Who Dares To Write About The Singapore Bond Market

Photo courtesy of Mr P., in Tokyo where it snows every 54 years in November.


Shock and awe?
We can’t blame Trump for it all.
Singapore bonds are ratcheting,
towards their day of reckoning.

The best performing bond of 2016 back in October, the 30 year Singapore Government Bond which I had crowned the best “Quick Buck” bond of the year, that had returned 14% in 6 months, has been tipped off the throne in less than 2 weeks, more than unceremoniously and in disgrace which is something has happens only once in a rare blue moon that incidentally shone in May  and will not happen again till Jan 2018. Bond is now just about 2-3% up, in very volatile times.

Who Dares To Write About The Singapore Bond Market

Chart of the 30Y Singapore Government Bond since issue in Mar 2016.


When the companies started failing along with their bonds, the entire Disneyland story came apart at the seams because perhaps, the Singapore bond market has always been a pipe dream ?

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Source : Bloomberg
List of defaults in the history of the Singapore bond market to date.

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It looks ugly when the record books have been a clean slate except for Lehman marring the picture until lightning struck 6 times since a year ago, making this the first anniversary of the first default since Lehman !

When it rains, it pours ! There may be more to come from more distressed names seeking resolutions with their bond investors.

  • ASL Marine – seeking extensions on their bond maturities
  • Kris Energy – seeking to restructure debt maturity, lower coupon payments and ease bond covenants.
  • Ezra Holdings – sought successfully to loosen financial covenants on their bond while delay in filing of accounts (could be due to Perisai Petroleum’s bankruptcy)


Who dares to talk about the Singapore bond market ? Who dares to call bluff on the economic outlook before it is formally acknowledged? Who dares to say anything but good about Singapore’s monetary policy ?

Nobody would, if they were sane after their onshore education and their fear of death, or, even worse, some form of personal reprisal.

Singapore – The Scary City

Digressing a little, for the fear of speaking out loud, China has now seized some SAF armoured cars in transit, India is pushing for Gujarat to rival the Singapore derivative markets, China plans to build a new S$ 14 billion dollar port in Malacca after building a “scary” US$ 100 billon city a stone’s throw away from Singapore borders.

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And not a bright spark to be seen in the financial markets as financial services registered their first ever year on year slowdown, albeit a small one of -0.7%, since the financial crisis in the recent 3Q16 final GDP number, that turned out to be less negative than expected yet still negative.


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The stock market has little to go by as Singapore Charges 3 in Rigging That Saw Stocks Plunge by Billions, in the most serious incident of market manipulation in the city-state’s history.

And to date, Singapore still holds the record for having 133 traders rig the forex and interest rate market at the same time.

I would beg to disagree with Bloomberg’s audacious and cheeky “dumb money” chart about Singaporean bond investors because these poor folks are operating in a very harsh environment with plenty of sharks in the water who would sell a bond to a client who thought that “coupon had something to do with free parking.


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Let’s see how dumb the market really is – The Hall of Shame

Dragging out the bonds issued in the past 3 years, we tabulate those that have lost >5% and the results are surprising.


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Singapore Corporate Bonds Hall of Shame


The biggest losers were those bonds issued in 2014 but we would have thought that after last Nov’s default out of Trikomsel, we would not see a 10% loss like the retail Aspial bond issued just this year.

Were investors really stupid in 2014 ? Or did they have another reason for their investment decisions ?

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There we have it. 2014 – the year after 2013 where we saw a peak in Singapore real estate that delivered good fortunes into kitty for the investor, in a time when SIBOR was near zero for an extended period and the SGD dollar looked cosy in her comfort zone, putting cap on interest rates.

It was the best time to sell any bond, to be honest, and even easier if the owner of the windfall thought that the coupon referred to free parking.

Looking at the situation, just give me a good reason to buy ?

How about half dozen reasons ?


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