Not many people know, but retail government and corporate bonds have been available on Singapore Stock Exchange (SGX) since July 2011. Basically you can buy bonds just like buying any other stocks through a brokerage. Before buying bonds, the first thing is to understand that there are 2 main types of bonds.
All the resources you'll ever need as an investor
We've gone ahead and done the work. Compiled here are all the resources you'll need as an investor.
Government Issued Bonds
Singapore Government issued Securities (SGS) by Monetary Authority of Singapore (MAS) on behalf of the Singapore Government. They can be either Treasury Bills (T-Bills) which mature in less than one year or SGS Bonds with maturities of 2, 5, 10, 15 and 20 years. However, T bills can only be bought through ATM, while you can trade SGS bonds of 2 years and above maturity on SGX. SGS bonds at this moment are AAA rated by S&P, the highest rating available. All SGS bonds pay coupons semi-annually.
Corporate Issued Bonds
Bonds issued by either statutory boards like Jurong Town Corporation (JTC) or companies such as SIA. Statutory board bonds can be considered almost similar grade to government bonds as the boards are actually government bodies. Companies such as SIA and F&N though are private/public listed companies which have to evaluated on their business performance and ability to service debt.
Bond Quotation on SGX
As discussed earlier, bonds are now tradeable on SGX, hence providing easy access for any indivdiual with a stock brokerage account. Like Singapore stocks, bonds are also traded in values of $1000. Unlike stocks, bond names can look a bit cryptic to the uninitiated. Here we will discuss how to decode the bond names.
Quotation for SGS Bonds
Example: NY07100X 220901 10 – Buy $113.983 Sell $114.983
220901 -> Maturity date on 01/09/2022
07 -> Issued on 2007
1 Lot = 10 units, hence price = $114.983 X 10 units = $1,114.983 for 1 lot
Quotation for Corporate Bonds
Example: CapMallA2.15%140121 Buy $1.01 Sell $1.03
CapMallA -> Issuer CapitaMalls Asia
2.15% -> Coupon is 2.15%
140121 -> Maturity Date is 21/01/2014
1 lot = 1000 units, hence price = $1.03 x 1000 units = $1030 for 1 lot
About the Author
Calvin Yeo is the Managing Director of Doctor Wealth Pte Ltd (www.drwealth.com), which is an online financial planning platform. He is also a Chartered Financial Analyst (CFA) as well as Certified Financial Planner (CFP).
For further reading, you may be interested in: