Apr 02, 2015

    SGD bond issuances up 20% to $3b last month

    STRONG demand for Singapore dollar bonds pushed issuances last month to hit $3 billion, 20 per cent higher than the same month last year even as unease grows among bond investors wondering how long the debt rally will last.

    The Markit iBoxx SGD corporate total return index is up 1.14 per cent year to date to 112.23 on Tuesday, off its all-time high of 112.26 on March 17.

    The $3 billion was raised from 23 issues; in March last year, there were 17 issues worth $2.5 billion, according to Bloomberg data.

    Year-to-date issuance, though, is still down compared to the same period last year.

    For the first quarter of this year, there were 44 deals worth $4.78 billion versus 41 issues and $6.63 billion in the first three months of last year.

    On nervous investors, Clifford Lee, DBS Bank's head of fixed income, said "markets are still on tenterhooks", as seen from the first quarter's lower volume.

    There are a lot of market risks and pricing volatility, said Mr Lee.

    "Deals are smaller...$50 million here, $70 million there," he noted.

    The Singapore dollar bond market is less of a trading market with investors of the "take and hold" type, said Mr Lee.