Not Say I Want To Say : Singapore Junk Bonds Can Buy, Ar ?

I felt I had to write this because I came off rather confused after reading this BT article published today.

Singapore junk bonds gain twice Indonesia as millionaires find haven

And it was not just me, it would appear because I checked with several market professionals who felt similarly perplexed by the article, to say the least, because I really do not repeat their reactions in verbatim.

“US dollar notes from the island have gained 7.9 per cent so far this year, the best among regional peers, according to a Bank of America Merrill Lynch index.”

I decided to find out what could possibly be in that “index” because how many Singapore junk issuers are there in USD ?

And just because they threw in NUS makes us look much less foolish.

“”The high-yield market has been supported by strong institutional demand, such as the private banks which have recently set up offices here,” said Dexter Tan, an analyst at the National University of Singapore’s Credit Research Initiative unit.

“Credit profiles of local junk-rated listed companies have improved at a faster rate” than Asean peers.”

Therefore I decided to dig out what junk Singapore has to offer and looked for those non investment grade issuers incorporated in Singapore or issuers with Singapore risk. This is what I got.

And if we look closely, more than half those companies are not Singaporean other than the fact the issuer may be incorporated here.

The names in bold are the only recognisable companies I can think of and if that is the case, then the Singapore junk index is made up of just these names.

Now to the real junk bonds we have locally in SGD, no one is talking about them much these days.  More bonds in the loss making camp than winners, which is not unusual given the rise in rates so I decided to fish out some serious losers for our guide.

Given that the prices are almost impossible to to ascertain for some of them, being quoted at a 10 ct spread for an indicative price, I approximated some of the present levels.

But there are winners too !! And I am glad I managed to spot 2 or 3 of them in this short little list of bonds that have rallied more than 2% year to date.

Look out ! Swiber perps are right up there wreaking havoc on our values in life ! Most of them enjoyed substantial credit improvements, otherwise.

Maybe the BT article should have just mentioned Swiber and Ezra perps instead ?

Yet what have we learnt ? Not say I want to say, ar,  better not anyhow say Singapore Junk is good.