Bonds In Conversation : Those Who Buy Today Are Luckier Than Those Who Bought Last Month

I was chatting with my stock broker and he was telling me that he and his mates aren’t having a great time and neither are their oil trader friends and, in his opinion, only the mee pok seller is doing fine.

He has been doing margin calls daily and raising the hair cuts for some stocks and its all no fun facing irate clients.

And all this means one thing, clients will have to cough up the cash either by liquidating other investments or from their pockets.

Anybody bought bonds or stocks in the past 2 weeks ? That was a question I asked during the seminar we had last week.

Because all I can say is, Congratulations, your timing is much better than others !

I will not talk about this week’s events for once because it has been a whirl and we should not be microscopic in such times or panic as every other person is doing.

It has been over 2,300 days of rally for the S&P 500 without a 10% correction, the 3rd longest bull run in history when interest rates are at 5,000 year lows, according to BofA.

The other 2 longer bull runs. http://www.cnbc.com/2015/05/07/sps-third-longest-bull-market-ushers-in-stock-volatility.html

Period: Dec. 4, 1987, to March 24, 2000
Run in index points: 223.92 to 1,527.46
Change: 582.15 percent
Duration: 4,494 days

Period: June 13, 1949, to August 2, 1956
Run in index points: 13.55 to 49.74
Change: 267.08 percent
Duration: 2,607 days

Where we currently stand ? At >100% since this day 6 years ago in 2009 and very frightened indeed according to the CNN Fear & Greed index.

Bonds In Conversation : Hard Times

Arguably the only reason to be bullish risk assets right now is there are no reasons to be bullish” : BofA

It is a slow crawl and we are not at the meltdowns that we have experienced in the past because there is really no impetus for this one except my personal opinion of the diminished liquidity situation as the cause of this 2015 crisis and the Minsky moment that we will never be prepared for.

And here, I would like to quote something from last year and from one of our writers who has gone into a self imposed/voluntary exile.

I can tell you, with certainty, that day will never come, even if the hurricane does. We will never know certainty. If the crash happens most people will be too frightened to step up to the plate, uncertain as to whether the lower levels are a buying opportunity, or if they are catching a falling knife, or if in fact the financial system really has reached the point of total and permanent collapse in which case we will instead be looking to buying some land, some guns and go into survivalist mode, like in that zombie movie.https://tradehaven.net/uncertain-times-2/

Are we in a crash ? Is this the bottom ?

All I know is that people who are buying today are better off than those who bought last month and the mee pok seller is probably going to see better business in the days ahead of belt tightening.

**************

Junk and scandals continue to roil Asian credit markets. 2 in Singapore – Noble and China Fishery Group.

Worst Asian Bonds For the Week

1. CFG INVESTMENT B2/B/B+ ( China Fishery Group ) 77.50 18% -20.25 (some say its closer to 60 cts)
2. ROLTA LLC BB-/BB- 75.00 23.69% -12.53. MIE HOLDINGS B/B (-ve outlook) 58.75 25.45% -10
4. YINGDE GASES INVT B2/BB-/BB 83.00 16.25% -8.75
5. ANTON OILFIELD SVS B2/B+ 61.00 26.26% -6.25
6. VEDANTA RESOURCES PLC Ba3/BB- 73.50 12.56% -6
7. NOBLE GROUP Baa3/BBB-/BBB-  86.75 10.57% -6

But Singapore markets are unperturbed, rolling out 2 mega deals with the World’s Lowest Coupon for a new AT1 bond – the OCBC 3.8% perpetual and 1.2 bio worth of LTA bonds.

This is even as distress hit domestically as “Jurong Aromatics Corp., operator of one of the world’s largest petrochemical plants, can’t service its interest payments and is negotiating a debt restructuring with bankers amid a plunge in oil prices, people familiar said.

Jurong Aromatics is currently owned 30 percent by SK International Investment, 25 percent by China’s Jiangsu Sanfanxiang Group Co. and 10 percent by Glencore. Other shareholders include Arovin Ltd., Shefford Investments Holding, UVM Investment Corp., EDB Investments Pte and Essar Ltd.” http://www.bloomberg.com/news/articles/2015-08-19/singapore-s-jurong-aromatics-said-in-debt-talks-after-oil-plunge

Outflows continue around the world with “U.S-based high-yield bond funds reported $1.2 billion in outflows, while U.S.-based investment-grade corporate bond funds posted their biggest cash withdrawals since June 2013, at $1.8 billion, data from Thomson Reuters’ Lipper service showed on Thursday. The latest figures, for the week ended Aug. 12, mark the third straight week of outflows for the two fund categories, Lipper said. “The flows data indicated investors were running away from high yield in both mutual funds and ETFs,” said Pat Keon, research analyst at Lipper.” http://globaleconomicanalysis.blogspot.com/2015/08/blowout-in-some-junk-bond-spreads-bond.html#Qd6x0p5bVDLFrtEr.99

Thus when I read about Aspial launching a retail bond that is priced at the tightest spread we have ever seen for their name and the longest maturity they dare venture to, I do not dare to imagine we have seen the bottom yet and “those who buy now are luckier than those who had bought last month”, definitely does not apply in this case.
Good luck !
Leaving with the indicative prices and I will attempt to upload the bond directory this weekend.
SGD 2015 Corp Bonds
Bonds In Conversation : Those Who Buy Today Are Luckier Than Those Who Bought Last Month
SGD 2014 Corp Bonds
Bonds In Conversation : Those Who Buy Today Are Luckier Than Those Who Bought Last Month 1

ASIAN BONDS

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Bonds In Conversation : Those Who Buy Today Are Luckier Than Those Who Bought Last Month 5