Singapore Corporate Bonds and Preference Shares

Analysis of Hyflux 6% Perpetual Capital

2016-07-22T08:30:00.000-07:00

Hi everyone,

Hyflux has earlier listed their perpetual capital which yield at 6% initially. While I did not apply for it, the price went up by 1% and for those who are safer and wish to invest in bonds, this may be a good one to enter.

Investment till Callable Date

Tenure = 4 years
Total Interest = $0.2400 per share
Capital loss = $0.014
Transaction Cost = $0.00608
Overall Return = $0.21992
Overall Annual Yield = 5.42%

From the statistics, this is the best yielding bond which is listed in SGX and available to retail investors like myself. Kindly note that the transaction cost is overstated because I factored in buying and selling cost which is not necessary so. Another thing to note is that this is unrated corporate bonds which carries more risks than those which are rated and which are bank-based.

I am still into REITs and business trusts so just for info for those who needs something safer.

Analysis of NEW 4 Year Oxley Bonds at 5.15%

2016-05-12T08:30:00.000-07:00

Hi everyone,

Oxley has launched another of their retail bonds. Here are the statistics.

Investment till Callable Date

Tenure = 4 years
Total Interest = $0.2060 per share
Transaction Cost = $0.006
Overall Return = $0.200
Overall Annual Yield = 5.00%

From the statistics, it is currently only fairly priced as their existing listed retail bond is giving overall annual yield which is slightly above 5%. This means that it is better to buy from SGX market rather than subscribe to new bonds. And that makes it less attractive.

I am currently more into REITs and business trusts but I will be using this as a benchmark to set my target for investment returns in other counters. But even if I have cash, I will buy the existing ones rather than to subscribe to new ones.

Analysis of Oxley 5% MTN Bond

2015-12-30T08:30:00.000-08:00

Hi everyone,

Oxley has earlier launch their retail bonds which I missed. With its current trading price, it seems to be the highest yielding bond and it has a chance to compete with the other bonds and even REITs. Here are the statistics.

Investment till Callable Date

Tenure = 4 years
Total Interest = $0.2000 per share
Capital Gain = $0.003
Transaction Cost = $0.006
Overall Return = $0.197
Overall Annual Yield = 4.94%

From the statistics, this is currently the bond with the best yield. Better than Aspial, Genting and even Hyflux preference shares. The overall yield is at 4.94% if you hold on to maturity. Moreover, you are not going to lose any capital if you hold on. The only issue is transaction cost which you can halve it if you hold on to maturity.

I am currently more into REITs and business trusts but I will be using this as a benchmark to set my target for investment returns in other counters.

Analysis of Perennial 4.65% 3 Year Bond

2015-10-20T05:49:00.000-07:00

Hi everyone,

Perennial Real Estate has launched a retail bond which I thought was quite good but not really good enough. Here are the statistics.

Investment till Callable Date

Tenure = 3 years
Total Interest = $0.1395 per share
Capital Loss = $0.000
Transaction Cost = $0.006
Overall Return = $0.1335
Overall Annual Yield = 4.45%

From the statistics, this is currently the second highest yield bond. The overall yield of 4.45% is only lesser than Aspial bond which is currently trading at 4.8% yield. The good thing is that it is only a three year bond so risk is actually lesser than a 5 year bond.

For me, I wonder. If there is a bond that generates a better yield, why settle for less. Not that this is not good, just that there is something better. Invest only if you want to diversify.

Analysis of Aspial 5.25% Retail Bond

2015-08-22T08:30:00.000-07:00

Hi everyone,

Aspial has launched a retail bond which I thought was fantastic, especially when we have so little bond offerings for retail investors like myself. Here are the statistics.

Investment till Callable Date

Tenure = 5 years
Total Interest = $0.2625 per share
Capital Loss = $0.000
Transaction Cost = $0.006
Overall Return = $0.2565
Overall Annual Yield = 5.130%

From the statistics, this is currently the bond with the best yield. The overall yield is THE highest at 5.13% if you hold on to maturity. Moreover, because it is still at IPO stage, there is no capital loss incurred. Thus, I think it is an excellent opportunity.

After IPO, I am looking at comparable counters like Genting Perp and Hyflux which are trading at a premium. So I don't expect any losses even if I sell earlier.

