already crave a niche for yourself; are you not the best bond discussion site in Southeast Asia?
You have a nice evening 🙂
One more Indoensian coming – 5Y
http://in.reuters.com/article/2014/11/19/indonesia-press-sri-rejeki-isman-idINL3N0T914R20141119
According to their website: “Sritex is the world’s prominent partner in supplying military uniforms public authority and professional users with over 30 countries. Sritex is designated to be the official partner outside Europe to produce military uniform for NATO.”
http://www.sritex.co.id/uniforms
An earlier issue from them:
http://infopub.sgx.com/FileOpen/HCR1404044_E_SR8_Final_OC(1534)_92_s174.ashx?App=Prospectus&FileID=21300
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The Indonesian investor and his company Borneo Lumbung borrowed a total of $1.22bn from Standard Chartered and Austria’s Raiffeisen Bank International to acquire the Asia Resource stake from the Bakries in two separate deals. With the shares having collapsed as coal prices have fallen, he now controls a stake worth less than $25m in addition to having received a special dividend of more than $220m in connection with the separation deal.
Mr Tan’s friends, the politically connected Bakrie family, have fared little better. Their Jakarta-listed Bumi Resources, part of which was previously owned by Asia Resource, recently defaulted on an interest payment as it wrestles with a $4bn net debt pile that dwarfs its $320m market capitalisation.
Other companies in their group have been struggling, with Bakrie Telecom facing multiple creditor lawsuits in Jakarta and New York after defaulting, and Bakrieland having completed a debt restructuring last year.http://www.ft.com/intl/cms/s/0/a902de02-6bf4-11e4-b1e6-00144feabdc0.html?ftcamp=published_links%2Frss%2Fcompanies_asia-pacific%2Ffeed%2F%2Fproduct&siteedition=intl#axzz3JU5cDr4s