FT reports that SGX, Banks Discuss Starting an Asian Corporate Bond Platform.
The banks and asset managers include UBS, Schroders and Alliance Bernstein.
My initial assessment is that it is bad for current investors and good for future market participants.
Here's our mistakes. Don't do the same.
We asked 14 Singapore finance bloggers to share what they would do if they could go back in time and invest their first $20,000. They can no longer rewind time, but you can learn from their experience and hopefully start with a better footing.
1. SGD bond market is mostly non-transparent which means that prices do not exist for trading but more for revaluing portfolios.
When actual price discovery occurs, many papers marked at 100 would probably be adjusted to fair value.
2. Most SGD bonds are priced too tightly in their initial offering because of lack of competition.
When more participants enter the marketplace, pricing will veer towards international levels and many of our local corps have been getting away with near investment grade pricing.
What will probably happen would be it shall start with perhaps a daily closing price because there really is not enough volume to justify the migration to a trading platform.
The G3 currency bonds will move onto the new platform which will give savvy SGD investors ample time to reassess their options until then.
This article was published on www.tradehaven.net, and is republished with permission.