I do have some cash on hand and I will be applying for this to continue to build my cash reserves.

Updates on FCL Treasury 3.65% Retail Bond

2015-06-03T08:30:00.000-07:00

Hi everyone,

Just an update on the FCL Treasury 3.65% 7 year Retail Bond.

Price on 29th May 2015 = S$1.007
Interest = S$0.0365 per share
Yield = 3.625%

Investment till Callable Date

Tenure = 7 years
Total Interest = $0.2555 per share
Capital Loss = $0.007
Transaction Cost = $0.006
Overall Return = $0.2446
Overall Annual Yield = 3.440%

In my previous post, I have mention that it either follows the yield that is closer to Genting SP5.125% or CapitaMall 3.08% Retail Bond which means the price ranges from $0.98 to $1.04. Well the price seems now to hover just right between them at $1.007.

This is something which I don't really understand because FCL Treasury has the backing of Fraser Centrepoint which is by far one of the household blue chips that we know. Thus, there should be a premium attached to it. However, as of now, it is not moving up as much.

Well, there seems to have a competition of funds at this point with FCL Treasury rivaling Hyflux CPS 6% and OCC 5.1% all which has a shorter tenure and giving at least 3% yield and therefore look more attractive.

I have gotten 10 lots from this and will hold on to it at least until next year. It serves as part of my family cash reserve which I am trying to build.

Frasers Centrepoint to raise bond issue to S$500m amid high demand - Channel NewsAsia

2015-05-21T15:11:00.001-07:00

Frasers Centrepoint to raise bond issue to S$500m amid high demand - Channel NewsAsia

Looks like I am going to get some lots for this bond. My aim is saving only for a year actually and then sell it in the SGX market next year.

Frasers Centrepoint raising S$200m from bond issue - Channel NewsAsia

2015-05-18T08:30:00.000-07:00

Frasers Centrepoint raising S$200m from bond issue - Channel NewsAsia

This is one retail bond which is going to be listed... Finally there is one which we can look into.

IPO price on 17th May 2015 = S$1.00
Interest = S$0.0365 per share
Yield = 3.65%

Investment till Callable Date

Tenure = 7 years
Total Interest = $0.2555 per share
Capital Loss = $0.00
Transaction Cost = $0.006
Overall Return = $0.2495
Overall Annual Yield = 3.564%

Fraser Centrepoint is now raising a new 7 year bond with a coupon of 3.65%. On paper, the published yield seems ok but if you look at investment till callable date, you would realize that it is by far even better than Hyflux 6% CPS preference shares because if you get it at IPO and hold it until maturity, you are not going to lose any capital. For Hyflux, you are still going to lose capital because you are buying at a premium.

There is another bond, Genting SP 5.125% Perp bond which has almost the same maturity as FCL (provided they redeem their bonds) and it is currently having an overall annual yield of 4.062%. Another is CapitaMall Trust 3.08% bond yielding at an overall annual yield of 2.707% maturing one year lesser. Thus, there is quite a number to compare. I would say that the yield is going to be closer than CapitaMall Trust than Genting SP as FCL and CapitaMall Trust are both property related (although one is a developer and another is a REIT)

I have applied for 10 lots and hoping to get some. If I am right than the yield is going to be closer to CapitMall Trust 3.08%, price will go up to about $1.04 at listing. If I am wrong and it is closer to Genting SP 5.125% Perp, the price will go down to $0.98. It is really a 50-50 and I think it is going up. If it really went down, I will buy more on the market.

OCBC 360 - from 3.05% to 2.25% Account... Still the best for me

2015-05-05T14:00:00.000-07:00

With a change in policy from OCBC this year, they tried to tie in more criteria to sell more products and generate more sales and at the same time, cushion the impact of unhappiness. Well, it looks like an increase but it is actually a decrease.

Salary Credit increases to 1.2% per annum
3 GIRO dropped to 0.5% per annum
$500 Credit Spend dropped to 0.5% per annum
1% more if you buy structured products, unit trusts or selected insurance (Selling more products here)

To me, the last criteria is not really important as they are trying to sell more products here. That leaves me with 2.25% which is still not too bad.

Thus, for every $10,000 savings in the account, we will earn $225 per year with $50 coming from minimum $500 spend per month ($6,000 per year) credit card spend.

Still the best in town, better than fixed deposits. Just glad that I have enjoyed the earlier 3.05%.

Analysis of Hyflux 6% CPS 10

2015-04-22T08:30:00.000-07:00

Current Price on 16th Apr 2015 = S$106.40
Interest = S$6 per share
Yield = 5.639%

Investment till Callable Date

Tenure = 3 years
Total Interest = $18 per share
Capital Loss = $6.40
Transaction Cost = $0.532
Overall Return = $11.07
Overall Annual Yield = 3.467%

I recently advised my brother to buy Hyflux 6% CPS 10 just before they distribute their interest. He did and has not regretted since the drop in price is less than the dividend he receives. I am glad that he has made his foray into investment although it is a small step.

With the recent distribution, here are the statistics. With an overall annual yield of 3.467%, it looks decent especially when we are looking at a 3 year bond. Better than OCBC 360 which is going to change its regulation soon and we may not be getting 3.05% anymore.

Thus, this becomes increasing an attractive place to park my cash reserves.

Details on savings bonds for individual investors released - Channel NewsAsia

2015-04-06T08:30:00.000-07:00

Details on savings bonds for individual investors released - Channel NewsAsia

With the details of the Singapore Saving Bonds coming up, it is really good for all of us who wish for higher interest rates to be earned from our savings.

However, with the 10 year bonds hovering at 2 - 3%, they still can't beat OCBC 360 account which is paying 3.05%. If I were you and I am still working, I will open the account and faithfully fulfil the three criteria to get the interest.

Analysis of OCC 5.1% NCPS 100

2015-03-16T08:30:00.000-07:00

Current Price on 6th Mar 2015 = S$105.30
Interest = S$5.10 per share
Yield = 4.873%
Credit Rating = BBB+

Investment till Callable Date

Tenure = 3.5 years
Total Interest = $17.85 per share
Capital Loss = $5.30
Transaction Cost = $0.52
Overall Return = $12.02
Overall Annual Yield = 3.262%

OCC 5.1% NCPS 100 is one of those which is giving a higher return than OCBC 360. Moreover, they just paid a coupon which reduces its purchase price. Here are the statistics.

Current yield is at 4.873% which is quite strong (One of the highest) but if you count in capital loss and transaction cost, overall annual yield is 3.262% which is marginally higher than the base of 3.05%. One good thing about this is that it has a credit rating of BBB+ which shows its stability and it is equivalent to most of the REITs

There are better preference shares out there like Hyflux (although there is no credit rating) and Genting (but it is casino-based which I don't like). I will just keep track but I won't enter into this yet.

Updates on my Portfolio

2015-03-09T08:30:00.000-07:00

Recently Olam has redeem their bonds which I was one of the holders. I bought it just before they announce that they are redeeming it. Luckily, with the appreciation of US dollar, I manage to break even from this mistake that I have made. With the money back, I am looking at how to park my cash reserve again.

My brother gave me a suggestion which I thought was good and that is to include transaction cost into my analysis. It is a great idea so as to give more clarity on the analysis that I am giving. Moreover, with OCBC 360 Account as a base, it is easier to compare so from now on, my analysis will include transaction cost. :-)

The frequency of posting will be less for this as there are not many counter to follow in the first place so whenever there is something, I will put it up.

Update - Singapore Corporate Bonds and Preference Shares: Analysis of Olam 6.75%b180129 Retail Bond

2015-02-14T01:07:00.001-08:00

Singapore Corporate Bonds and Preference Shares: Analysis of Olam 6.75%b180129 Retail Bond

Recently they have decided to redeem the bond which resulted in a drop of its shares to $1.033. I guess I am still not quite informed and not tracking the market as closely as I should. I actually bought it on the day they made this announcement so I am making a loss on this. Hope that it is not too much.

Analysis of Olam 6.75%b180129 Retail Bond

2015-01-28T08:30:00.000-08:00

Current Price on 26th Jan 2015 = US$1.043
Interest = US$0.0675 per share
Yield = 6.472%
Credit Rating = None

Investment till Callable Date

Tenure = 3 years
Total Interest = US$0.2025 per share
Capital Loss = $0.043
Overall Return = $0.1595
Overall Annual Yield = 5.097%

I realize that I made an error in my previous analysis and discounted one payment of the coupon which amounts to $0.03375. Apologies for that. Here is the current statistics.

With the current statistics, especially when it corrected to reflect its distribution of interest, its overall annual yield is now at 5.097% which is extremely attractive. Current yield is at 6.472% which is also the highest among the SGX retail bonds. The only issue is that it is US$. But US$ is currently quite stable and is increasing so risk is very minimal.

Olam is currently majority-owned by Temasek Holdings which is Singapore's SWF. As a Singaporean, I do trust the judgement of Singapore's SWF especially when it is listed on SGX. They can't let it go down the drain because ordinary Singaporean is also vested in it. To me, Temasek Holdings gave them security.

This excites me as I am able to find one bond which is much stronger than what OCBC 360 account can offer (which is risk-free). Thus, I am switching my cash reserves over to Olam 6.75%b180129 Retail Bond

Setting of Criterias for Investing in Retail Bonds/Preference Shares

2015-01-16T08:30:00.000-08:00

After some thoughts on this, here is my decision on the criteria for investing in Retail Bonds/Preference Shares.

1) Retail Yield must be at least 4.05%. The guideline is that it must be at least 1% higher than the risk-free rate of 3.05% which OCBC 360 account is offering.

2) Overall Annual Yield must also be at least 4.05%. The guideline is also that it must be at least 1% higher than the risk-free rate of 3.05% which OCBC 360 account is offering.

3) The remaining tenure must be at least 2.5 years. This is to provide price stability of the bonds/preference shares so that the actual yield that I receive is closer to the retail yield than the overall annual yield. Once it breaches this gap, I think I should sell.

With this, here are the bonds which fit all three criteria currently.

1) Genting SP5.125%Perp
2) Hyflux 6% CPS 10

Analysis of Hyflux 6% CPS 10

2015-01-13T08:30:00.000-08:00

Current Price on 8th Jan 2015 = S$106.05
Interest = S$6.00 per share
Yield = 5.618%
Credit Rating = None

Investment till Callable Date

Tenure = 3.5 years
Total Interest = $21 per share
Capital Loss = $6.05
Overall Return = $14.05
Overall Annual Yield = 4.028%

Hyflux Preference Shares was one of my holdings when I first have my cash reserves. With an interest of 5.618%, it is one of the best in SGX which is S$ denominated. (Olam is better but it is US$). However, it is priced at 6% premium which is tricky. Therefore, the overall return will be only 4.028% if it is held till maturity.

My strategy would be to use this as a one-year bond. That means to purchase it now, earn 5.6% interest, pay about 0.50% transaction cost (which means a net of 5.1% return) and sell it after 12 months. Of course, there is a risk that its price will drop but with a historical fluctuation of 3%, it is worth a try.

Increasingly, I am setting some of my criteria. One of which is that it needs to have a remaining tenure of at least 3 years to provide some price stability to it.

SGX's proposed bond framework needs demand to stand on, News, News, AsiaOne Business News

2015-01-05T08:30:00.000-08:00

SGX's proposed bond framework needs demand to stand on, News, News, AsiaOne Business News

I think they will launch the product anyway because only when it is launched then there is a good gauge on the level of investor education. However, with the interest rates going to go up, it may be tricky.

Genting SP5.125%Perp - The best fixed income instrument at this point.

2015-01-02T08:30:00.000-08:00

Current Price on 30th Dec 2014 = S$1.043
Interest = S$0.05125 per share
Yield = 4.914%
Credit Rating = BBB+

Investment till Callable Date

Tenure = 7 years
Total Interest = $0.35875 per share
Capital Loss = $0.043
Overall Return = $0.31575
Overall Annual Yield = 4.325%

Genting Singapore has a perpetual bond which is listed on SGX. It is currently the one with the longest tenure of 7 years with the highest overall annual yield of 4.325%. This is reasonable as longer dated bonds tends to have higher yields.

With a premium of 4.3%, I think it is still quite reasonable. Moreover at callable date, if they choose not to redeem, they will give a higher yield of 6.15% which is better for us. Unless they manage to find cheaper source of credit, they will maintain this listing.

Currently, I am looking at bonds or preference shares with a yield of at least 4.05% because OCBC 360 account offers 3.05%. So I was telling myself that 1% more from retail bonds/preference shares should be reasonable. At this point only this and possibly Hyflux Preference Shares qualify for this criteria.

I am building more criterias in just to make sure that I am getting the right fixed income instrument for my cash reserves.

Del Monte to delever after jumbo LBO | News | IFRAsia

2014-12-31T08:30:00.000-08:00

Del Monte to delever after jumbo LBO | News | IFRAsia

Here we have one potential preference shares going to be listed. Quite excited about it but does retail investors like us get a piece of the pie?

Olam US Bonds - The highest yield with currency risk.

2014-12-29T08:30:00.000-08:00

Current Price = US$1.08
Interest = US$0.0675 per share
Yield = 6.368%
Credit Rating = None

Investment till Callable Date

Tenure = 3 years
Total Interest = US$0.2025 per share
Capital Loss = $0.08
Overall Return = $0.1225
Overall Annual Yield = 3.781%

As I am rebuilding my cash reserve, it would be good to look at some of these bonds again to see whether it is good. One of the choice is Olam 6.75% Bonds.

The interest rate is quite high at 6.25% which is the highest in the market (even higher than Hyflux) If we are looking at investment till maturity, the overall annual yield is 3.781% which unfortunately is not the highest

One interesting point is that it is US denominated which means there is a currency risk. However to think about it, if US raise their interest rates which has always been the talk in the financial world, money will flow into the country. Therefore, US dollar will rise and it will benefit this bond.

With 3.781%, I don't think I will be putting this amount of money in this yet. I can wait until it drops further before I analyze again. I am still leaving my money in my OCBC 360 account which is giving me 3.05%.

Rebuilding my Cash Reserve

2014-12-22T08:30:00.000-08:00

Hi everyone,

Corporate Bonds and Preference Shares is a quieter blog as there are not much new movements and the statistics does not change much. Just to share with you some updates on my Cash Reserve.

I have placed $20,000 as cash reserves (saving up Dec salary plus bonuses of mine and my wife) and we have placed it in OCBC 360 Account which gives us 3.05% at this point. Not the best option in terms of yield but the best in terms of liquidity because I don't have to sell bonds or preference shares to get back my cash.

Thus this is the portfolio that I currently have. I intend to continue to build this portfolio so that I have enough cash reserve to tide over any emergency.

Cash Reserve = $20,000
Interest = $610 per year ($50.83 per month)

OCBC 360 Account - 3.05%

2014-11-11T05:50:00.000-08:00

http://www.ocbc.com.sg/personal-banking/accounts/360-account.html

I have opened this account and did all they need me to do for the past few months to earn the 3.05%. The results were amazing. There were months where I earn $18 interest just for deposits in that month.

To me, it is really a lot considering that I have been researching on how to have risk-free interest and investments and now we have this account to earn so much interest.

Highly recommended. DBS' 2.08% can't beat it.

OCBC 360 Account - 3.05%

2014-07-21T08:30:00.000-07:00

http://www.ocbc.com.sg/personal-banking/accounts/360-account.html

I know that this is not a corporate bond or preference shares. But the fact is that it is giving us 3.05% which is more than some of the bonds or preference shares listed on SGX. To me, it is a great place to park my cash reserve especially when I can use it without incurring any charges. Moreover, it is paying me a monthly interest without the fluctuation of the market, which is fantastic.

I am putting money in and rebuilding my cash reserve.

It has been a while...

2014-07-07T08:30:00.000-07:00

It has been a while since I blogged here. I remember I was focused on building my family's safety net and parked about $50,000 into bonds and preference shares. Since then, there are updates.

I have sold all my bonds as I have made a EC purchase late last year and use it as a down payment for my EC. I think it is still a good move although I am taking a risk to use my cash reserves than my investments.

Thus, I am now in the process of rebuilding my cash reserve so that if there is anything which my family requries, I have the cash to tide over. (I expected the cash to come in one week's time so I can still put it in SGX bonds and preference shares)

Do look out for more details here as I restart my sharing of my analysis on bonds and preference shares.